Resolution Template - California



PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Item 8 (Rev.1) Agenda ID 15931ENERGY DIVISIONRESOLUTION E-4878September 28, 2017RESOLUTIONResolution E-4878. Authorization to continue and expand the Mobile Home Park Utility Upgrade Pilot Program (MHP Pilot) for currently participating electric and gas utilities. PROPOSED OUTCOME: Authorization for all currently participating electric and gas utilities to continue their MHP Pilot until the earlier date of either December 31, 2019, or the issuance of a Commission Decision for the continuation, expansion or modification of the program beyond December 31, 2019. The number of spaces converted in years 2018 and 2019 may not exceed the levels specified in the utility’s respective advice letter filing.SAFETY CONSIDERATIONS:Continuation of the MHP Pilot for electric and gas utilities will increase the safety of Mobilehome Parks for its residents.ESTIMATED COST: A minimum of $70 million to extend the Utility Upgrade program from January 1, 2018 to December 31, 2019. By Pacific Gas and Electric Company (PG&E) Advice Letter (AL) 3822-G/5033-E, Filed on March 17, 2017. By PG&E Supplemental Advice Letter 3822-G-A/5033-E-A, Filed on March 28, 2017. By PG&E Supplemental Advice Letter 3822-G-B/5033-E-B, Filed on August 10, 2017By Southern California Edison Company (SCE) AL 3576-E, Filed on March 17, 2017. By San Diego Gas & Electric Company (SDG&E) AL 3057-E/2563-G, Filed on March 17, 2017. By Liberty Utilities (CalPeco Electric) LLC AL 76-E, Filed on April 18, 2017. By Southern California Gas Company (SoCalGas) AL 5106-G, Filed on March 17, 2017. By Southwest Gas Corporation (Southwest Gas) AL 1035-G, Filed on March 17, 2017. __________________________________________________________SummaryDecision (D.) 14-03-021 authorized a three year pilot program to convert mobilehome parks and manufactured housing communities (collectively, MHPs) to direct utility service. The program is scheduled to end December 31, 2017. Pursuant to Ordering Paragraph (OP) 13 of D.14-03-021, this Resolution authorizes all currently participating electric and gas utilities to continue their Mobile Home Park Utility Upgrade Pilot Program until the earlier date of either December 31, 2019, or the issuance of a Commission Decision for the continuation, expansion or modification of the program beyond December 31, 2019. The number of spaces converted in years 2018 and 2019 may not exceed the levels specified in the utility’s respective advice letter filing. BackgroundMany residents of MHPs built in California before 1997 do not receive electricity and/or natural gas directly from the utility providing distribution level service. Instead, the utility serves a master-meter customer (typically, the MHP owner or operator) who then distributes the electricity, natural gas, or both to individual coaches or homes at the MHP through a privately owned submeter system. Effective 1997, Public Utilities (PU) Code §§ 2791-2799 required:All mobilehome parks (MHP) constructed after January 1, 1997, provide directly metered natural gas and/or electric service to individual coaches/manufactured homes.MHP owners transfer existing master-meter/submeter systems at MHPs constructed prior to January 1, 1997 to utility ownership and control, if those systems meet specified requirements.The costs of the transfer process not be passed through to MHP residents. Central to the issue was the safety, reliability and reasonably priced delivery of electricity, natural gas, or both to residents of mobilehome parks and manufactured housing communities served in areas within electric and/or natural gas corporations regulated by the Commission. Despite the provisions of the above PU Code, only approximately two dozen master-meter/submeter gas and electric systems had been converted since 1997.In 2010, the Western Manufactured Housing Community Association (WMA) filed a petition urging the CPUC to review this historical deficiency in conversions. In response, the CPUC issued an Order Instituting Rulemaking (R.) 11-02-018 to: “examine what the Commission 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 mobilehome parks and manufactured housing communities located within the franchise areas of electric and/or natural gas corporations.”R.11-02-018 was initiated on February 24, 2011. On March 13, 2014, the Commission adopted Decision (D.) 14-03-021 which:Approved a three-year Mobile Home Park Utility Upgrade Pilot Program (January 1, 2015 to December 31, 2017) to incentivize voluntary conversion of 10% of the master-metered residential spaces in each utility’s service territory to direct utility service.Applied to both electric and gas services.Included “to-the-meter” and “beyond-the-meter” distribution system conversions.Allowed utilities to enter actual program costs in a balancing account, and recover both “to-the-meter” and “beyond-the-meter” in