March 24, 2025
Dave Kiff
City Manager
City of Laguna Beach
505 Forest Avenue
Laguna Beach, CA 92651
Dear Mr. Kiff,
Southern California Edison (SCE) is pleased to offer this letter of support for the City of Laguna Beach (“City’s”) application for federal funding as part of the Building Resilient Infrastructure and Communities (BRIC) federal grant program. In particular, SCE understands the requested funding will be used to facilitate the undergrounding of certain utility lines along Laguna Canyon Road.
SCE, a subsidiary of Edison International ("EIX"), is an investor-owned electric utility operating in the State of California, covering over 50,000 square miles and serving 15 million people, including the territory covered by the City’s proposal. SCE has a strong interest in reducing wildfire risk and improving the resiliency of the grid within the SCE service area. As such, SCE agrees with the Project’s overall concept and program goals to increase and enhance hazard mitigation, risk reduction, wildfire preparedness, and disaster resiliency for households and businesses.
You have asked that SCE identify potential sources of funding that may be available for the Project. It is our understanding that the City’s application seeks BRIC funding to underground approximately 2.5 miles of overhead transmission, distribution and telecommunications lines located along Laguna Canyon Road between Morro Substation and El Toro Road. SCE has identified the following sources of funding that may be available to the City if its proposal for BRIC funding is successful. Please be aware that while SCE supports this Project, we do not have unilateral discretion to make other company sources of funding available as those decisions are subject to regulatory rules and authorization. The specific details of the regulatory funding sources are found in the official CPUC filings and documents, and we refer you, CalOES and FEMA to those sources for definitive information. We have summarized this information below, but are happy to provide you the relevant CPUC materials upon request.
1. SCE Tariff Rule of Service 20
SCE understands that the City plans to request the undergrounding of the subject utility lines pursuant to and in accordance with the applicable provisions of SCE Tariff Rule of Service 20. SCE Tariff Rule of Service 20 is the CPUC tariff that governs the undergrounding of CPUC jurisdictional electric utilities within SCE’s service territory and contains rules determining who is responsible for the cost of such undergrounding. As such, compliance with Rule 20, and any other applicable tariff provisions would be required. Cost allocation, including credits provided by SCE for the Project, will be determined in accordance with the applicable Tariff. Over the past year SCE has worked diligently with your staff on the City’s Rule 20 B Project to underground portions of Laguna Canyon Road. Under Rule 20 B, the costs of undergrounding utility lines are partially borne by those requesting the undergrounding conversion.
Attachment 4
14 As part of the Rule 20 B process and at the City’s request, SCE explored the feasibility of using accrued Rule 20 A credits (which are funded by SCE customer funds) to pay for a portion of the Project. We determined it would be permissible to dedicate available credits under the Tariff so long as the work is divided into two separate Projects (e.g., a transmission Project and a distribution Project). Any Rule 20A work credits utilized on a Rule 20B project must be repaid prior to the project entering construction per Rule 20 Section B.4. The City currently has a reserve balance of $2,371,685 of customer-funded Rule 20 A credits, and if the City assigns those funds to the Laguna Canyon Road Project, they would be available to temporarily offset the costs of the Rule 20 B Project. The reserve balance could change if funds are ultilized for existing Rule 20A projects. If the City elects to assign those funds to a different Project (or if the funds are required by an existing Rule 20A project), the City would be responsible for covering this amount for the Laguna Canyon Project. Additionally, the overhead equivalent, which is a credit that would apply to the portion of the Project conducted under Rule 20 B, is based on a number of assumptions, including that SCE can identify a feasible, executable route and that Project costs are subject to significant increases.
Lastly, SCE provided the City non-binding estimates for the proposed Rule 20 B for the transmission portion of the Project. The Rough Order of Magnitude (ROM) estimated cost to the City for this relocation is approximately $60,146,372. The ROM estimated transmission overhead equivalent credit to the City is approximately $3,428,177.
2. Targeted Undergrounding Program
Independent from the City-initiated Rule 20 Project, SCE has determined that portions of Laguna Canyon Road meet the risk criteria for inclusion in our targeted undergrounding program (TUG), which is one of the grid hardening strategies included in our comprehensive, state-approved Wildfire Mitigation Plan.1 Certain areas within SCE’s high fire risk areas are considered as “Severe Risk Areas.” In the Severe Risk Areas, the threat to lives and property is elevated to such an extent that SCE has determined that for public safety reasons it is prudent to not just significantly reduce ignition risk if not already hardened with covered conductor. TUG Projects are selected and prioritized based on their wildfire risk in the severe risk areas. Severe risk areas criteria include limited exit and entry points to communities, high burn frequency, high wind speeds exceeding covered conductor Public Safety Power Shutoff thresholds, exceptionally high potential consequences (could burn more than 10,000 acres within 8 hours), and communities of elevated concern. It is important to note that the extent of available TUG funding is currently at issue in SCE’s 2025 General Rate Case (GRC) at the CPUC. The amount of TUG implementation over the 2025-2028 period will depend heavily on the outcome of that pending regulatory proceeding. SCE is currently assessing the feasibility phase of the Project, which would involve undergrounding distribution lines only. The program only covers distribution lines and does not include undergrounding subtransmission, transmission or telecommunications lines A cost estimate for the TUG Project has not yet been completed.
As noted above, please be aware that this letter does not contain a commitment by SCE to contribute SCE funds to this Project. SCE’s participation will be governed by all applicable tariff requirements and is conditioned upon the outcome of SCE’s 2025 GRC, the successful completion of a mutually acceptable 1 Undergrounding Power Lines in Targeted High Fire Risk Areas (sce.com) 15 design, the negotiation and execution of necessary contracts, receipt of Project payment and any other necessary Project terms, conditions, and documents. In addition, both the City and SCE would be required to evaluate and address impacts to any internal SCE telecommunication systems and thirdparty facilities that may be co-located on SCE’s aboveground system.
SCE looks forward to working with the City on this Project.
Sincerely,
Cody Tubbs
Director, Public Affairs
Local Public Affairs
Southern California Edison
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