BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 724
                                                                  Page  1

          Date of Hearing:   May 11, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                   AB 724 (Bradford) - As Amended:  April 28, 2011 

          Policy Committee:                              
          UtilitiesVote:12-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:

           SUMMARY  

          This bill:

          1)Requires the Public Utilities Commission (PUC) to open a 
            proceeding to evaluate when the owner of a mobilehome park 
            providing master-metered gas or electric service to its 
            residents should be required to transfer this service and 
            facilities to the investor-owned gas or electrical utility in 
            its service area.

          2)Requires the PUC to report its conclusions to the Legislature 
            by July 1, 2013.

           FISCAL EFFECT  

          Negligible fiscal impact, as the commission is currently 
          conducting a proceeding on the subject of this bill.

           COMMENTS  

           1)Background  . Over 1,500 mobilehome park owners provide 
            electricity to their tenants through a master meter, i.e. the 
            park owner receives electricity from the utility at a master 
            meter and 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 billed by 
            the park owner for their electricity use in the same way a 
            utility would bill the tenant if the tenant was 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 








                                                                  AB 724
                                                                  Page  2

            is set as an amount per occupied space.

           2)Purpose  . Essentially, park owners who are master-meter 
            customers are acting as a public utility.  Park owners are 
            responsible for the same functions as utilities including 
            maintaining, repairing and replacing the distribution systems, 
            even though an owner may not necessarily have the expertise, 
            financial ability or equipment to adequately provide these 
            services. Moreover, because the PUC's authority to regulate 
            utility infrastructure ends at the master-meter, the lack of 
            regulation of privately-owned distribution systems could 
            impose a threat to public safety and overall grid reliability.

            This bill directs the PUC to open an investigation or 
            proceeding to evaluate when a park owner that provides 
            master-metered gas or electric service should be required to 
            transfer service to the utility.  As mentioned above, the 
            commission opened a rulemaking in February to examine what the 
            PUC can and should do to encourage the replacement by direct 
            utility service of the master-meter/submeter systems. This 
            proceeding will also consider safety and reliability, transfer 
            prioritization and reasonableness of cost allocation of the 
            master-meter/submeter systems.  This proceeding essentially 
            mirrors the author's intentions for this bill.

           3)Suggested Amendments  . Since the PUC's proceeding on this 
            subject will result in a written document of the commission's 
            findings that will be readily available to anyone, there is no 
            need for a report on this proceeding to be submitted to the 
            Legislature. It is therefore recommended that subdivisions (b) 
            and (c) be deleted along with the phrase "and report to the 
            Legislature" from subdivision (a).

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081