General Rate Cases (GRCs).All electric and gas utilities (IOUs) submitted Advice Letters (AL) to the Commission for approval to implement their MHP Pilot and new electric and/or gas tariffs. The Commission approved these ALs and electric and gas tariffs. The IOUs were required to file annual reports to Energy Division and Safety and Enforcement Division (SED) on February of 2016, 2017, and 2018 to provide program status, identify construction costs, and provide assessments of the 3-year pilot program. D.14-03-021 OP 13 states that any utility may file a Tier-2 AL within 45 days of the second annual status report to request continuation of the conversion program if the actual experience to that point appears to warrant continuation of the program without major modification. PG&E, SCE, SDG&E, CalPeco Electric, SoCalGas, and Southwest Gas (collectively, the IOUs) filed ALs to request continuation and expansion of the conversion program.On May 5, 2017, SoCalGas and SDG&E filed applications to convert an additional 10% to 20% of MHPs and to continue the program to 2023 (Application 17-05-007 and Application 17-05-008, respectively). NoticeNotices of AL 3822-G/5033-E, 3822-G-A/5033-E-A, 3822-G-B/5033-E-B, AL 3576-E, AL 3057-E/2563-G, AL 76-E, AL 5106-G, and AL 1035-G were made by publication in the Commission’s Daily Calendar. PG&E, SCE, SDG&E, CalPeco Electric, SoCalGas, and Southwest Gas state that a copy of the Advice Letter was mailed and distributed in accordance with Section 4 of General Order 96-B. ProtestsPG&E AL 3822-G-A/5033-E-A, SCE AL 3576-E, SDG&E AL 3057-E/2563-G, CalPeco Electric AL 76-E, SoCalGas AL 5106-G, and Southwest Gas AL 1035-G were protested. The Utility Reform Network (TURN) filed a late protest on April 21, 2017 to ALs from PG&E, SDG&E, SoCal Gas, and Southwest Gas. TURN filed an amended protest on June 21, 2017 to all the IOUs ALs. TURN’s initial protests recommended the Commission reject the ALs and direct the IOUs to refile the ALs with additional information because the ALs did not include an assessment and results of the pilot programs, the actual costs incurred from the pilot programs, or the impacts of those costs on ratepayers. TURN argued that the ALs also failed to provide any concrete justification to expand the MHP conversion programs and details on the impacts of the expansions. TURN’s amended protests recommended the Commission reject the ALs with prejudice and require the IOUs to submit formal applications because the magnitude of the cost increases and numerous issues raised in the ALs require development of an evidentiary record and the judgment of the full Commission. TURN argues that it is inappropriate for the Commission to contemplate a major expansion of the pilot program through the advice letter process. However, TURN did not protest the utilities’ requests to continue the existing pilot program through 2018 to complete the 10% goal of the program.The IOUs that received the initial protest from TURN replied on April 21, 2017. All the IOUs replied to TURN’s amended protest on June 28, 2017, except CalPeco Electric who replied on June 27, 2017. PG&EIn response to TURN’s protests, PG&E argues that it has submitted annual reports to the Commission regarding the progress of the program. PG&E contends that the merits of the pilot program have been detailed in the original decision and related proceedings and was not a requirement of the AL filing per the Decision. In addition, PG&E states that it has submitted cost accounting to the Commission and will work with the Energy Division to provide additional cost information if necessary. Through the MHP Pilot, PG&E has detected and eliminated many gas leaks found at participating mobile home parks. Hence, according to PG&E, the MHP Pilot is warranted to promote improved safety in the distribution of natural gas and electricity.In response to TURN’s amended protest, PG&E maintains that requiring utilities to submit an application to continue the MHP Pilot beyond the pilot period, was a suggestion by the Office of Ratepayer Advocates (ORA) in the rulemaking proceeding. However this provision was not adopted into the final decision. Hence, PG&E appropriately followed this process specified in the decision when filing AL 3822-G/5033-E. PG&E also states that the advice letter process avoids a costly and time-consuming relitigation of the CPUC's ruling. Therefore, the MHP Pilot with its important safety and reliability benefits can be continued without interruption. Furthermore, those delays would likely result in a suspension of MHP Pilot upgrade activities, which would have tangible cost impacts to restart the program.On August 10, 2017, PG&E filed a second Supplemental filing to delete changes to the tariff sheets originally included in AL 3822-G/5033-E, filed March 17, 2017 and in AL 3822-G-A/5033-E-A, filed March 28, 2017. PG&E also requests removal of the section with heading