City Council Agenda Report
Meeting Date: October 21, 2025
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Senior Management Analyst
Subject
Interconnection Facilities Agreement with Southern California Edison Company Recommendation
A. Find that the proposed action is categorically exempt from California Environmental Quality Act (CEQA) review, in accordance with CEQA Guidelines Section 15301, because the project consists of the maintenance, repair or minor alteration of existing power poles and electric facilities and involves negligible or no expansion of an existing use; B. Approve and authorize the City Administrator to execute an Interconnection Facilities Agreement with Southern California Edison Company (SCE), in substantially the same form as submitted, for SCE to perform construction-related work to Interconnection Facilities, Distribution Upgrades, and Network Upgrades, in an amount not-to-exceed $15,807,553; and C. Authorize a contingency amount of ten percent (10%) or $1,580,755 for unforeseen changes in costs or other expenses not included in the proposal, and grant authority to the City Administrator to issue change orders for an amount up to the contingency amount, if necessary.
Background
The City is proposing to provide new electric service to several large commercial projects currently under development, which requires that up to 150 megawatts of new electric load be constructed at different locations in Vernon. The potential new electric loads will demand service from the City’s 66kV sub-transmission system that is interconnected with the Southern California Edison Company (SCE) Laguna Bell Substation (the Project).
In accordance with the Laguna Bell – Vernon Interconnection Service Agreement (IA), adopted on September 16, 1997, via Resolution No. 7017, Vernon Public Utilities (VPU) submitted a request to SCE for Interconnection Service and Transmission Service. Although the service request was made under the existing IA, SCE concluded that a System Impact Study and a Facilities Study were required to determine the adequacy of SCE’s electrical system including, but not limited to, the portion of SCE’s electrical system that is part of the California Independent System Operator (CAISO) Grid. Accordingly, on September 20, 2022, the City entered into the Laguna Bell-Vernon Interconnection Service Agreement Combined System Impact and Facilities Study Agreement with SCE. SCE has completed the study, and the Interconnection Facilities Study Report (Report) was published on September 7, 2023. The Report detailed the upgrades necessary for the SCE system to accommodate the new electric load and includes enhancements to facilities at the Laguna Bell Substation and two (2) sub-transmission source lines from SCE’s Laguna Bell Substation to the City boundaries.
On April 16, 2024, the City Council approved a Letter Agreement with SCE (Letter Agreement) to support the goal of increasing the City’s electric load capacity for potential new development projects. Following City Council approval, SCE and the City executed a Letter Agreement with revised start dates for project commencement and an updated payment schedule. On May 21, 2024, City Council ratified the executed Letter Agreement. The Letter Agreement involves necessary engineering and procurement work for Interconnection Facilities, Distribution Upgrades, and Network Upgrades, scheduled to be completed in two phases.
Phase 1 of the project includes engineering and material procurement by SCE, as outlined in the Letter Agreement. The estimated cost to complete Phase 1 is $14,024,895, of which the City has paid $11,682,326 to date through sixteen (16) monthly payments.
VPU staff recommends proceeding to Phase 2 of the Project and entering into an Interconnection Facilities Agreement with SCE to complete the construction portion of the Project in the amount of $15,807,553, which will be paid in twenty-one (21) monthly installments. Additionally, staff recommends a contingency amount of ten percent (10%) or $1,580,755 for unforeseen changes in costs or other expenses not included in the proposal. The Letter Agreement will be terminated upon the execution of the Interconnection Facilities Agreement.
Estimated Cost for Phases 1 and 2: $27,489,879
Payments issued for Phase 1: ($11,682,326)
Outstanding amount for Phase 2:
$15,807,553 (includes the remaining balance from Phase
1 ($2,342,569) and the estimated construction costs for Phase 2 ($13,464,984)
VPU staff has included the Project funding for the remaining balance of $15,807,553 as part of the Fiscal Year 2025-26 budget and will budget accordingly in subsequent years. The outstanding amount will be paid to SCE through twenty-one (21) monthly payments. Pursuant to Vernon Municipal Code (VMC) Sections 3.32.110 (A)(2) and 3.32.110 (B)(1), the proposed work is exempt from competitive bidding and competitive selection, as SCE is the City’s transmission service provider, and the construction work related to Interconnection Facilities, Distribution Upgrades, and Network Upgrades can only be performed by SCE. Pursuant to VMC Section
3.32.030(A), City Council approval is required for the proposed agreement as the total value of the contract exceeds $100,000.
The SCE Interconnection Facilities Agreement has been reviewed and approved as to form by the City Attorney’s Office.
Fiscal Impact
The fiscal impact is not-to-exceed $17,388,308. Sufficient funds are available in the Electric Fund, Engineering, Capital Outlay, Account No. 055-050-585-660000 for the current fiscal year and will be budgeted in subsequent years.
Attachments
1. SCE - Interconnection Facilities Agreement