24. Bill Calculation Services for
Mobile Home Parks

On March 23, 2005, the WMA filed a motion seeking a ruling that two issues are within the scope of Phase 1 of SCE's test year 2006 GRC and should be addressed in this proceeding. The two issues identified by WMA were as follows:

1. Are there fair and reasonable ways to mitigate the cost to MHP owners of converting existing submetered systems to directly metered service? (conversion issue)

2. SCE should provide an analysis of the costs, benefits and feasibility of providing bill calculation services to MHP owners, examples of the appropriate tariff language and an estimate of the rates necessary to recover the full costs of such service from MHP owners. (billing issue)

According to WMA, these issues were the subject of the Commission's investigation into the master meter discount in Rulemaking (R.) 03-03-017 and Investigation (I.) 03-03-018. WMA stated that in D.04-11-033, the Commission directed that these issues be considered on a case-by-case basis outside the rulemaking/investigation and that it now seeks to properly include them in this proceeding.

The conversion issue was considered, but not fully developed in R.03-03-017/I.03-03-0-18. The active parties in that proceeding filed a motion seeking to establish a separate proceeding to address whether there are fair and reasonable ways to mitigate the cost to MHP owners of converting existing submetered systems to directly-metered service. The parties contended that the issue would be complex and wide-ranging, and involve questions that would require significant discovery, hearings and briefing. For that reason, it appeared that consideration of the conversion issue in SCE's current GRC would unduly affect the established procedural schedule. D.04-11-033 denied the parties' motion to establish a separate proceeding and stated this issue is reserved for consideration in a future proceeding.122 An ALJ Ruling, dated April 22, 2005, stated that the conversion issue should be addressed when that future proceeding is identified and instituted. WMA's request to add the conversion issue for consideration in this GRC was then denied.

Regarding the billing issue, in D.04-11-033, the Commission stated:

"The utilities are far more knowledgeable about how to calculate utility bills than the MHP owners. Therefore, having the utilities offer bill calculation services to MHP owners should be considered as a possible way to ensure that tenants are correctly billed, and receive any discounts or refunds to which they are entitled. To do this, it will be necessary to consider the costs and benefits, as well as any other relevant matters. Therefore, we will require the utilities to provide an analysis, in their next revenue requirement proceedings, of the costs, benefits, and feasibility of providing bill calculation services. The utilities will also be required to provide examples of the appropriate tariff language, and an estimate of the rates necessary to recover the full costs of the services from the MHP owners. With this information, the matter can be fully considered in those proceedings."123

The April 22nd Ruling granted WMA's request to consider the billing issue in the revenue requirement phase of this GRC. Arguably, the next revenue requirement proceeding for SCE would have been its next filed GRC, probably for test year 2009. Even though D.04-11-033 was issued on November 19, 2004 and mailed on November 24, 2004, both of which dates were in advance of SCE's GRC application filing on December 21, 2004, the timeframe in which SCE could have developed the required analysis of billing service costs, benefits and feasibility and included it in its showing for the test year 2006 GRC would have been prior to the October 22, 2004 acceptance of its notice of intent to file the GRC application. However, delaying consideration of this issue for SCE until its next GRC for test year 2009, at the earliest, was not considered to be in the public interest. The April 22nd Ruling stated that a timelier implementation of the directives of D.04-11-033 should be accomplished for SCE by considering the issue now, as part of this proceeding.

A prehearing conference was held on May 6, 2005 to consider matters related to inclusion of the billing issue in this GRC. In accordance with the determined schedule, SCE served testimony on July 15, 2005 regarding the costs, benefits, and feasibility of providing bill calculation services on behalf of the owners or operators of submetered mobile home parks (MHPs). TURN served responsive testimony on August 15, 2005. SCE and WMA served rebuttal testimony on August 29, 2005. On September 1, 2005, SCE provided notice to all parties to this proceeding of the intent of SCE, TURN, and WMA to conduct a telephonic conference on September 8, 2005 related to potential settlement of issues in this proceeding. The conference call was conducted as scheduled, with representatives of SCE, WMA, TURN, and Pacific Gas and Electric Company in attendance. SCE, WMA, and TURN (the "Settling Parties") reached a settlement that resolves all outstanding issues related to SCE's provision of bill calculation services for MHPs. A settlement agreement (Settlement) was executed on or after September 8, 2005, and was attached to the motion. Evidentiary hearing was held on September 12, 2005.

In its prepared testimony, subsequently identified as Exhibit 167, SCE stated its belief that it is feasible to offer a bill calculation service as described in D.04-11-033. In summary, SCE stated:

· To utilize SCE's proposed bill calculation service, MHP owners must enroll for the bill calculation service pursuant to an agreement for a minimum term of 12 months.

· MHP owners will be required to provide SCE with each tenant's rate schedule, billing period, and meter read information through a secured link at SCE's web site.

· MHP owners will provide information such as metered usage data in a required format to facilitate the calculation. MHP owners will continue to take responsibility for the accuracy of the meter data.

· SCE will calculate submetered tenants' bills in accordance with the applicable SCE residential rate schedules and return the bill calculation information to the MHP owner.

· SCE will send the MHP owner a nonenergy invoice with service fee based on the number of tenant bill calculation transactions processed and the delivery method selected by the MHP owner. The MHP owner will be able to select from three options to receive each tenant's calculated electrical bill information: e-mail correspondence, compact disc, or paper copy.

· As required by D.04-11-033, the costs of this service must be recovered from the MHP customers.124 Those MHP customers that enroll for this service will pay a separate monthly fee that is designed to recover SCE's costs of establishing this service. In addition, MHP owners will pay a transaction fee per each bill calculation, i.e., each time a tenant's bill is calculated and the results delivered to the MHP owner, to recover SCE's system costs and ongoing costs of providing this service.