title “Program Continuation.” PG&E explains that the changes are in response to TURN’s concerns. With these changes, PG&E states that TURN supports completion of the pilot into 2018 as PG&E proposed and the proposed changes in PG&E’s second Supplemental filing. Southwest GasIn response to TURN’s protest, Southwest Gas argues that its AL 1035-G is consistent with OP 13 of D.14-03-021. Southwest Gas states that TURN is attempting to re-litigate an issue that was resolved in the rulemaking. Southwest Gas also states it does not seek to expand the MHP Pilot. No modifications are proposed to the framework of the existing pilot and a reasonableness review of the expanded program costs would be conducted as part of the subsequent general rate case. Southwest Gas seeks to continue the MHP Pilot under the same parameters (including cost recovery) under which the pilot is currently being conducted and as such, Southwest Gas AL 1035-G falls under the parameters of D.14-03-021, OP 13 for continuation of the MHP Pilot.Southwest Gas further states that D.14-03-021 clearly says that a reasonableness review of costs incurred during the pilot period will occur in the utilities’ respective general rate cases. Therefore, continuation of the program, particularly for utilities like Southwest Gas who seek to expand the MHP program without modifications to the framework of the existing pilot can be evaluated through a Tier 2 AL as supported by OP 13 of D.14-03-021.SCESCE argues that in the rulemaking proceeding, the Office of Ratepayer Advocates (ORA) proposed that the Commission require the utilities submit an application for continuation of the MHP Pilot beyond the pilot period; however this provision was not adopted into the final decision. SCE states the Commission specifically contemplated the argument that the MHP Pilot should only be extended and expanded through an application, but rejected ORA’s proposal by adopting OP 13 of the Decision. Therefore, because the Commission did not adopt that ORA’s approach, SCE argues that if TURN challenges the procedural venue, TURN must file a petition to modify the Decision. General Order 96-B, Section 5.1 provides that the AL process is appropriate where the utility “has been authorized or required… by other Commission order, to seek the requested relief by means of an Advice Letter…” Hence, OP 13 of the Decision has specifically authorized the utilities to seek this relief. SCE is seeking continuation of the same program, without major modification, without significant cost changes per unit, and using existing and approved ratemaking treatment. Therefore, SCE argues the AL in this proceeding is ministerial. SCE also states that it records program costs for the MHP program in a balancing account, and the costs are subject to reasonableness review in SCE’s next General Rate Case (GRC).CalPeco ElectricIn response to TURN’s protests, CalPeco states that it does not propose any modifications to the existing MHP Pilot approved in D.14-03-021 and set forth in its tariffs. CalPeco argues that its request to continue the program does not result in a significant expansion of the MHP Pilot because it involves a total of only 180 additional spaces. CalPeco also states that it seeks to continue the MHP Pilot to ensure that its mobile home park customers receive safe and reliable electric service.SDG&E and SoCalGasSoCalGas and SDG&E filed similar replies in response to TURN’s protest. SoCalGas and SDG&E’s justifications for continuing the MHP Pilot include the following: 1) the conversions are in compliance with current safety standards, 2) the program increases safety and reliability, 3) no OSHA or Lost Time Safety incidents have occurred, 4) the program has received high customer satisfaction, and 5) new eligible customers have been identified for the California Alternate Rates for Energy and Medical Baseline Allowance programs.SDG&E and SoCalGas also state that the Commission has already considered the policy arguments for and against the MHP Pilot and its various components, as well as costs, and ordered the initial step of the MHP Pilot to commence. SDG&E and SoCalGas contend that TURN’s end goal is to re-litigate the MHP Pilot and this should only be done by a petition for modification.Furthermore, SDG&E argue that the Commission ordered that a request to continue the MHP Pilot could be done by advice letter despite ORA’s proposal to require an application to be filed after the second year of the MHP Pilot in order to continue the program. This is consistent with the Commission’s stated goal “[t]o ensure the pilot can be flexibly extended to permit further, voluntary conversions.” SDG&E and SoCalGas have filed applications to continue the MHP Pilot to include an additional twenty percent of spaces within SDG&E and SoCalGas’ territories (Application 17-05-008 and Application 17-05-007, respectively). Letters of supportOn April 2, 2017, the