Administrative
Report
N.1., File # 23-5479 Meeting Date: 2/7/2023
To: MAYOR AND CITY COUNCIL
From: TED SEMAAN, PUBLIC WORKS DIRECTOR
TITLE
DISCUSSION AND POSSIBLE ACTION REGARDING THE PROCESS FOR FORMING UTILITY
UNDERGROUNDING DISTRICTS IN REDONDO BEACH
EXECUTIVE SUMMARY
As part of the Strategic Plan, the City Council requested information regarding the process for forming utility undergrounding districts in Redondo Beach. This report provides background information regarding the various types of undergrounding projects regulated by the California Public Utilities Commission's Rule 20. Representatives from Southern California Edison will be available at the meeting to provide additional information.
BACKGROUND
The California Public Utilities Commission's (CPUC) Rule 20 provides policies and procedures for the conversion of overhead power lines and other equipment to underground facilities, a process known as "undergrounding." The benefits of undergrounding projects include enhanced reliability of the power system, enhanced safety and aesthetic improvements. Some residents within undergrounding areas also benefit from enhanced scenic views. Under Rule 20, undergrounding projects are financed by utility rate funds, combined rate funds and local tax proceeds, or private funds, depending on whether the project falls under Rule 20A, Rule 20B or Rule 20C.
Rule 20A
Rule 20A projects are paid for by all energy ratepayers, not just those who live in areas where facilities will be undergrounded. City and county governments choose the projects, which must produce a benefit to the general public, not just for customers in the affected area. Project locations are limited to streets with heavy traffic volumes and extensive use by the general public. Southern California Edison (SCE) allocates rate funds to communities within its service area using Rule 20 tariffs, which are based on the ratio of customers served by overhead facilities to the total number of customers in the community.
On June 3, 2021, the CPUC issued Decision 21-06-013, which required SCE to discontinue allocating new Rule 20A funds after December 31, 2022. Cities and counties are able to complete on -going Rule 20A projects using existing funds, but no additional funds will be allocated. There is one on-going Rule 20A project in Redondo Beach which will complete the utility undergrounding along Pacific Coast Highway’s last remaining segment between Prospect Avenue and the southern City limit. This is an active project that has been designed by SCE and received permits from Caltrans.
SCE is currently coordinating joint trench efforts with the other utility companies utilizing the existing
N.1., File # 23-5479 Meeting Date: 2/7/2023
SCE is currently coordinating joint trench efforts with the other utility companies utilizing the existing above ground poles.
Rule 20B
If an area is not eligible for Rule 20A, Rule 20B allows rate funds to be used to subsidize an undergrounding project. Undergrounding costs are paid for by the applicant, typically property owners within the project area, with a credit provided for the cost of a new equivalent overhead system and removal of the existing overhead system. The amount of the credit varies, but is usually 20-25% of the total project cost. Rule 20B project areas must be a minimum length of one block or 600 feet, whichever is less. Rule 20B would apply to a group of Redondo Beach property owners wishing to form an undergrounding district in their neighborhood.
A number of Rule 20B utility undergrounding projects have been implemented in the City of Manhattan Beach over the last 25 years. Most projects were initiated by property owners seeking to enhance ocean views in neighborhoods close to the ocean. The process Manhattan Beach uses to form districts includes the following:
- A group of property owners submits a petition proposing a new district, with signatures of 66% of property owners required
- The City verifies signatures and requests design plans from participating utilities The City fronts the cost for the design plans and is later reimbursed by the property owners - Based on the design plans the City solicits bids for construction - Once a project cost is established, the City retains an assessment engineer to allocate costs assessed to each parcel
- Ballots are sent to all parcel owners, who then vote for or against the district. 50% support is required to continue
- Funds are collected from the parcel owners.
- Parcel owners are given several options to pay over time through property tax assessments - Projects are implemented
Attached is the Undergrounding Fact Booklet the City of Manhattan Beach provides to residents interested in forming new undergrounding districts. Also attached is SCE’s Rule 20 Guidebook.
Rule 20C
Rule 20C enables individual property owners to pay for undergrounding electric lines and equipment if neither Rule 20A nor 20B applies. The applicant pays for the full cost of undergrounding, with a credit provided for the estimated salvage value of the removed electrical facilities.
Representatives from SCE will be available at the February 7, 2023, City Council meeting to provide additional information and answer any related questions.
COORDINATION
The item was coordinated by the Public Works Department.
FISCAL IMPACT
There are no fiscal impacts associated with this report. If Redondo Beach property owners were to initiate a Rule 20B undergrounding district, the Public Works Department would likely have to commit
N.1., File # 23-5479 Meeting Date: 2/7/2023
a significant amount of staff time to assist with administering the project.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· SCE Rule 20 Guidebook
· City of Manhattan Beach Undergrounding Fact Booklet