Which Of The Following Is Not A Service Provided By Municipal Utility Districts?

5. Footing of CPUC Jurisdiction

Where a MHP or a multi-unit apartment obtains h2o or sewer service from a Commission-regulated public utility, and then separately bills for that service, many consumers and some of the parties to this proceeding presume the Commission has jurisdictional oversight of that activity, without limitation. Many consumers, as well as some parties, also assume CPUC jurisdiction where the h2o provider to the MHP or multi-unit apartment is part of that not-jurisdictional group that supplies lxxx% of California's potable h2o. They reason, under both scenarios, that in reselling the utility service to an end use consumer, the MHP or multi-unit apartment possessor/operator is performing a public utility role as a de facto public utility. As explained more fully below, many of these assumptions are not supported past our analysis of applicable law. Instead, CPUC jurisdiction over landlord-tenant disputes regarding water and sewer billing practices is quite limited.

To provide a context for our discussion of the positions of the parties on the awarding of CPUC jurisdiction, in the next two subsections we place the relevant statutes and court interpretations of public utilities law that together comprise the controlling police on CPUC jurisdiction. After in this conclusion we examine the awarding of these laws to submetered water service at MHPs, water allocation methodologies at non-submetered multi-unit of measurement apartments, and to sewer service charges at both.

5.1. The Statutes - CPUC Jurisdiction

The CPUC's power to regulate h2o and sewer corporations as public utilities relies on legislative grants, pursuant to sections 3 and v of Article XII of the California Constitution, which expand upon direct constitutional grants conferred by other provisions of Commodity XII.^x

Section 216 of the Public Utilities Code is the general definitional statute that describes categories of pubic utilities. With respect to water, it provides, in relevant part:

(a) "Public utility" includes every ...water corporation ... where the service is performed for, or the commodity is delivered to, the public or whatsoever portion thereof.

(b) Whenever any ... water corporation ... performs a service for, or delivers a article to, the public or any portion thereof for which whatever compensation or payment whatsoever is received, that ... water corporation ... is a public utility subject to the jurisdiction, control, and regulation of the commission and the provisions of this part. (§ 216, emphasis added.)

Pursuant to § 241, h2o corporation ways "every corporation or person owning, controlling, operating, or managing any h2o arrangement for compensation" within California. Section 204 defines corporation as "a corporation, a company, an clan, and a joint stock clan" but, notably, does not include a municipal corporation.

Section § 2701 contains the most detailed definition of a CPUC-regulated h2o utility:

Any person, firm, or corporation ... owning, controlling, operating, or managing any h2o system within this State, who sells, leases, rents, or delivers h2o to whatsoever person, firm, corporation, municipality, or any other political subdivision of the State, whether nether contract or otherwise, is a public utility, and is subject to the provisions of Office i of Division 1 and to the jurisdiction, command, and regulation of the committee, except as otherwise provided in this chapter. (§ 2701, emphasis added.)

A statutory exception to CPUC jurisdiction, suggested in §2701 above, that is directly applicable to MHPs and multi-unit apartments is § 2705.5, which provides in relevant part:

Any person or corporation ... that maintains a mobilehome park or a multiple unit residential complex and provides ... water service to users through a submeter service arrangement is not a public utility and is not subject to the jurisdiction, control, or regulation of the commission if each user of the submeter service arrangement is charged at the rate which would be applicable if the user were receiving the water directly from the h2o corporation. (§ 2705.5, emphasis added.)

As such, § 2705.5 provides a "safe harbor" from public utility condition and attendant regulation by the CPUC to qualifying MHPs and multi-unit apartments.¹¹ Legislative history, cited by GSMOL, shows that § 2705.five was enacted in 1983 in response to questions near whether MHPs that were submetering water to their tenants could practise and so without obtaining a CPCN and submitting to regulation by the CPUC as public utilities. (See GSMOL initial cursory, Ex. B-D.) Equally enacted, the statute codified an exemption or safety harbor - in other words, nonpublic utility status -- for MHPs that charged the aforementioned rate as the user would receive from the "serving public utility h2o company." (Stats. 1983, ch. 339.) On the advice of Legislative Counsel in the 24^th Report on Legislation Necessary to Maintain the Codes (March ane, 1984), the term "water company" was deleted and replaced by the term "water corporation," which appears in the current statute. (Stats. 1984, ch 144, sec. 169.)¹²

Department 2705.6 addresses the practices of MHPs that ain the h2o supplies and facilities used to serve their tenants. Although it provides such MHPs with an exemption from public utility status, information technology authorizes the Commission to exercise jurisdiction over the MHP'southward water rates and services "if a tenant complains." Section 2705.6 provides in relevant office:

A mobilehome park that provides water service just to its tenants from h2o supplies and facilities that information technology owns, not otherwise dedicated to public service, is non a water corporation. However, that mobilehome park is subject to the jurisdiction of the commission to the extent that, if a tenant complains almost the h2o rates charged or service provided by the mobilehome park, the commission shall decide, based on all the facts and circumstances, whether the rates charged are just and reasonable and whether the service provided is adequate. (§ 2705.6)

Questions about the charges and services provided by an MHP that owns its h2o supplies and facilities were not raised in this proceeding.¹³ Although nosotros have no statistics on MHPs that ain their water sources, we suspect that they are few in number.