Western Manufactured Housing Community Association (WMA) sent a letter of support for the advice letter filings by PG&E, SCE, Southwest, SDG&E and SoCalGas. As an initial proponent of the program back in 2011, WMA agrees with the utilities that the program has been successful and should be continued. The City of Chula Vista and the City of Vista also each submitted a letter to the Commission on April 2, 2017 to support SDG&E’s AL.DiscussionEnergy Division has reviewedWe have reviewed the ALs filed by the IOUs. Below in Table 1 and 2 are summaries of utility requests and status of their MHP pilot programs:Table 1: Electric Utilities Advice Letter Request and Current Program Status?PG&ESCESDG&ECalPeco ElectricSummary of RequestContinue the MHP conversion program thru 12/31/2018 - address "Category 2 " MHPs (8,335 spaces) - convert ~2%/year - NO new application - balance account remain OpenContinue beyond 2018Revise Rule 28Continue the MPH conversion program for another 6 yearsConvert additional 20% of MHPContinue to record to MMMA Revise Rule 27Continue the MPH conversion program thru 2018Convert additional 5% of MHP as a bridge until decision on the applications to convert in 2018 and 20% thru 2023Continue to record to MMMAMMBAAccept new applicationRevise Rule 44Continue the MHP conversion program to 2021 Convert all Tier 2 (91 spaces), Tier 3 (346 spaces), and all other Parks. Total 526 spacesAccept newApplicationRevise Rule 23Date to Extend the ProgramContinue beyond 20182018 - 20232018 - 20232018 - 2021Current Program StatusAs of 12/31/2016: ? Scheduled 150 MHPs (10,652 spaces) ? Opted out 26 MHPs ? Remaining 124 MHPs (8,910 spaces) ? $22.8 M for completed 13 MHPs/635 Gas spaces & 525 Electric spaces ? $64.3 M for in-progress work of 28 MHPs/3,170 spacesAs of 1/2/2017: ? Scheduled 172 MHPs (10,133 spaces) ? $18,580,076 for completed 29 MHPs/1,622 spaces As of 12/31/2016: ? Scheduled 15030 MHPs (3,344 spaces) ? $11,541,080 for completed 6 MHPs/411 gas and electric spaces ? In-progress work of 16 MHPsAs of 2/1/2017: ? Scheduled 2 MHPs (67 spaces) ? $106,768.97 for completed 0 MHPs/0 spaces ? Skylark MHP: Estimated Completion Date: 8/31/2017 ? Kings Beach MHP: Estimated Completion Date: 6/31/2018Cost/Space (Projected) $23,001.00 $22,319.00 $28,529.00 $7,252.00 Cost/Space (Actual) $39,928.00 $11,455.03 $28,080.49 Not availableTable 2: Gas Utilities Advice Letter Request and Current Program Status?SoCalGasSouthwest GasSummary of Request ? Continue the current MHP conversion program to complete 10% goal as authorized in D.14-03- 021 thru 2018 ? Convert additional 5% of MHP as a bridge until decision on the application to convertin 2018 and 20% thru 2023 requested in new application ? Continue to record to MMMBA ? Accept new application ? Revise Rule 44 ? Convert all Tier 2 (588 spaces) in 2018 and begin Tier 3 conversions Jan 1, 2019 (2,808 spaces at rate of 560 spaces per year) through 2023 ? Does not propose any modifications to existing MHP program approved in D.14-03-021 Date to Extend the Program2018 - 20232018 - 2023Current Program StatusAs of 12/31/2016: ? $15,843,099 for completed 32 MHPs/1,665 spaces (approx. 9%) ? Additional 59 MHPs in various stages of construction ? Expects to complete the conversion of its Tier 1 MHPs in 2017 (412 spaces in 7 MHPs) Cost/Space (Projected)$10,703.00 $2,047.00 Cost/Space (Actual)$9,515.37 Not AvailableD.14-03-021 stated that the intent of the yearly status reports would allow the Commission to consider continuing the pilot before the end of the initial, three year term (and also enable the Commission to consider making other adjustments, as necessary or appropriate). However, the decision did not establish criteria for granting continuation of the MHP pilot for currently participating utilities.As directed by D.14-03-021, the Commission’s Energy Division is tasked with reviewing the utilities’ ALs in consultation with the Safety Enforcement Division (SED) to verify that each utility’s advice letter complies with that decision. In consultation with SED staff, Energy Division has evaluated the MHP Pilot based on the following criteria:Compliance with D.14-03-021Benefits to the customersCost and efficiencyCoordination with the pending applications by SoCalGas and SDG&pliance with D.14-03-021The process by which the utilities may request continuation of the program was litigated in R.11-02-018 and specifically addressed in D.14-03-021. The decision was sent out for comments and was adopted in 2014. We agree with the IOUs argument that the advice letter process is the appropriate approval process to continue the MHP Pilot.OP 13 of D.14-03-021 directs the utilities to file a Tier 2 AL within 45 days of the second annual status report to request continuation of the conversion program if the actual experience warrants continuation without major modifications. In addition, the AL should specify the application period and