BILL NUMBER: SB 1097 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Strickland
FEBRUARY 17, 2010
An act to amend Sections 2791, 2792, 2793, 2794, 2795, 2796, 2797,
2798, and 2799 of the Public Utilities Code, relating to utility
services.
LEGISLATIVE COUNSEL'S DIGEST
SB 1097, as introduced, Strickland. Gas and electric utility
service: master-meter customers.
(1) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations and gas corporations. Existing law authorizes 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 for its gas or electric
system to the gas or electric corporation providing service in the
area in which the park or community is located, pursuant to specified
transfer and cost allocation procedures.
This bill would correct existing references in the above-described
master-meter system transfer statutes by revising an "electric
corporation" to an "electrical corporation." The bill would require a
gas or electrical corporation that receives an offer to transfer a
gas or electric system from a master-metered mobilehome park or
manufactured housing community that is within its service territory
to accept transfer if certain criteria are met and require the
corporation to assign a representative who will have responsibility
for oversight of the proposed transfer, until the transfer is
complete or the transfer process is terminated. The bill would
require a gas or electrical corporation to provide the commission
with copies of certain notices, reports, and estimates generated
during the transfer process and would require the commission, upon
receipt of these materials, to monitor and facilitate the transfer
until the transfer is completed or the transfer process is
terminated. The bill would authorize the owner of a master-metered
mobilehome park or manufactured housing community to bring a
complaint before the commission for violation of the transfer laws
and require the commission to establish an expedited procedure for
the review of the complaint and to ensure that a final determination
of the issues raised by the complaint be reached not later than one
year after filing of the complaint.
(2) Existing law requires the commission to permit a gas or
electrical corporation to recover in its revenue requirement and
rates all costs to acquire, improve, upgrade, operate, and maintain
transferred mobilehome park or manufactured housing community gas or
electric systems.
Existing law requires that, when gas or electric service is
provided by a master-meter customer to users who are tenants of a
mobilehome park, apartment building, or similar residential complex,
the master-meter customer charge each user at the same rate that
would be applicable if the user were receiving gas or electricity
directly from the gas or electrical corporation. Existing law
additionally requires the gas or electrical corporation to establish
uniform rates to master-meter customers 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. Existing decisions of the commission refer to
this rate differential as the "submeter discount."
This bill would require that in any application to recover costs
to acquire, improve, upgrade, operate, and maintain transferred
mobilehome park or manufactured housing community gas or electric
systems, that the gas or electrical corporation include a calculation
of the utility's net costs, including additional income recovered by
the utility resulting from the elimination of the submeter discount.
The bill would require that when an appraised value is establish for
a submetered gas or electric system that is to be transferred by a
mobilehome park or manufactured housing community to a gas or
electrical corporation, that the appraised value include the value of
eliminating the submeter discount.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 2791 of the Public Utilities Code is amended to
read:
2791. (a) The owner of a master-metered mobilehome park or
manufactured housing community that provides gas or electric service
to residents may transfer ownership and operational responsibility to
the gas or electric electrical
corporation providing service in the area in which the park or
community is located pursuant to this chapter, or as the park or
community owner and the serving gas or electric
electrical corporation mutually agree.
(b) A gas or electrical corporation that receives an offer to
transfer a gas or electric system from a master-metered mobilehome
park or manufactured housing community that is within its service
territory shall accept transfer of the system pursuant to Section
2794.
(b)
(c) Costs, including both costs related to transfer
procedures and costs related to construction, related to the transfer
of ownership process, whether or not resulting in a transfer of
ownership to the serving gas or electric
electrical corporation, shall not be passed through to the park
or community residents. Costs related to the transfer of ownership
process, whether or not resulting in a transfer of ownership to the
serving gas or electric electrical
corporation, shall not be passed through to the gas or
electric electrical corporation, except as
otherwise provided in this chapter.
(c)
(d) Residents of mobilehome parks and manufactured
housing communities constructed after January 1, 1997, shall be
individually metered and served by gas and electric distribution
facilities owned, operated, and maintained by the gas or
electric electrical corporation providing the
service in the area where the new park or community is located
consistent with the commission's orders regarding unbundling,
aggregation, master-metering, and selection of suppliers by
residential customers. Each gas and electric
electrical corporation shall cooperate with the owner of any
park or community constructed after January 1, 1997, to ensure timely
and expeditious installation of the gas and electric distribution
system and to eliminate any delay in the design, construction,
permitting, and operation of the gas and electric system in the park
or community.