5.2. Example Law - CPUC Jurisdiction

When considering the Commission's jurisdiction over the charges of MHPs or multi-unit apartments for water and sewer service, one cannot rely solely on the words of the controlling statutes. The following two subsections on dedication of property to public use and on municipal utilities demonstrate how the courts take clarified, and in some instances, expressed the implicit limitations in the Commission's governing authority.

5.2.i. No Public Utility Condition Without Dedication of Holding to Public Utilise

Were we to construe Public Utilities Lawmaking § 216, § 241, and § 2701 in isolation, the narrow language of these statutes would appear to confer broad Commission jurisdiction over the delivery of water past landlords to tenants for compensation. Still, in 1912, the California Supreme Court enunciated a requirement of common police force, not limited in these statutes today or equally previously codified, that conditions public utility status on the dedication of utility property to the public use. (See Thayer 5 California Development Co. (1912) 164 Cal. 117.) The Court later explained that the human action of dedication occurs if an entity:

held himself out, expressly or impliedly, equally engaged in the business concern of supplying [a service or commodity] to the public as a form, non necessarily to all of the public, just to whatever limited portion of information technology, such portion, for case, as could exist served by his own system, every bit counterdistinguished from his holding himself out as serving or ready to serve only particular individuals, either as a thing of accommodation or for other reasons peculiar and particular to them. (Van Hoosear 5 Railroad Commission (1920) 184 Cal. 553, 554.).

By 1960, in Richfield Oil Corp. five Public Utilities Commission, the Court expressed doubts near the applicability of the dedication doctrine to modern public utility status. However, the Courtroom left the doctrine intact. The Court concluded that "the Legislature by its repeated reenactment of the definitions of the public utilities without change has accepted and adopted dedication as an implicit limitation on their terms." (Richfield Oil Corp (1960) 54 Cal.2nd 419, 430.)

Whether or non dedication has occurred is a factual question. (Haynes v. MacFarlane (1929) 207 Cal. 529, 532.) Where dedication has occurred, information technology may exist either limited or implied and in the latter case, "it may be inferred from the acts of the owner and his dealings and relations to the belongings." (Cal. Water & Tel. Co. v. Public Util. Com. (1959) 51 Cal.2d 476, 494; see also Yucaipa Water Co. No. one 5. Public Utilities Com. (1960) 54 Cal.second 823.) The California Supreme Court's 1921 determination in Story v. Richardson remains the preeminent authority on awarding of the dedication requirement in the context of a landlord-tenant relationship. (Story v. Richardson (1921) 186 Cal. 162.) In that case, the Supreme Court held that an office edifice owner was not acting as a public utility though he maintained boilers, pumping engines, hot water heaters, and other equipment in the office building basement for the purpose of supplying tenants with light, heat, and hot water service. (Id. at 166.) The possessor was "not engaged in the sale and distribution of electricity to the public at big or whatever portions thereof" the Supreme Court said, emphasizing that the equipment inside the edifice was designed "primarily and pre-eminently for supplying service to the tenants of the edifice" and that the owner used his holding "solely in a private enterprise." (Id. at 166, 167, 168.)¹⁴

Over the years equally the Commission examined the issue of unsaid dedication in the landlord-tenant setting, it has scrupulously followed the Supreme Courtroom's Story v. Richardson conclusion. In Barnes 5. Skinner, the Commission held that owners of a tract of land containing rental homes had non dedicated their facilities to public use past providing h2o and sewage services, for a fee, only to their tenants. (D. 85492 slip op. at 8-nine; (1976) 79 CPUC 503.) Soon thereafter, in a commercial context, the Commission held that owners of a regional shopping center who resold electricity to their tenants had non defended their property to public use. (Bressler v. Bayshore Properties, Inc. (1977) 81 CPUC 746, 748.) Later (and prior to the enactment of § 2705.half-dozen which creates a statutory exemption), the Commission held that owners of a MHP who used a well that they owned to provide water to park tenants had non dedicated their facilities to public utilize. (Fowler v. Guenther (1988) 27 CPUC 2d 591, 594.) The Committee declined to address "whether the existence of a landlord-tenant relationship will exist sufficient in all situations to foreclose the Commission from asserting jurisdiction." (Id. at 595.) Nigh recently, the Committee ended that information technology had non erred in declining to assert jurisdiction over commercial building owners who had installed sure telecommunications facilities for utilise past their tenants. (OIR into Competition for Local Exchange, D.00-03-055, slip op. at 11 [modifying D.98-10-058 and denying rehearing].)