the application process and should include a target for converting an additional number of spaces, either as a whole number or a percentage of the remaining spaces in the utility service territory potentially eligible for conversion. Collectively, the utilities have submitted ALs in compliance with OP 13 with the following justifications:? Improved safety and reliability with current safety and industrial standards (polyethylene natural gas piping and 100 amps electric service).? Customers, mobile home park owners as well as residents, have shown overwhelming support for the program.? All utilities have been supportive of the program.? Program helped identify new customers for CARE, FERA, and Medical Baseline Allowance Programs.The utilities are seeking continuation of the same program, without major modification, without significant cost changes per unit, and using existing and approved ratemaking treatment.Benefits to the CustomersD.14-03-021 stated that the criteria for conversion must focus on safety first and then, on reliability and capacity improvements. As stated in D.14-03-021, parties recognized that problems with the MHP master-meter/submeter distribution systems are not uncommon given the aging infrastructure, as confirmed by SED staff. In the course of the MHP pilot, PG&E reports that 2,690 gas leak surveys were conducted on individual spaces and 357 gas leaks have been found, primarily on customer-owned facilities.As a result of this program, existing master-meter systems have been abandoned, and gas systems have been being purged of gas by the utilities to assure their future safety. As determined in D.14-03-021, the Commission seeks to ensure safe and reliable service to all residential ratepayers in the service territories of Commission-regulated utilities, including those who reside in MHPs.Clearly, safety has improved through the installation of new, reliable, distribution systems, consisting of modern materials and construction methods. Going forward after the conversions, the distributions systems are now and will continue to be operated and maintained by the utilities indefinitely. In addition, the utilities will have primary responsibility for emergency response to the parks and their residents. In addition, customers at MHPs where conversions are completed, now have access to 100 amps of capacity, which replaced the maximum 30 or 50 amps previously available. The increased capacity provides immediate opportunity for residents to install air conditioning and/or heating which, until conversion under the program, was generally impossible.Therefore, the MHP Pilot improves safety and reliability while providing additional benefits to the customers.Cost and EfficiencyThe average To-the-Meter (TTM) and Beyond-the-Meter (BTM) cost per space reported by the utilities, except PG&E, align with the initial estimates by the utilities as stated in Table 4-1 in Appendix B of D.14-03-021. PG&E’s actual cost per space is more than 40% higher than SDG&E’s actual cost per space without explanation. Despite the fact that PG&E’s the cost per space is above its initial estimate, this should not be the primary factor to terminate the momentum of the conversion program; instead, PG&E’s excess costs should be addressed in PG&E’s application filing to continue the MHP program or in its GRC.Suspension and subsequent re-starting of the program would potentially add additional costs and will delay the conversion pace. Currently deployed trained and contracted resources would be redeployed to other projects and may not be readily available to the program if restarted at a later date. Coordination with the Formal Commission ProceedingThe Commission is considering the continuation of the MHP conversion program beyond 2019 for SoCalGas and SDG&E in A.17-05-007 and A.17-05-008. The issue of whether to make the pilot program permanent or to address various issues in the MHP conversion program for all the utilities should be considered through a formal Commission proceeding such as the applicationan Order Instituting Rulemaking (OIR) process. This resolution directs the utilities to each file an application to address this question. In order to minimize the program’s disruption and avoid an increase in re-start costs, the utilities should continue their current MHP Pilot until December 31, 2019 or the issuance of a Commission Decision on SoCalGas and SDG&E’s applications or other Commission Decision on the MHP Pilot as a whole, whichever is earlier. ConclusionThe utilities have complied with the D.14-03-021 and submitted ALs with justifications to continue the MHP Pilot. Continuation of the conversion program increases safety and provides benefits to customers.Therefore, Energy Division recommends the Commissionwe will continue extend the MHP Pilot. SED has been in constant consultation with the utilities throughout the implementation of the program and also recommends