SEC. 2. Section 2792 of the Public Utilities Code is amended to
read:
2792. (a) Upon receipt of a written notice of intent to transfer
from the mobilehome park or manufactured housing community owner, the
gas or electric electrical corporation
shall assign a representative of the gas or electrical
corporation who will have responsibility for oversight of
the proposed transfer pursuant to the chapter, until the transfer is
complete or the transfer process is terminated. The gas or electrical
corporation shall notify the commission and the owner of
the park or community of the identity of the assigned representative,
and within 90 days , do all of the following:
(1) Meet with the park or community owner to describe the
procedures involved in a transfer of ownership and operation
responsibility.
(2) Perform a preliminary review of the gas or electric system, or
both, in the park or community.
(3) Inspect documentation provided by the park or community owner
of the construction, operation, and condition of the gas or electric
system, or both.
(4) Advise the park or community owner concerning the general
condition of the plant and equipment, along with a preliminary
opinion concerning the extent of construction work or other activity
necessary to comply with Section 2794.
(5) Offer a preliminary nonbinding estimate of the cost of
transfer.
(6) Offer the park or community owner a preliminary nonbinding
cost estimate to perform an engineering evaluation and estimate the
construction work and equipment replacement to be performed by the
gas or electric electrical corporation
at the owner's expense.
(b) The gas or electric electrical
corporation shall develop the cost estimate for the engineering
evaluation in good faith using the same methodology as is used for
similar projects. The preliminary cost estimate shall be effective
for a minimum of 90 days. The gas or electric
electrical corporation shall give the owner timely notice of
any increase in the estimated cost of the engineering evaluation.
(c) During 1997, gas and electric corporations shall make a good
faith effort to respond within 90 days to the notice provided in
subdivision (a).
(d)
(c) The gas or electric
electrical corporation may charge a fee for the initial
inspection not to exceed one hundred fifty dollars ($150).
(d) The gas or electrical corporation shall provide the commission
with a copy of all of the following:
(1) The written notice of intent to transfer from the owner of the
park or community.
(2) Any report of the results of the preliminary review of the gas
or electric system, or both, in the park or community undertaken
pursuant to paragraph (2) of subdivision (a).
(3) Any report of the inspection undertaken pursuant to paragraph
(3) of subdivision (a).
(4) The preliminary nonbinding estimate of the cost of transfer
offered to the park or community owner pursuant to paragraph (5) of
subdivision (a).
(5) The preliminary nonbinding cost estimate for performing an
engineering evaluation and estimate of the construction work and
equipment replacement offered to the park or community owner pursuant
to paragraph (6) of subdivision (a).
(e) Upon receipt of the materials supplied by the gas or
electrical corporation pursuant to subdivision (d), the commission
shall monitor and facilitate the transfer, until the transfer is
complete or the transfer process is terminated.
SEC. 3. Section 2793 of the Public Utilities Code is amended to
read:
2793. (a) Upon receipt from the park or community owner of a
deposit representing the gas or electric
electrical corporation's estimated cost of the engineering
evaluation, the gas or electric electrical
corporation shall, within 90 days, do all of the following:
(1) Develop an engineering plan for bringing the gas or electric
system to the standard described in Section 2794, incorporating all
relevant documentation including plans, drawings, engineering
studies, and other existing documentation provided by the park or
community owner, and considering incorporation of all portions of the
gas or electric system found to be used, useful, and compatible.
(2) Develop an appraisal of the value to the gas or
electric electrical corporation of the physical
plant and equipment found to be used, useful, and compatible that
comprise the gas or electric system, or both, to be transferred,
including an estimate of the remaining useful life of the gas or
electric system. The value to the gas or electric
electrical corporation shall take into consideration the
expenditures by the park or community owner to comply with the
criteria established in Section 2794.
(3) Present a proposal, in sufficient detail to serve as a bid
document for the transfer of ownership of the system to the gas or
electric electrical corporation.
(b) The proposal may be based on either of the following
approaches or as the park or community owner and the gas or
electric electrical corporation mutually agree:
(1) The park or community owner is responsible for all
construction and equipment replacement activity, if any, at the park
or community owner's expense less any credits or allowances, if any,
including credits or allowances based on incremental increases in the
gas or electric electrical corporation'
s revenues associated with the park or community owner's investment
in the gas or electric system. The construction and equipment
replacement and the credits and allowances shall be based on the
principles established in the gas or electric
electrical corporation's line and service extension rules, if
applicable.
(2) The gas or electric electrical
corporation shall pay the park or community owner for the appraised
value to the gas or electric electrical
corporation of any gas or electric distribution facilities found to
be used, useful, and compatible. If any new facilities are necessary,
the park or community owner shall be responsible for the costs of
the excavation, installation of substructures, conduit and meter
panels, and surface repairs. Except as provided in paragraph (4) of
subdivision (c), the gas or electric
electrical corporation shall be responsible for the costs of
any additional construction and equipment replacement, including
cabling and transformers.
