April 6, Your courtesy in this matter is appreciated. Very truly yours, James M. Lehrer

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1 James M. Lehrer Senior Attorney April 6, 2005 Docket Clerk California Public Utilities Commission 505 Van Ness Avenue San Francisco, California RE: APPLICATION NO Dear Docket Clerk: Enclosed for filing with the Commission are the original and five copies of the SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E RESPONSE TO MOTION OF THE WEST MANUFACTURED HOUSING COMMUNITY ASSOCIATION TO ADD ISSUES FOR CONSIDERATION in the above-referenced proceeding. We request that a copy of this document be file-stamped and returned for our records. A self-addressed, stamped envelope is enclosed for your convenience. Your courtesy in this matter is appreciated. Very truly yours, James M. Lehrer JML:aa:LW doc Enclosures cc: All Parties of Record (U 338-E P.O. Box Walnut Grove Ave. Rosemead, California ( Fax (

2 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E for Authority to, Among Other Things, Increase Its Authorized Revenues For Electric Service in 2006, And to Reflect That Increase In Rates. Application No SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E RESPONSE TO WESTERN MANUFACTURED HOUSING COMMUNITY ASSOCIATION S MOTION TO ADD ISSUES FOR CONSIDERATION JAMES M. LEHRER FRANK A. MCNULTY GLORIA M. ING CAROL A. SCHMID-FRAZEE DAVID R. GARCIA Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: ( Facsimile: ( James.Lehrer@sce.com Dated: April 6, 2005

3 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E for Authority to, Among Other Things, Increase Its Authorized Revenues For Electric Service in 2006, And to Reflect That Increase In Rates. Application No SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E RESPONSE TO WESTERN MANUFACTURED HOUSING COMMUNITY ASSOCIATION S MOTION TO ADD ISSUES FOR CONSIDERATION Pursuant to Rule 45(f of the Rules of Practice and Procedure of the California Public Utilities Commission ( Commission, Southern California Edison Company ( SCE or the Company submits this response to the Western Manufactured Housing Community Association s ( WMA Motion to Add Issues for Consideration ( Motion in this General Rate Case ( GRC. For the reasons discussed below, WMA s Motion should be denied. and WMA proposes that two issues be found to be within the scope of this proceeding: (1 Are there fair and reasonable ways to mitigate the cost to MHP [Mobile Home Park] owners of converting existing submetered systems to directly metered service? (2 SCE should provide an analysis of the costs, benefits and feasibility of providing bill calculation services to MHP owners, provide examples of the appropriate tariff language and an estimate of the rates necessary to recover the full costs of such service from MHP owners. 1 1 Motion, p

4 WMA asserts that these issues should be addressed in Phase 1 the revenue requirements phase of this GRC. 2 Both the first issue (transfer of submetered electric systems to utilities the socalled conversion issue and the second issue (utilities providing meter reading and billing services for owners of submetered mobile home parks were raised in R , the Commission s rulemaking re-examining the submetering discount for mobile home parks. In its Motion, WMA states that in a decision in that rulemaking, the Commission directed that these issues be considered on a case-by-case basis outside the OIR, and on that basis WMA asserts that it now seeks to properly include them in this [GRC]. 3 These two issues are not properly includable in either phase of this GRC. I. WMA S MOTION IS UNTIMELY -- GRANTING IT WOULD SIGNIFICANTLY AND PREJUDICIALLY EXPAND THE ADOPTED SCOPE AND SCHEDULE WMA could have signaled an interest in having these issues heard in this GRC by timely filing a protest to SCE s GRC Application. It did not. WMA could have brought its proposal up prior to, or during, the February 18, 2005 prehearing conference. It did not. Nor did it comment on, or object to, the schedule jointly proposed by SCE, the Office of Ratepayer Advocates ( ORA, The Utility Reform Network ( TURN and Aglet Consumer Alliance ( Aglet, which was adopted in the Scoping Memo issued on March 15, That schedule, which allows for 30 days of Phase 1 evidentiary hearings (9 fewer days than occurred in SCE s 2003 GRC, will require discipline on the part of all active parties. The issues WMA proposes to include in Phase 1 are complex and likely to be contentious. Substantial time will be required to draft prepared testimony, and there would be an impact on the hearing schedule, as well. 2 Id., p D , cited by WMA, see, Motion, p