that utilities continue with completion of all remaining Category 1 MHP conversions (approximately 10% of the MHP spaces) and work on Category 2 and, if necessary, Category 3 MHPs until the earlier of a Commission Decision on Sempra Energy’s applications or December 31, 2019. However, the number of spaces converted in years 2018 and 2019 should not exceed the levels specified in the utility’s respective AL filing. A thorough evaluation of any expansion or modification of the program beyond the pilot set forth in D.14-03-021 should be determined through a formal proceeding. A utility should not begin construction of a utility upgrade project of a MHP if the projected completion schedule, barring any unknown conditions, before the start of the construction project indicates that this conversion project might not be able to complete by October 31, 2019. Nevertheless, any project, once initiated, commensurate to the guidance provided herein, must be completed unless a situation arises under which an MHP owner fails to comply with the conditions of its agreement(s) with the utility(ies) involved with the park’s MHP Pilot project. Each current participating utility, excluding SDG&E and SoCalGas, is required to submit an application to the Commission within 45 days of this Resolution with justifications to expand and/or modify the MHP Pilot beyond December 31, mentsPublic Utilities Code section 311(g)(1) provides that this resolution must be served on all parties and subject to at least 30 days public review and comment prior to a vote of the Commission. Section 311(g)(2) provides that this 30-day period may be reduced or waived upon the stipulation of all parties in the proceeding.The 30-day comment period for the draft of this resolution was neither waived nor reduced. Accordingly, this draft resolution was mailed to parties for comments on August 17, 2017. PG&E, SCE, SDG&E, Liberty Utilities, SoCalGas, Southwest Gas, TURN, and WMA filed comments on the Resolution. All comments were filed on September 18, 2017 except WMA. WMA filed its comment on September 11, 2017.PG&EPG&E states that it is not a proponent of expanding the MHP Pilot at this time. The actual costs to date have been higher than anticipated. However, it has a plan for a reduced, more cost-effective program for 2018-2019. It also may include additional SED-identified units to bridge thru 2018-2019. It advises the Commission to reject AL 3822-G-B/5033-E-B in OP #1 to continue the program and maintain the tariff sheets. The Commission agrees with the suggestion and it is implementedreflected in OP #1.SCEIt SCE recommends the Resolution to clarify Finding of Fact (FOF) 4 to indicate that Commission reasonableness review of costs occurs in the first General Rate Case (GRC) after service cut over to direct utility service is completed. SCE also requests Tthe Resolution should alsoto include a new OP to allow utilities to file a Tier 1 AL to amend their tariffs and reflect changes in this Resolution. The Commission agrees with these two suggestions and it ishas reflected these comments in implemented in FOF #4 and OP #9.SDG&E and SoCalGasSDG&E clarifies that as of 12/31/2016, it had scheduled 30 MHPs, instead of 150 MHPs. SDG&E and SoCalGas clarify that they will convert an additional 5% of MHP as a bridge until approval of their application to convert an additional 20% (over and above the initial 10%) of MHP thru 2023. They state that their memorandum accounts are Master Meter Balancing Accounts (MMBA) and are not Mobile Home Park Master Meter Balancing Accounts (MMMBA).We have adjusted Table 1 and 2 accordingly to reflect the previous three comments.SDG&E and SoCalGas advise the Commission to clarify that "completion" should refer to major construction of To-the-Meter work, but should not include Beyond-the-Meter work and other more moderate tasks, such as setting new meters, purging and disconnecting the legacy system, master meter removal, and closeout of activities. The Commission believes that project “completion” should not be limited to major construction “To-the-Meter”, but also should include projects “Beyond-the-Meter”. Therefore, we reject this proposed definition. Again, a utility should not begin construction of a utility upgrade project of a MHP if, at the start of the construction project, facts indicates that this conversion project, both for “To-the-Meter” and “Beyond-the-Meter”, would not be completed by October 31, 2019. Finally Tthey also recommend recommend the Resolution to clarify Finding of Fact (FOF) 4 to indicate that Commission reasonableness review of costs occurs in the first General Rate Case (GRC) after service cut over to direct utility service is completed. We agree with this suggestion and have reflected this in FOF 4.The Commission believes that project “completion” should not be limited to major construction “To-the-Meter”, but also should include projects “Beyond-the-Meter”. Therefore, we reject this proposed definition. Again, a utility should not begin construction of a utility upgrade project of a MHP if, at the start of the construction project, facts indicates that this conversion project, both for “To-the-Meter” and “Beyond-the-Meter”, would not be completed by October 31, 2019. Southwest GasIt recommends the Resolution to clarify Finding of Fact (FOF) 4 to indicate that Commission reasonableness review of costs occurs in the first General Rate Case (GRC) after service cut over to direct utility service is completed. The Commission agrees with the suggestion and it is reflected in FOF 4.TURNIt states that costs incurred by the utilities to continue the MHP Pilot Program should be subject to reasonableness review. There should be a cap on the number of spaces beyond the 10% and this cap should be no more than the 2-year prorated number of spaces. TURN estimates that the cost of the extension could reach $685 million if there is no cap on the number of spaces, $190.3 million if the Commission approves the number of spaces in the ALs and PG&E’s second supplemental AL, and $357.9 million based on the PG&E original AL.TURN also recommends the Commission to include guidance on the content of utility applications to get consistent information from the utilities for proper program evaluation. Each application should include forecasted expansion costs and the Commission should use forecasted costs as the basis for approving future expansion. The applications should justify pacing of converting Category 2 and 3 MHPs, and include a ratepayer impact analysis of the additional MHP conversions based on the pace of conversion and their impact on CARE customers. Hence, the Commission may examine the policy of continue paying for Beyond-the-Meter costs, especially for Category 2 & 3 MHPs.Lastly, MHP applications from the utilities should be given priority treatment to evaluate the program by the Commission.The Commission agrees that the costs incurred by the utilities to continue the MHP Pilot Program should be subject to reasonableness review and this is addressed in FOF 4. However, the cap on spaces and suggested guidance to utility applications could is out of scope for this Resolution and can be better addressed in an OIR or other formal proceeding..WMAWMA indicates that there is still a need for MHP distribution system upgrades and for the MHP upgrade program to continue. They state Tthis program permits the Commission's solar, time-of-use, and other energy initiatives to be available to MHP residents. The Commission recognizes the importance of continuing the pilot program and the benefits to the MHP residents.FindingsD.14-03-021 approved a three-year pilot program (January 1, 2015 to December 31, 2017) to incentivize the utilities to convert 10% of the MHP residential spaces from a privately owned submeter system to direct utility service in each utility’s service territory.Utility conversion involves both electric and gas services.Conversion included service “to-the-meter” and “beyond-the-meter” of the distribution system.The utilities were authorized to record actual program costs in a balancing account, and recover both “to-the-meter” and “beyond-the-meter” in General Rate Cases (GRCs).prudently incurred costs in the first year following cut over of service. Review for reasonableness of “To-the-Meter” costs will occur in the GRC where those costs are put into rate base. Review for reasonableness of “Beyond-the-Meter” costs will occur in the first GRC case after system cut over to direct utility service is completed.D.14-03-021 OP 13 indicates that any utility may file a Tier-2 AL within 45 days of the second annual status report to request continuation of the conversion program if the actual experience to that point appears to warrant continuation of the program without major modification.PG&E, SCE, SDG&E, CalPeco Electric, SoCalGas, and Southwest Gas timely filed ALs to request continuation and expansion of the conversion program.SDG&E and SoCalGas have filed applications to expand the MHP Pilot to include an additional twenty percent of spaces within SDG&E and SoCalGas’ territories (Application 17-05-008 and Application 17-05-007, respectively). PG&E AL 3822-G-A/5033-E-A, SCE AL 3576-E, SDG&E AL 3057-E/2563-G, CalPeco Electric AL 76-E, SoCalGas AL 5106-G, and Southwest Gas AL 1035-G were protested. The Utility Reform Network (TURN) filed a protest on April 21, 2017 to ALs from PG&E, SDG&E, SoCal Gas, and Southwest Gas. TURN filed an amended protest on June 21, 2017 to all IOUs. PG&E filed a second Supplement filing on August 10, 2017 removing its request to continue the MHP Pilot beyond 2018. PG&E states in its August 10, 2017 filing that TURN supports completion of the MPH pilot into 2018.TURN’s initial protests recommended the Commission to reject the ALs and direct the IOUs to refile the ALs with additional