While information technology is non the task of this proceeding to definitely determine, based on the unique facts of water or sewer service at whatsoever given MHP or multi-unit apartment, whether that service is legal, 1 guideline is clear: existing statutes which define public water and sewer utilities must be interpreted in light of the common constabulary doctrine of dedication.

As determined in the Commission determination on the Awarding of MHC, discussed in department 4.1, limited dedication of property to public utilise meets the dedication requirement for public utility condition. In this proceeding, with the unmarried exception of MHC, no MHP or multi-unit apartment possessor (or owner's representative) has expressly defended h2o or sewer facilities to public service. In fact, the apartment lobby and others vigorously argue that the dedication requirement cannot be implied or inferred from the landlord'due south simple acts of providing tenants with h2o and sewer service, and afterward billing for those services. Therefore, they argue they are not public utilities and cannot exist subjected to CPUC jurisdiction.

v.ii.2. Municipal Utilities Are Non Public Utilities Subject To CPUC Jurisdiction

In his jurisdictional assay of public utility police force, Witkin succinctly opines: "[t]he Commission'due south jurisdiction extends only to regulation of privately owned utilities; in the absence of express statutory provision, it has no jurisdiction over municipally owned utilities." (Witkin, 8 Summary of California Police force, ix^th Edition, Constitutional Law § 892, p. 436, emphasis in original.)

In a case brought by Inyo County (Inyo), the California Supreme Court held that absent an authorizing statute, the CPUC lacked jurisdiction to regulate the rates the Los Angeles Section of Water and Power (LADWP), a municipally endemic public utility, charged for water service outside the corporate border in Inyo. Inyo had argued that, in making sales outside its municipal border, LADWP was acting as a private corporation and therefore, the rates established for Inyo residents were subject field to CPUC jurisdiction and command. The Supreme Court noted that § 10005 expressly permits a municipal corporation to sell exterior the corporate limits, and no statute grants the CPUC authority to regulate the rates for such sales. (County of Inyo v. Pub. Util Comm., (1980) 26 Cal.3d 154, 166 [Inyo Canton].) The Supreme Courtroom opined, notwithstanding:

Possible legislation conferring PUC jurisdiction over municipally owned water corporations, selling across municipal borders or even within such borders, would fall conspicuously within the scope of present commodity XII, section 5. (Id. at 164, emphasis added.)

The Legislature has not conferred upon the Commission authorization over municipal utility water or sewer sales; neither has is it conferred such authorization over sales by municipal utility districts or public utility districts.^fifteen Since municipal entities are not Commission-regulated public utilities, one must consider whether MHPs or multi-unit apartments that do not dedicate their facilities to public employ but do resell the h2o or sewer services provided to them by a municipal utility can exist public utilities subject to CPUC jurisdiction. The Committee has non previously considered this question.

¹⁰ Department 3 provides, in relevant part:

"Private corporations and persons that own operate, command or manage a ... organisation for ... furnishing h2o ... to or for the public ... are public utilities subject to the command past the Legislature. The Legislature may prescribe that additional classes of individual corporations or other person are public utilities." (Cal. Const., art. XII, § 3, emphasis added.)

Section 5 provides, in relevant function:

"The Legislature has plenary power, unlimited by the other provisions of this constitution but consistent with this article, to confer additional authorization and jurisdiction upon the commission ..." (Cal. Const., art. XII, § 5.)

¹¹ The Lawmaking enumerates other exemptions. For example, statutory exceptions from regulation by the CPUC equally a public utility utilize to: sure surplus and emergency sales from private water supplies non otherwise dedicated to public employ that the possessor primarily uses for individual domestic, industrial and irrigation purposes (§ 2704); mutual water companies that provide water but to their stockholders at price (§ 2705; see also §§ 2725-2729); entities that supply h2o exclusively to a water conservation district (§ 2706). ¹² The Legislative Counsel's report states that all recommendations are nonsubstantive changes, and with respect to § 2705.5, points out that "water corporation" is the term used in § 241. (March 1, 1984 Leg. Counsel Report, pp. 2, 56-57 [run across selected pages included with GSMOL initial brief, Ex. I]). ^thirteen However, a complaint under § 2705.half-dozen is at present awaiting before the Committee. (Come across Matthews v. Meadows Management, et al., C.99-08-040.) ¹⁴ Peradventure it is worth noting that in 1921, unlike today, the tenant'due south cost of utility services was traditionally bundled into the rent. Information technology is unclear whether today'southward Court would come across the Story five. Richardson "individual enterprise" differently if water and sewer services were billed separate from hire and in an amount in backlog of a simple pass through of the landlord's utility costs. ¹⁵ Division 5 of the Public Utilities Code, Section 10001 et seq., governs utilities owned past municipal corporations; Partition vi, Department 11501 et seq., governs municipal utility districts; and Division 7, Section 15501 et seq. governs public utility districts.

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