5 II. THE CONVERSION ISSUE (TRANSFERS OF SUBMETERED ELECTRIC SYSTEMS TO UTILITIES SHOULD NOT BE ADDED TO EITHER PHASE OF THIS GRC About one month ago, WMA filed a virtually identical motion to add the same two issues in Phase 2 of Pacific Gas & Electric Company s ( PG&E GRC. 4 Administrative Law Judge ( ALJ Burton Mattson -- in that GRC -- noted that when the conversion issue was raised in the earlier rulemaking, the Commission declined to address it and stated it would consider a new proceeding to address this issue only as staffing and resources allow. 5 He ruled that WMA had failed to make a convincing showing that staffing and resources would allow consideration of the conversion issue in Phase 2 of PG&E s GRC. He further ruled that there are sufficient factual, policy and legal matters involving revenue requirements, and other topics unrelated to those in this case, to make this issue more appropriate for the revenue requirement phase of a GRC. 6 However, in reaching that conclusion, ALJ Mattson found that: [o]verall, the conversion issue involves complex factual, policy and legal matters. It may involve specific facts, or the policy of how to treat these items for public policy purposes in compliance with Pub. Util. Code For example, it may involve facts or policy related to: the conversion cost of facilities based on depreciated or appraised value; how discounts already paid and received may or may not have been used (i.e., toward capital costs or operation and maintenance expenses; the difference, if any, between the discount paid by PG&E based on averages and actual costs incurred by MHP owners; how much, if any, of the capital costs and/or operation and maintenance expenses have been paid by rent; how to ensure that MHP owners are not paid for the system both through discount and rents and then again through a conversion payment; and whether or not the submetering facilities are now in need of repairs, replacements or upgrading before transfer. If in need of repairs, replacements or upgrades, it may 4 Motion of The Western Manufactured Housing Communities Association To Add Issues, filed February 15, 2005 in A The wording in WMA s motion in the PG&E GRC is essentially identical to the wording of its instant Motion. 5 D , mimeo., p. 23, quoted in Administrative Law Judge s Ruling On WMA s Motion To Add Two Issues, dated February 28, 2005 ( February 28, 2005 ALJ Ruling, p February 28, 2005 ALJ Ruling, p

6 then be necessary to consider whether or not some or all of the necessary funds have already been paid to the MHP owner by the submetering customers in the form of periodic rental payments, or funds made available by PG&E via some portion of the periodic discount. If some or all of these funds have been paid or made available, there may or may not be a net escrow balance payable to PG&E upon the transfer. 7 WMA asserts that by making this issue part of this proceeding, the issue becomes more manageable and involves much of the same cost information already presented by SCE herein. 8 The same assertion appears verbatim in WMA s motion in PG&E s GRC. There, ALJ Mattson found that WMA s assertion of increased manageability is not convincing. For the reasons discussed the matter is complex and requires Commission staffing and resources that the Commission has not yet found to be available. 9 SCE fully concurs with this finding, and there is every reason to believe that the same questions identified by ALJ Mattson in his ruling in PG&E s case would be present if the conversion issue is added to the scope of SCE s GRC. ALJ Mattson s finding of unavailable Commission resources was made only a month ago, and it is unlikely that that problem has abated in so short a time. Certainly, WMA has not made any showing to the contrary. More to the point, it is simply too late for SCE, ORA and the other parties to analyze the factual, policy and legal questions, and to draft testimony to address those questions in this GRC. SCE s direct showing has already been filed in accordance with the Rate Case Plan. ORA s direct showing is scheduled to be served April 15, less than two weeks away. Intervenors direct showings are due less than a month after that, on May 6. ORA and intervenors have been engaged in discovery for weeks, and their resources are deployed to meet the aggressive testimony submission dates established by Assigned Commissioner Brown in this GRC. That schedule provides for this GRC to be processed in time for an expected decision date of January 7 Id., p Motion, p February 28, 2005, ALJ Ruling, p

