BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 724|
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THIRD READING
Bill No: AB 724
Author: Bradford (D)
Amended: 8/18/11 in Senate
Vote: 21
SENATE ENERGY, UTILITIES & COMMUNIC. COMM. : 7-1, 6/21/11
AYES: Padilla, Berryhill, Corbett, De Le�n, DeSaulnier,
Rubio, Simitian
NOES: Fuller
NO VOTE RECORDED: Pavley, Strickland, Wright
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 62-15, 5/23/11 - See last page for vote
SUBJECT : Electric and gas utility service: master-meter
customers
SOURCE : Author
DIGEST : This bill requires the Public Utilities
Commission (PUC) to open an appropriate proceeding to
evaluate when an owner of a mobilehome park (MHP) should
transfer gas or electric systems with unsafe or substandard
conditions to the utility. This bill requires the 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 MHP should transfer
responsibility for service to the gas or electric utility.
These provisions will be repealed on January 1, 2014.
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ANALYSIS :
Existing law:
1. Permits owners of MHPs constructed prior to 1997 to
provide gas and
electric service to MHP tenants and requires that the
MHP owner (the master-meter) charge the same rate for
gas and electric service that would be applicable if the
tenant received service from an investor-owned utility
(IOU).
2. Establishes a mechanism which, at the option of the MHP
owner, compels an IOU to accept the transfer of a gas or
electric system if the system can safely and reliably
provide service to its existing customers, the system
meets the standards of general orders by the PUC, and
the system is capable of serving the customary expected
load of the MHP.
3. Requires the IOU to compensate the MHP for the value of
the gas or electric system based on an appraisal
including specified factors and indemnity and liability
issues. The IOU's ratepayers must be held indifferent
to the costs of the transfer.
4. Permits either party to the transfer to apply to the PUC
for informal mediation and resolution of any issue,
finding, determination, or delay in the transfer
process.
Background
Mobilehome Parks - The state of California has
approximately 4,800 MHPs with over 340,000 residents.
Approximately 88 percent of the state's 4,800 parks are
more than 40 years old and many are likely to have an
outdated gas and/or electrical infrastructure that is both
a problem for tenants with modern appliances and a public
safety concern. Most parks are "master metered," meaning
that the MHP owner is the utility, receiving service
through a single meter. The electricity is then
distributed to tenants who are billed by the MHP owner
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based on usage or the service costs are split
proportionately.
MHP Costs: The Differential - MHP owners are required to
charge the same rates for electricity and natural gas that
would be applicable if the IOU served the tenant directly.
The IOUs are required to provide the electricity and
natural gas to the MHP owner at a discount. The discount,
also referred to as the differential, is intended to
reimburse the MHP owners for the reasonable average cost of
providing sub-metered service to the tenants. According to
the PUC, the differential represents the "average cost that
the utility would have incurred in providing comparable
services to the tenant directly, which is avoided when the
mobile-home park is submetered." It includes operation and
maintenance expenses and capital investment costs including
capital expenditures for "replacement, and improvement of
the distribution system and service facilities." As an
example, in 2009 MHP owners in PG&E's service territory
received a discount of approximately $0.37 per day per
tenant.
Park Transfer Process - In 1996, the Legislature
established a statutory framework that allows a MHP owner
to compel the transfer of the MHP utility system to an IOU
if the condition of the system satisfies three criteria:
It is capable of providing the end user a safe and
reliable source of gas or electric service;
It meets PUC's general orders and safety and reliability
standards; and
It is capable of serving the customary expected load in
the park or community.
An appraisal of the system is required and the IOU must
compensate the MHP owner for that value, if any. If there
is disagreement among the parties, either party can apply
to the PUC for mediation. There have been very few park
transfers since the 1996 legislation was adopted.
Comments
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According to the author's office, 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.
Prior Legislation
AB 1108 (Fuentes, 2009) would have required MHP owners of
sub-metered utility systems to transfer ownership of their
gas or electric systems to the IOU and would have required
the PUC to open a proceeding to develop procedures and
schedules for the transfers. The bill was held in Senate
Appropriations Committee.
SB 1097 (Strickland, 2010) would have required electric and
natural gas utilities to accept the transfer of electricity
or natural gas systems serving master-metered MHPs,
provided that certain criteria were met. The bill was held
in Senate Appropriations Committee.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
ASSEMBLY FLOOR :
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Davis, Dickinson, Eng, Feuer,
Fletcher, Fong, Fuentes, Furutani, Galgiani, Gatto,
Gordon, Hall, Hayashi, Roger Hern�ndez, Hill, Huber,
Hueso, Huffman, Jones, Lara, Bonnie Lowenthal, Ma,
Mendoza, Miller, Mitchell, Monning, Nestande, Norby,
Olsen, Pan, Perea, V. Manuel P�rez, Portantino, Skinner,
Smyth, Solorio, Swanson, Torres, Valadao, Wieckowski,
Williams, Yamada, John A. P�rez
NOES: Conway, Donnelly, Beth Gaines, Garrick, Grove,
Hagman, Harkey, Jeffries, Knight, Logue, Mansoor,
Morrell, Nielsen, Silva, Wagner
NO VOTE RECORDED: Cook, Gorell, Halderman
RM:mw 8/23/11 Senate Floor Analyses
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SUPPORT/OPPOSITION: NONE RECEIVED
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