(c) The proposal shall include the following:
(1) A description of construction and equipment replacement
activity, if any, to be accomplished at the park or community owner's
expense.
(2) Requirements for any additional provisions or rights for the
construction or maintenance of public utility facilities on park or
community premises, including easements and rights-of-way acceptable
to the gas or electric electrical
corporation.
(3) Any specific requirements or costs, or both, with respect to
the presence of used and useful materials or equipment that are
nonstandard, including, but not limited to, inventory requirements,
specialized equipment requirements, or specialized personnel or
training.
(4) Any specific requirements or costs, or both, with respect to
the presence of exceptional construction conditions or operation and
maintenance conditions.
(d) If the actual cost of the engineering evaluation is greater
than the gas or electric electrical
corporation estimate, the park or community owner shall pay the gas
or electric electrical corporation the
difference within 30 days of receipt of notice. If the actual cost of
the engineering evaluation is less than the deposit, the gas or
electric electrical corporation shall
pay the park or community owner the difference within 30 days. The
content of the proposal shall become the property of the park or
community owner.
(e) Within 90 days of receipt of the proposal for transfer of
ownership, a park or community owner may do any of the following:
(1) Present objections to the gas or electric
electrical corporation in writing for resolution and may
require mediation of the commission if the parties are unable to
resolve the objection. In any mediation, the commission, at the
expense of the gas or electrical corporation, shall obtain the
services of an independent qualified professional to evaluate the
system inspection and valuation and to advise the commission.
(2) Decline to proceed, without prejudice to the right to present
a new notice at any future date.
(3) Accept the proposal and contract with the gas or
electric electrical corporation for completion
of the construction work and equipment replacement, if any, or the
acquisition of the gas or electric system, or both.
(4) Accept the proposal and contract with an approved third party
for completion of the construction work and equipment replacement, if
any, in accordance with the applicable gas or electric
electrical corporation applicant installation
rules.
(f) Any new facilities provided by the gas or electric
electrical corporation to extend distribution or
service facilities from the existing gas or electric
electrical corporation system within the park to
previously undeveloped locations shall be provided in accordance
with line extension rules and service extension rules contained in
gas or electric electrical corporation
tariffs filed with the commission, including any and all free
extensions, allowances, and advances subject to refund.
(g) Upon completion of construction work and equipment
replacement, if any, receipt of appropriate inspection approval from
the gas or electric electrical
corporation and authorities having jurisdiction for the inspections,
and completion of all financial transactions among the parties, the
park or community owner shall transfer and the gas or
electric electrical corporation shall acquire
ownership and operational responsibility for the gas or electric
system.
(h) Upon receipt of the proposal described in paragraph (3) of
subdivision (a), the park or community owner shall notify the park
residents concerning the pendency of a transfer process request and
the provisions of the transfer process law.
SEC. 4. Section 2794 of the Public Utilities Code is amended to
read:
2794. (a) If a gas or electric system is acceptable for
transfer pursuant to the criteria in this section, the gas or
electrical corporation shall approve the transfer, accept ownership
and operational responsibility, and purchase, the gas or electric
system. A gas or electric system shall be considered
acceptable for transfer if it is in compliance with the
following criteria:
(1) It was constructed to meet the building and safety regulatory
standards in effect at the time of construction.
(1)
(2) It is capable of providing the end users a safe and
reliable source of gas or electric service.
(2)
(3) It meets the commission's general orders, is
compatible, and, in the case of new construction only ,
meets the gas or electric electrical
corporation's design and construction standards insofar as they are
related to safety and reliability. The parties may waive these
requirements by mutual agreement and, where necessary, with
commission approval. The deviations as are agreed upon may be
reflected in the purchase price.
(4) For a gas system, it meets any applicable federal safety
standards adopted by the Pipeline and Hazardous Materials Safety
Administration of the Department of Transportation, or a successor
federal entity, including any applicable minimum federal safety
standards in Part 192 of Title 49 of the Code of Federal Regulations.
(3)
(5) It is capable of serving the customary expected
load in the park or community determined in accordance with a
site-specific study, studies of comparable parks or communities,
industry standards, and the gas or electric
electrical corporation's rules as approved by the commission.
(b) As used in this section, "customary expected load" means the
anticipated level of service demanded by the existing
dwelling units in the park or community. The park or community owner
shall not be responsible for betterments or improvements to the gas
or electric electrical corporation's
distribution system facilities or operations that do not benefit the
park or community , in contrast to those that benefit the gas or
electrical corporation or its other customers .
