California Senate Bill SB1097 Amended / Bill

 BILL NUMBER: SB 1097AMENDED BILL TEXT AMENDED IN SENATE APRIL 27, 2010 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 amended, Strickland. Gas and electric utility service: master-meter customers.  (1) Under   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 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 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. (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 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 electrical corporation, shall not be passed through to the gas or electrical corporation, except as otherwise provided in this chapter. (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 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 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 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 electrical corporation at the owner's expense. (b) The gas or 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 electrical corporation shall give the owner timely notice of any increase in the estimated cost of the engineering evaluation. (c) The gas or 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 electrical corporation's estimated cost of the engineering evaluation, the gas or 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 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 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 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 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 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 electrical corporation's line and service extension rules, if applicable. (2) The gas or electrical corporation shall pay the park or community owner for the appraised value to the gas or 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 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 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 electrical corporation estimate, the park or community owner shall pay the gas or 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 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 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 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 electrical corporation applicant installation rules. (f) Any new facilities provided by the gas or electrical corporation to extend distribution or service facilities from the existing gas or 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 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 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 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 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. (2) It is capable of providing the end users a safe and reliable source of gas or electric service. (3) It meets the commission's general orders, is compatible, and, in the case of new construction only, meets the gas or 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. (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 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 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 electrical corporation's employees, or require the gas or 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 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 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 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 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 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 additional 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 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 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 electrical corporation, all information, data, reports, studies, and proposals shall be retained by the gas or 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 electrical corporation shall offer them to the park or community owner, except that the gas or electrical corporation shall not be required to provide proprietary information to the park or community owner.