7 9, 2006, which the Scoping Memo notes is consistent with the Rate Case Plan. 10 Adding the conversion issue -- with all the complexities identified by ALJ Mattson -- would require a significant lengthening of the schedule, would make compliance with the Rate Case Plan impossible, and would prejudice SCE and the other parties whose direct showings are either complete or in the process of being drafted and finalized. The conversion issue raises matters that have already been found to be inappropriate for consideration in Phase 2 of the GRC, and it is too late for parties to address this issue in Phase 1 of this proceeding. There are two practical alternatives: the conversion issue could be timely raised and addressed in Phase 1 of SCE s test year 2009 GRC, or it could be the subject of a new rulemaking. As PG&E observed: Furthermore, resolution of such conversion issues would appear to similarly affect multiple utilities statewide. Thus the Commission would need to decide whether consistency concerns might still make it desirable to address such additional submetering issues in a single, statewide OIR, as opposed to utility-specific proceedings. 11 SCE agrees that a generic rulemaking would make more sense, particularly in light of the overarching statutory framework governing such submetered systems. 12 Consistency and compliance with legislative mandates is obviously desirable, and regulatory and administrative efficiency would be better served (and the impact on limited Commission resources would be less if the conversion issue is addressed once, rather than several times over a period of years. 13 Accordingly, WMA s proposal to add the conversion issue to Phase 1 of this GRC should be denied. 10 Scoping Memo, p Response of Pacific Gas and Electric Company to Motion of The Western Manufactured Housing Communities Association To Add Issues, filed February 17, 2005 in A , p Pub. Util. Code In order to address the revenue requirement impacts associated with conversion of submetered facilities, the Commission could direct the respondent utilities to file applications which could be consolidated with the rulemaking. The resulting revenue requirement changes could then be accomplished in the utilities respective subsequent GRCs or other rate-change mechanisms

8 III. THE ISSUE OF UTILITIES PROVIDING METER READING AND BILLING SERVICES FOR MOBILE HOME PARK OWNERS SHOULD NOT BE ADDRESSED IN EITHER PHASE OF THIS GRC A. It Is Too Late To Address The Meter Reading And Billing Services Issue In Phase 1 Of This GRC WMA asserts that the meter reading and billing services issue is clearly something that should be addressed in this proceeding. 14 Citing one of the decisions in the earlier rulemaking, WMA notes that the Commission ordered the utilities, in their next revenue requirement proceeding, to provide an analysis of the costs, benefits and feasibility of providing bill calculation services and to provide examples of the appropriate tariff language and an estimate of the rates necessary to recover the full costs of the service from the community owners. 15 WMA asserts that although this issue would [n]ormally be considered in Phase II of a GRC, ALJ Mattson s second-look finding 16 suggests that Phase 1 of a GRC may be the proper location to address these additional issues. 17 Although the Commission did indicate in D that the meter reading and billing services issue should be addressed in each utility s next revenue requirement proceeding, that decision was not mailed until November 24, 2004, several months after SCE s Notice of Intent ( NOI was tendered and barely one month before SCE filed its 2006 GRC Application. As 14 Motion, p Id., citing D , mimeo., at pp ALJ Mattson initially found that the meter reading and billing services issue should be addressed in Phase 2 of PG&E s GRC. See, February 28 ALJ Ruling, pp PG&E asked for that ruling to be reconsidered, and in a second look ruling ALJ Mattson found that the proposed new service will involve a change in PG&E s revenue requirement, and removed the issue from the Scope of Phase 2 of PG&E s GRC. See, Administrative Law Judge s Ruling on PG&E s Motion for Expedited Reconsideration Regarding Addition of Issue 3.17 (Billing Issue, issued March 10, 2005 in A ( March 10 ALJ Ruling, pp Motion, p