information.TURN’s amended protests recommended the Commission to reject the ALs with prejudice and require the IOUs to submit formal applications.TURN did not protest the utilities’ requests to continue the existing pilot program through 2018 to complete the 10% goal of the program.WMA, City of Chula Vista, and the City of Vista each submitted a letter to the Commission supporting the MHP ALs.PG&E, SCE, SDG&E, Liberty Utilities, SoCalGas, Southwest Gas, TURN, and WMA filed comments on the Resolution. All comments were filed on September 18, 2017 except WMA. WMA filed its comment on September 11, 2017.Energy Division recommends the Commission continuationContinuation of the MHP Pilot. improves safety and reliability while providing additional benefits to customers.Utilities should complete all Category 1 MHP conversions (approximately 10% of the MHP spaces) and work on Category 2 and 3 MHPs until the earlier of a Commission Decision on SoCalGas and SDG&E’s applications or December 31, 2019. The number of spaces converted in years 2018 and 2019 cannot exceed the levels specified in the utility’s respective AL filing. However, a utility should not begin construction of a utility upgrade project of a MHP if any facts appear before the start of the construction project indicate that this conversion project might not be able to complete by October 31, 2019. Commensurate to the guidance provided, once construction has begun, the initiated project must be completed unless a situation arises under which an MHP owner fails to comply with the conditions of its agreement(s) with the utility(ies) involved with the park’s MHP Pilot project.Each current participating utility, other than SDG&E and SoCalGas, is required to submit an application to the Commission within 45 days of this Resolution with justifications to expand the MHP Pilot beyond the 10% requirement. Therefore it is ordered that:The request of Pacific Gas and Electric Company for continuation of the Mobile Home Park Utility Upgrade Program as requested in Advice Letters 3822-G/5033-E and 3822-G-A/5033-E-A are approved, and 3822-G/5033-E, 3822-G-A/5033-E-A, and 3822-G-B/5033-E-B are approvedis rejected.The request of Southern California Edison Company for continuation of the Mobile Home Park Utility Upgrade Program as requested in Advice Letter 3576-E is approved.The request of San Diego Gas & Electric Company for continuation of the Mobile Home Park Utility Upgrade Program as requested in Advice Letter 3057-E/2563-G is approved. The request of Liberty Utilities (CalPeco Electric) for continuation of the Mobile Home Park Utility Upgrade Program as requested in Advice Letter 76-E is approved. The request of Southern California Gas Company for continuation of the Mobile Home Park Utility Upgrade Program as requested in Advice Letter 5106-G is approved. The request of Southwest Gas Corporation for continuation of the Mobile Home Park Utility Upgrade Program as requested in Advice Letter 1035-G is approved. The utilities, listed in Ordering Paragraphs 1-6 above, shall continue the Mobile Home Park (MHP) Utility Upgrade Pilot Program and complete all Category 1 MHP conversions as established in Decision 14-03-021 (approximately 10% of the MHP spaces) and work on Category 2 and 3 MHPs until the earlier date of December 31, 2019 or the issuance of a Commission Decision for the continuation, expansion or modification of the program. The number of spaces converted in years 2018 and 2019 cannot exceed the levels specified in the utility’s respective advice letter filing. However, a utility shall not begin construction of a utility upgrade project of a MHP if, at the start of the construction project, facts indicate that this conversion project would not be completed by October 31, 2019. Any project, once initiated commensurate to the guidance provided herein, must be completed unless a situation arises under which an MHP owner fails to comply with the conditions of its agreement(s) with the utility(ies) involved with the park’s MHP Pilot project.Within 7 days of the issuance of this Resolution, the participating utilities may file a Tier 1 Advice Letter including the necessary tariff revisions to reflect the changes ordered in this Resolution.Within 45 days of this resolution, each current participating utility, excluding San Diego Gas & Electric and Southern California Gas Company, is required to submit an application to the Commission with justifications to expand and/or modify the Mobile Home Park Pilot beyond December 31, 2019.This Resolution is effective today.I certify that the foregoing resolution was duly introduced, passed and adopted at a conference of the Public Utilities Commission of the State of California held on September 28, 2017; the following Commissioners voting favorably thereon:_____________________TIMOTHY J. SULLIVANExecutive Director ................
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