BILL ANALYSIS
AB 1108
Page 1
Date of Hearing: April 27, 2008
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Felipe Fuentes, Chair
AB 1108 (Fuentes) - As Amended: April 22, 2009
SUBJECT : Electric and gas utility service: master-meter
customers.
SUMMARY : Changes several provisions of law regarding electric
service infrastructure in mobilehome parks in which the park
owner is a master-meter customer and the tenants are submetered.
EXISTING LAW:
1)States that whenever residential light, heat, or power is
furnished through a submeter system by a master-meter customer
for sale to users who are tenants of a mobilehome park,
apartment building, or similar residential complex, the
master-meter customer is responsible for maintenance and
repair of its submeter facilities beyond the master meter.
2)Requires the Public Utilities Commission (PUC) to direct the
gas or electric corporation furnishing service to the
master-meter customer to establish uniform rates for
master-meter service at a level that will provide a sufficient
differential to cover the reasonable average costs to
master-meter customers of providing submeter service, except
that these costs shall not exceed the average cost that the
corporation would have incurred in providing comparable
services directly to the users of the service.
3)Requires that the master-meter customer charge each user a
rate that does not exceed the rate that would be applicable if
the user were receiving service directly from the gas or
electric corporation for comparable service.
4)Allows the owner of a master-metered mobilehome park or
manufactured housing community that provides gas or electric
service to residents to transfer ownership and operational
responsibility to the gas or electric corporation providing
service in the area in which the park or community is located
under certain conditions.
AB 1108
Page 2
5)Requires that residents of mobilehome parks and manufactured
housing communities constructed after January 1, 1997, be
individually metered and served by gas and electric
distribution facilities owned, operated, and maintained by the
gas or electric corporation providing the service in the area
where the new park or community is located.
6)Requires public utilities to provide and maintain such
adequate, efficient, just and reasonable service as are
necessary to promote the health and safety of its patrons, and
the public.
THIS BILL:
1)Grants the PUC the authority to order the master-meter
customer to maintain or repair facilities upon finding that a
master-meter customer has failed to maintain or repair its
submeter facilities beyond the master-meter.
2)Authorizes the PUC to order that the rate differential be held
in trust and expended for maintenance and repair of the
submeter facilities upon finding that the master-meter
customer has failed to maintain or repair its submeter
facilities beyond the master-meter.
3)Requires a master-meter customer to separately bill each user
for gas or electric service, or both, and rent.
4)Prohibits a master-meter customer from charging a user of
electricity or gas any late charge for gas or electric service
as a result of nonpayment or delayed payment of rent.
5)Requires the owner of a master-metered mobilehome park that
provides gas or electric service to residents to transfer
ownership and operational responsibility for the gas or
electric system to the gas or electric electrical corporation.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author's office, the purpose of
this bill is to ensure submetered mobilehome park residents are
provided safe, reliable electric service at rates which are no
higher than those applied to comparable customers being served
directly by the utility while at the same time improving public
safety and grid reliability.
AB 1108
Page 3
1) Background: Over 2,000 mobilehome park owners in the state
provide electricity to their tenants through a master meter. In
such cases, the park owner receives electricity from the utility
at a master meter. The electricity is then distributed to
tenants through infrastructure owned by the park owner and a
sub-meter located at each tenant's mobilehome. The tenants are
then billed by the park owner for the electricity they use in
the same way that a utility would if the tenant was being
directly served by a utility.
Current law requires that the utility company give the park
owner a discount (differential) in order to recover the costs of
operating the system. The differential is set as an amount per
occupied space. PG&E currently provides a differential of $21.76
per month per occupied space. Some mobilehome parks in
California have over three-hundred spaces. Current law does not
provide a mechanism to ensure that any of this money is being
used to maintain utility infrastructure. This bill seeks to
provide such a mechanism by granting the PUC the authority to
order that the money be held in trust if there is a finding that
the park owner has not adequately maintained the infrastructure.
AB 622 (Conroy), Chapter 424, Statutes of 1996, required gas and
electric corporations to assume ownership of master-metered
systems in mobilehome parks upon the completion of a specified
process. AB 622 required the mobilehome park owner to pay the
costs of an engineering evaluation and the costs of upgrading
the system. Some mobilehome park owners claim that the AB 622
requirements have made the transfer of the systems
cost-prohibitive. In fact, no systems have been transferred
since the passage of AB 622 thirteen years ago. This bill
repeals the AB 622 requirements and instead requires that the
utilities assume ownership of these systems under terms to be
determined by the PUC.
2) Are we paying enough?: The differential rate is set at the
average cost to the park owner of providing service, but is then
capped at the average cost that the utility would have incurred
in providing comparable services directly to the customers.
These requirements are contradictory in that the cost of
providing service for the park owner is higher than that of the
utility because the utility has both the economies of scale and
the expertise in providing service to lower the cost of
AB 1108
Page 4
providing service. Therefore the park owner will almost
certainly be receiving inadequate compensation under the current
system.
Further complicating this issue is the adequacy of mobilehome
park owner's records. Park owners have not kept records that are
sufficient for use as evidence in PUC proceedings. As a result
the PUC has been unable to determine owners' costs of providing
submetered services, and has subsequently been unable to
determine whether the discount provides them with adequate
reimbursement. This bill requires the utility to directly serve
customers that are currently being submetered and therefore
eliminates the need for the differential upon transfer of the
system.
3) Park owner acting as a utility: Under current law mobilehome
park owners who are master-meter customers are essentially
acting like small utilities. Park owners are responsible for the
same functions as utilities including maintaining, repairing and
replacing the distribution system. They are also responsible for
reading meters and billing customers. This raises two issues.
First, the owner may or may not have the expertise to provide
these services adequately. More importantly, the PUC's authority
to regulate utility infrastructure ends at the master-meter.
The lack of regulation of privately-owned distribution systems
can cause a significant threat to public safety and overall grid
reliability. In October of last year a fallen distribution line
in a remote part of Los Angeles County caused the Sesnon fire,
which destroyed 15 homes and damaged six, destroyed 47
outbuildings and may have contributed to the death of a motorist
driving on the 118 Freeway. While PUC rules require power lines
owned by electric utilities to be inspected regularly and to
have brush under the lines cleared to prevent fires, those rules
do not extend to distribution systems that are not owned by the
utility. This bill mandates that the utilities assume ownership
of these systems in mobilehome parks, thus making those
distribution systems subject to PUC rules and regulations.
REGISTERED SUPPORT / OPPOSITION :
Support
City of Santa Monica
AB 1108
Page 5
Opposition
None on file.
Analysis Prepared by : Nina Kapoor / U. & C. / (916) 319-2083