Details of SCE's proposal, the costs and benefits associated with the proposed service, estimated calculation service fees, a proposed tariff and a proposed bill calculation service agreement were included in Exhibit 167.

TURN was the only party that responded to SCE's proposal. In its testimony, TURN recommended adoption of SCE's proposal with the following modifications:

· The Commission should require SCE to offer one-time rebate, refund and credit calculation services as part of its bill calculation and presentation package, rather than offer the former as an optional "special service."

· The Commission should require that all park owners taking bill calculation services from SCE also distribute to tenants Edison's bill inserts pertaining to the availability of utility programs such as the California Alternate Rate for Energy (CARE) program, the Family Electric Rate Assistance (FERA) program, and the Medical Baseline Program.

· The Commission should require SCE to retain 3 years of billing records for MHPs subscribing to its billing services, rather than the proposed 1 year. In addition, the Commission should ensure that Edison's service fees for providing bill calculation services to MHPs are calculated consistently with the credit DMS-2 customer receive in the DMS-2 submetering discount. Otherwise, SCE's purportedly ratepayer-neutral proposal may result in ratepayer subsidies to MHP master meter customers.

· The Commission should require Edison to update its proposed fees to 2006 dollars, as 2006 is the year when this service will most likely be implemented.

SCE and WMA each served rebuttal testimony on August 29, 2005. SCE agreed with TURN's recommendations to retain tenant bill calculation records for a three-year period and to update the proposed customer charge and bill calculation transaction fees from 2004 to 2006 dollars. SCE also agreed to modify its proposal to include any applicable tenant refund or credit calculations as a mandatory part of the bill calculation service, with costs based on SCE's time and materials expense. Because SCE already provides application and renewal forms and certificates for CARE and FERA to MHP owners in June of each year, SCE opposed TURN's recommendation to provide bill inserts to MHP owners who subscribe to the bill calculation service for distribution with the tenant bills. WMA did not object to some of TURN's proposals, but raised concerns that TURN's recommendations would increase the cost of the bill calculation service, which would in turn reduce participation. WMA opposed TURN's recommendation to require all mastermeter subscribers to the bill calculation service to have SCE calculate any applicable refunds or credits for submetered tenants because in part Public Utilities Code Section 739.5(b) applies a different requirement to the provision of refunds to submetered tenants of MHPs than applies to directly metered residential customers of the utility. WMA also opposed the imposition of any further notification requirements regarding rate discount programs as a requirement for subscription to the bill calculation service. WMA also noted several concerns regarding TURN's recommendation that SCE should be required to retain billing records provided by master-meter customers for a period of three-years.

The Settling Parties agreed to resolve their differences as follows:

· The MHP owners or operators who subscribe to the bill calculation service shall pay for SCE to calculate any applicable tenant refunds or credits resulting from Commission orders or other mechanisms that would otherwise apply to directly-metered residential customers of SCE, and shall have such costs added when applicable to the customer charge or bill calculation transaction fees.

· No requirements to distribute bill inserts or post notices regarding the eligibility or availability of discounts to submetered tenants of MHPs in addition to those currently required for CARE, FERA, or medical baseline will be imposed on the MHP owners or operators by virtue of the customers' agreement to subscribe to SCE's bill calculation service.

· SCE shall retain for a three-year period the billing records of submetered tenants that are provided by subscribers to the bill calculation service.

· The customer charges, bill transaction fees, and any applicable costs for time and materials when necessary to calculate submetered tenant refunds or credits shall be updated to current dollar costs, and reflected as a special condition in SCE's Schedule DMS-2.

· SCE customers shall be required to execute the Bill Calculation Service Agreement included in Appendix C of SCE's initial testimony, identified as Exhibit 167, as a condition of receiving the bill calculation service.

The terms of the Settlement reasonably resolve differences between SCE's proposal and TURN's recommendations. Because SCE already provides application and renewal forms and certificates for CARE and FERA to MHP owners in June of each year, TURN's recommendation regarding related bill inserts or notice postings is not necessary. TURN's other recommendations are reflected in the Settlement.

The costs and revenues associated with this new service will not have any impact on the overall revenue requirement for SCE that will be determined in this proceeding. SCE's estimates of the costs to develop the billing system necessary for the service, to provide on-going services, and to maintain the systems are costs that are incremental to the costs identified in SCE's application and are not reflected in SCE's requested revenue requirement. The revenues generated from the proposed fees for the bill calculation service are designed to fully recover SCE's costs from MHP owners over five years based on forecast billing determinants. These revenues are not part of the Other Operating Revenues previously forecast in testimony this proceeding.

The Settlement was conducted and timely filed in accordance with Article 13.5 of the Commission's Rules of Practice and Procedure. WMA, SCE and TURN were the only parties that actively addressed this issue. No other parties opposed the Settlement. The Settlement is reasonable, consistent with law, and in the public interest. It is approved.

122 See D.04-11-033, Ordering Paragraph 13, as modified by D.05-04-031.

123 D.04-11-033, mimeo., page 31. Also, see Ordering Paragraph 12.

124 As designed, SCE's bill calculation proposal will not affect SCE's proposed revenue requirement in this proceeding. If charges collected from participating MHP customers do not recover SCE's development costs, SCE proposes to recover such incremental costs from all customers served on Schedule DMS-2 in a future proceeding. In SCE's next GRC, SCE will forecast the bill calculation service costs, and reassess the fees and participation levels in order to determine a revenue credit to be applied to SCE's overall revenue requirement.

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