(c) Satisfaction of the criteria shall not require any particular
system architecture or replacement of used and useful equipment,
plant, or facilities, except as needed to comply with subdivision
(a). Equipment, facilities, or plant that are part of the existing
gas or electric system shall be considered compatible unless their
presence in the system would cause substantial increase in the
frequency or duration of outages in the case of failure or emergency,
or they have no remaining useful life. Pursuant to subdivision (c)
of Section 2793, equipment, facilities, or plant that require special
training for the gas or electric electrical
corporation's employees, or require the gas or
electric electrical corporation to maintain
inventories of nonstandard equipment may be considered compatible,
but their presence may be reflected in the appraised value or the
cost imposed on the park or community owner. The appraised value
shall include the value of eliminating the submeter discount. For
purposes of this subdivision and Section 2797, "submeter discount"
means the differential between the master-meter rate paid by the
operator of the master-metered mobilehome park or manufactured
housing community to the gas or electrical corporation, as fixed by
the commission pursuant to Section 739.5, and the applicable rate
charged by the gas or electrical corporation to its customers that
are not master-meter customers.
SEC. 5. Section 2795 of the Public Utilities Code is amended to
read:
2795. The park or community owner and the gas or
electric electrical corporation shall develop a
cost for the transfer of the gas or electric system that reflects the
factors in Section 2793, indemnity and liability issues, and any
other factors as the parties may mutually agree upon, and to which
the gas or electric electrical
corporation's ratepayers are indifferent. The parties may agree on a
schedule for phasing in facilities to meet expected load increases
and betterments, and the costs associated with those activities.
SEC. 6. Section 2796 of the Public Utilities Code is amended to
read:
2796. (a) During the pendency of a transfer request, the owner of
the park or community shall be responsible for the continued
maintenance to preserve the integrity of the park or community gas or
electric system and safe and reliable operation of the park or
community system in accordance with applicable laws.
(b) During the pendency of a transfer request the owner of the
park or community shall be liable for injury and damage resulting
from operation of the submetered gas and electric system. After
transfer , the gas or electric
electrical corporation shall assume responsibility for
operation of the gas or electric system and provision of service to
residents of the park or community and shall assume liability for any
future injury or damage resulting from operation of the gas or
electric system except with respect to defects known to the park or
community owner and not disclosed to the gas or electric
electrical corporation during the transfer of
ownership process.
SEC. 7. Section 2797 of the Public Utilities Code is amended to
read:
2797. The commission shall permit the gas or electric
electrical corporation to recover in its revenue
requirement and rates all costs to acquire, improve, upgrade,
operate, and maintain transferred mobilehome park or manufactured
housing community gas or electric systems. In any application to
recover costs pursuant to this section, a gas or electrical
corporation shall include a calculation of the utility's net
costs to acquire, improve, upgrade, operate, and maintain
transferred mobilehome park or manufactured housing
community gas or electric systems, including add itional
income resulting from the elimination of the submeter discount.
SEC. 8. Section 2798 of the Public Utilities Code is amended to
read:
2798. (a) The commission shall adopt a
standard form of agreement for transfer of gas and electric
distribution facilities in mobilehome parks and manufactured housing
communities that shall be the basis for expedited approval of the
transfers. The contract shall be based on this chapter, the
regulations of the commission, and on gas or electric
electrical corporation rules and regulations, as
approved by the commission.
(b) The owner of a master-metered mobilehome park or manufactured
housing community may bring a complaint before the commission for
violation of any requirement of this chapter by a gas or electrical
corporation. The commission shall establish an expedited procedure,
pursuant to Article 1 (commencing with Section 1701) of Chapter 9 of
Part 1, for the review of the complaint. The commission shall ensure
that the expedited procedure results in a final determination of the
issues raised by the complaint not later than one year after filing
of the complaint. Nothing in this subdivision limits the authority of
the commission to open an appropriate proceeding in order to monitor
and facilitate the transfer pursuant to subdivision (e) of Section
2792.
SEC. 9. Section 2799 of the Public Utilities Code is amended to
read:
2799. (a) The mobilehome park or manufactured housing community
owner may, by written notice, stop the transfer process at any time.
Within 60 days of delivery to the park or community owner of an
itemized bill, the owner shall reimburse the gas or electric
electrical corporation for all costs incurred
through the date notice is provided.
(b) At any time during the transfer of ownership process, either
party may apply to the commission for informal mediation and
resolution of any issue, finding, determination, or delay in the
conversion process.
(c) If the initiation of the transfer process does not result in a
transfer of the park or community owner's gas or electric system to
the gas or electric electrical
corporation, all information, data, reports, studies, and proposals
shall be retained by the gas or electric
electrical corporation for a period of five years or offered to
the park or community owner. Prior to disposal of the records, the
gas or electric electrical corporation
shall offer them to the park or community owner, except that the gas
or electric electrical corporation
shall not be required to provide proprietary information to the park
or community owner.