9 was the case with the conversion issue, ALJ Mattson expressed concern about the complex questions associated with the meter reading and billing services issue: Bill calculation and printing (if offered will be a new service outside of PG&E s normal billing practice. The processes and procedures for this new service must be developed, including protocols for data transfer. Related issues may need to be identified and addressed (e.g., treatment of common area use at the MHP Moreover, on further consideration, it becomes apparent that many variables will likely drive the costs, benefits and feasibility of this service. Costs and benefits, for example, will probably depend upon economies of scale, and this will be a function of the number of MHP owners who utilize this service. As a result, this could be a relatively complex analysis Because more complex issues are involved than initially thought, it is reasonable to conclude that more than three weeks are required to complete an acceptable analysis. 18 Again, SCE concurs in ALJ Mattson s findings, with the caveat that the necessary analysis and drafting to produce a proper showing would probably take considerably longer than three weeks. In any event, these same questions are likely to apply to consideration of the meter reading and billing services issue vis-à-vis SCE. Given the short time between the mailing of D and the filing of SCE s GRC application, and recognizing the intense activity involved in finalizing that application with all of its many subject areas and witnesses it simply was not feasible for SCE to develop a complete showing, at the last minute, on the second issue WMA seeks to now add. Moreover, if SCE had attempted to develop a showing for addition to its application, it would have had to obtain ORA s concurrence as required by the Rate Case Plan. 19 And, as noted above with regard to the conversion issue, both ORA and intervenors are already at work on their respective showings, in accordance with the scope and schedule established for this GRC. 18 March 10 ALJ Ruling, pp. 2-3 (emphasis added. 19 The Rate Case Plan requires that ORA s project manager concur in changes in the utility s showing between the NOI and the application. D , mimeo., Appendix B, p. 17D

10 B. The Meter Reading And Billing Services Issue Has A Significant Impact On Revenue Requirements And Is, Therefore, Not Appropriately Addressed In Phase 2 Of This GRC As WMA acknowledges, 20 ALJ Mattson found that the second proposed issue would involve a revenue requirement change. Accordingly, it is not an appropriate issue for Phase 2 the rate design, marginal cost and revenue allocation phase of SCE s GRC. Again, the practical alternatives are to address the meter reading and billing services issue in SCE s test year 2009 GRC, or in a generic rulemaking, with appropriate provisions made for revenue requirement changes resulting from any order establishing such new services. IV. CONCLUSION For the reasons set forth above, WMA s motion to expand the scope of Phase 1 of this GRC to include the conversion, and the meter reading and billing services, issues, should be denied, and those issues should not be deferred to Phase 2 of this GRC. Respectfully submitted, JAMES M. LEHRER FRANK A. MCNULTY GLORIA M. ING CAROL A. SCHMID-FRAZEE DAVID R. GARCIA By: James M. Lehrer Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 20 See, Motion, p

11 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: ( Facsimile: ( April 6,

12 CERTIFICATE OF SERVICE I hereby certify that, pursuant to the Commission s Rules of Practice and Procedure, I have this day served a true copy of SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E RESPONSE TO WESTERN MANUFACTURED HOUSING COMMUNITY ASSOCIATION S MOTION TO ADD ISSUES FOR CONSIDERATION on all parties identified on the attached service list(s. Service was effected by one or more means indicated below: Transmitting the copies via to all parties who have provided an address. First class mail will be used if electronic service cannot be effectuated. Placing the copies in sealed envelopes and causing such envelopes to be delivered by hand or by overnight courier to the offices of the Commission or other addressee(s. Placing copies in properly addressed sealed envelopes and depositing such copies in the United States mail with first-class postage prepaid to all parties. Directing Prographics to place the copies in properly addressed sealed envelopes and to deposit such envelopes in the United States mail with first-class postage prepaid to all parties. Executed this 6th day of April, 2005, at Rosemead, California. Project Analyst Linda Morales SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770