Hillsboro Properties

108 Cal. App. 4th 246 (2003), 133 Cal. Rptr. 2d 343, 2003 Cal. App. LEXIS 632

The Court of Appeal (First District, Division 2) determined that the proper construction of Section 739.5 was a question of law subject to independent review.  It affirmed a Commission order that directed a mobile home park owner to refund to tenants the portion of rent that improperly included sums related to the provision of submetered gas and electric service provided by the park owner.  In general, the Commission lacks jurisdiction over landlord provided quasi-utility services such as water or energy service in multi‑family buildings or mobile home parks (whether submetered or not.)  The absence of dedication precludes a finding of public utility status with regard to the landlord provider.  Story v. Richardson, 186 C 2d 162 (1921).  The decision here highlights the fact that, notwithstanding that limitation, the Legislature may direct the Commission to take actions outside the scope of the original Public Utilities Act. Section 739.5 requires the Commission to insure that the “master-meter customer” (typically not a public utility but rather a residential landlord) to maintain certain rate levels.  Absent such express authority from the Legislature, the Commission may only compel actions by non-utilities only indirectly, by approving or requiring utility tariffs with which the non-utility must comply under threat of disconnection.  (In days of yore, some of these tariff provisions were fairly absurd.  See Para. 70, infra).  It is not always easy to determine whether the Legislature intends to extend the Commission’s reach to non-public utility entities; does Section 780.5, for example, vest the Commission with jurisdiction over metering in buildings constructed in the LADWP service area?  Another notable aspect of the case is the Court’s affirmation that the directives of the Commission, with respect to a matter lying within its jurisdiction, take precedence over a local ordinance.  Indeed, the Huntington Beach court would likely have so concluded had the matter been properly joined at the Commission (See, Para. 14, supra).

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