BILL ANALYSIS ----------------------------------------------------------------- | | | SENATE COMMITTEE ON NATURAL RESOURCES AND WATER | | Senator Fran Pavley, Chair | | 2009-2010 Regular Session | | | ----------------------------------------------------------------- BILL NO: AB 1975 HEARING DATE: June 22, 2010 AUTHOR: Fong URGENCY: No VERSION: June 16, 2010 CONSULTANT: Dennis O'Connor DUAL REFERRAL: Committee on Rules FISCAL: Yes SUBJECT: Water charges and meters: multiunit structures. BACKGROUND AND EXISTING LAW The Water Measurement Law required, beginning January 1, 1992, every water purveyor to require the installation of a water meter as a condition of new water service. That law also requires urban water suppliers to install water meters on service connections that predate January 1, 1992, in accordance with a specific timetable, but in all cases by January 1, 2025. The law does not require the metering or submetering of individual units in multiunit residential structures. PROPOSED LAW 1.This bill would require, beginning January 1, 2013: Architectural plans for individual dwelling units in a newly constructed multiunit residential structures must include the installation of either a water meter or a submeter, at the discretion of the water purveyor, as a condition for the issuance of the building permit. The owner of such a structure, or his or her agent, must charge occupants for water service. The charge must be based on the actual volume of water delivered as measured by the water meter or submeter. The owner of the structure must ensure that a water submeter complies with laws and regulations governing installation, certification, maintenance, billing, and testing of water submeters. Water purveyors would be prohibited from charging an owner of a such a structure, or his or her agent, a fee for the installation of a water meter or submeter that is installed by the owner or his or her agent.. 1 1.This bill would require the Department of Housing and Community Development, during the next regularly scheduled building standards annual code adoption cycle beginning on or after January 1, 2011, to do the following: Develop and submit building standards for the installation of water meters and submeters in residential units within a multiunit residential structure or a mixed-use residential and commercial structure. Determine circumstances under which the installation of water meters or submeters shall be deemed infeasible, and provide an exemption for these circumstances in the proposed building standards. Exempt from those building standards low-income housing, student dormitories, senior living facilities. Before adopting these proposed building standards, the department must determine that a sufficient number of water meters and submeters are available in the market. ARGUMENTS IN SUPPORT According to the Sierra Club, "Water metering and volumetric pricing are paramount to giving Californians an accurate price signal for their water use. However for most multiple dwelling housing units, like apartments and condominiums, water agencies do not provide meters to individual unit. Instead, there are master meters for groups of dwelling units. The cost of water use is included with the cost of rent, charged as a flat fee, or allocated in some way among residents connected to the master meter. Residents in such dwelling units will not know how much water they use unless their units are sub-metered." "Studies have shown that water submeters are associated with decreased water usage. A 2004 Aquacraft Inc. study showed water savings of 15.3% when comparing sub-metered properties with rental properties that do not bill water separately from rent ("in-rent" properties.) Another study showed water usage in sub-metered properties to be 18% to 39% less than in-rent properties." ARGUMENTS IN OPPOSITION The Western Center on Law & Poverty writes "The bill would require water usage in each new multifamily dwelling unit to be measured by a utility-owned and operated meter, or a submeter owned and operated by the building's owner or landlord. It is the latter option that causes our concern." The Center 2 identifies a number of concerns, mostly related to tenant rights under a submetering program. These concerns include issues associated with: Enforced installation standards. Adequate disclosures. Conservation not being an excuse for soaking tenants. Billing practices. Dispute resolution. Leaks. Landlord remedies COMMENTS Sub-Metering Is The Challenge. In a metered system, the water purveyor supplies and bills water to each unit on the basis of a meter serving just that unit. The bill is paid directly by the resident of that unit to the water purveyor. In contrast, in a submetered system, the water purveyor supplies and bills water on the basis of a master meter at the main service connection. The bill is paid by the owner or the owner's agent. Further down line, submeters are installed on the supply line to each unit. The landlord then reads and bills each unit separately based on the reading of the submeter. The challenge is that under a submetered system, the landlord acts in a way similar to a retail water utility, but without the same level of regulatory oversight. Consequently, conflicts can arise over issues of meter accuracy, billing surcharges, etc. This bill would apply only to "newly constructed multiunit residential structure or a mixed-use residential and commercial structure for which the application for a building permit is submitted on or after January 1, 2013." To avoid the challenges raised by submetered systems, it might make sense to eliminate the option of submetered systems, thereby requiring all units to be individually metered. (See suggested amendments) Refer to Rules. Based on the June 16 amendments, the Rules Committee has asked that the bill be referred back to them for further consideration. SUGGESTED AMENDMENTS AMENDMENT 1: On page 3, line 7, strike "and submeters" AMENDMENT 2: On page 3, line 12, strike "or submeters" 3 AMENDMENT 3: On page 3, line 25, strike "and submeters" AMENDMENT 4: On page 4, line 10, strike "(a)" AMENDMENT 5: On page 4, line 15, strike "either a water meter or a submeter, at the discretion of the water purveyor," and insert "a water meter" AMENDMENT 6: On page 4, strike lines 18 through 22 inclusive AMENDMENT 7: On page 4 strike lines 29through 40 inclusive AMENDMENT 8: On page 5, strike lines 1 through 9 inclusive SUPPORT Sierra Club California (Sponsor) American Society of Engineers Association of California Water Agencies California League of Conservation Voters California Municipal Utilities Association Clean Water Action County of Los Angeles East Bay Municipal Utility District El Dorado Irrigation District GreenPlumbersUSA Inland Empire Utilities Agency Planning and Conservation League Santa Clara Valley Water District Santa Clara Valley Water District Utility Conservation Coalition Walnut Valley Water District OPPOSITION California Rural Legal Assistance Foundation Coalition for Economic Survival Western Center on Law & Poverty 4