BILL ANALYSIS �
AB 724
Page 1
ASSEMBLY THIRD READING
AB 724 (Bradford)
As Amended May 17, 2011
Majority vote
UTILITIES & COMMERCE 12-0
APPROPRIATIONS 13-3
-----------------------------------------------------------------
|Ayes:|Bradford, Fletcher, |Ayes:|Fuentes, Blumenfield, |
| |Buchanan, Fong, Fuentes, | |Bradford, Charles |
| |Carter, Roger Hern�ndez, | |Calderon, Campos, Davis, |
| |Huffman, Ma, Nestande, | |Gatto, Hall, Hill, Lara, |
| |Skinner, Swanson | |Mitchell, Norby, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Harkey, Nielsen, Wagner |
| | | | |
-----------------------------------------------------------------
SUMMARY : Requires the California Public Utilities Commission
(PUC) to open an appropriate proceeding to evaluate when an
owner of a mobile home park should transfer gas or electric
systems with unsafe or substandard conditions to the utility.
Specifically, this bill requires PUC to open an investigation or
other appropriate proceeding by February 1, 2012, to evaluate
when an owner of a master-metered gas or electric service mobile
home park should transfer responsibility for service to the gas
or electric utility.
FISCAL EFFECT : According to the Assembly Appropriation
Committee, negligible fiscal impact, as PUC is currently
conducting a proceeding on the subject of this bill.
COMMENTS : According to the author, the purpose of this bill is
to ensure residents of master- metered/submetered mobile home
parks are provided with safe and reliable gas or electric
service at reasonable rates while at the same time improving
public safety and grid reliability.
1)Background : Over 1,500 mobile home parks 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
AB 724
Page 2
park owner and a submeter is located at each tenant's mobile
home. 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.
2)Transfer requirements : For more than a decade, state policy
has disfavored the continuation of master-meter/submeter
systems. Public Utilities Code Section 2791(c) requires the
direct-metering of electric and/or natural gas service in
mobile home parks constructed after January 1, 1997. For
those mobile home parks constructed prior to 1997, a transfer
is a voluntary process. To be transferable, a mobile home
park submeter system must meet certain criteria such as it
being a safe and reliable source of electric or natural gas,
it must comply with PUC's general orders and be compatible
with the utility's design and construction standards and it
must be capable of serving the expected load at the mobile
home park.
Upon receipt of a mobile home park owner's request to transfer
the submeter system, the utility must perform an inspection of
the system to determine its condition and develop an appraisal
of the system's value. If the park owner accepts the
utility's proposal, they can proceed with a transfer of the
system. Thus, in most cases, there is disagreement among both
parties about the cost to transfer the submeter system which
leads to the park owner deciding to retain ownership of the
system.
3)Issue : This bill directs 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. 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. This raises two issues. First, the
park owner may not necessarily have the expertise, financial
ability or equipment to provide these services adequately.
Lastly, PUC's authority to regulate utility infrastructure
ends at the master-meter. Consequently, the lack of
regulation of privately-owned distribution systems could
impose a significant threat to public safety and overall grid
reliability.
AB 724
Page 3
4)Regulatory action : On February 24, 2011, PUC opened a
rulemaking, at the petition of Western Manufactured Housing
Communities Association, to examine what PUC can and should do
to encourage the replacement by direct utility service of the
master-meter/submeter systems that supply electricity, natural
gas, or both to mobile home parks and manufactured housing
communities located within the franchise areas of electric
and/or natural gas corporations. The 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. Some parties represented that this
bill may unintentionally disrupt PUC rulemaking that is well
underway.
5)Related legislation : This bill is similar to AB 1108
(Fuentes) of 2009 that died in the Senate.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083
FN: 0000607