(November 30)   Chino Hills residents are very likely to receive an unwanted Christmas gift in December in the form of notice that the city’s households will be called upon to defray a significant portion of the cost of undergrounding power lines though the city.
Those costs could be as high as $26,000 per household to be amortized over 25 or thirty years, either in the form of increased electrical rates or assessments, the Sentinel has learned.
In 2009, the board of the California Public Utilities Commission granted Southern California Edison clearance to erect a series of 198-foot high power transmission towers through the heart of 44.7 square mile Chino Hills along a long-existing power corridor easement owned by the utility as part of the Tehachapi Renewable Transmission Project. Those lines are intended to convey electrical power,  generated at what will be the world’s largest windmill-driven electrical generating field near Tehachapi in Kern County, to the greater Los Angeles metropolitan area. The $2.1 billion project is part of Southern California Edison’s effort to meet state-mandated renewable energy goals.
Fearing a host of problems from the imposition of the towers, including significant negative impacts on property values in the city, the Chino Hills City Council authorized the expenditure of over $2.3 million to employ attorneys and make other efforts to contest the Public Utility Commission’s action, including a suit against Southern California Edison  alleging the company had “overburdened” the power line easements. That legal effort failed when West Valley Superior Court Judge Keith D. Davis ruled the California Public Utilities Commission has exclusive jurisdiction regarding the route used by Edison, and the suit was thrown out. Chino Hills appealed Davis’s ruling to the 4th District Court of Appeal, asserting the city had the right to have the case heard by a jury, but in September 2011 the appeals court affirmed Davis’ decision.
Beginning last year, Edison, which has long had a 150-foot wide right-of-way for its power lines that runs for 5.8  miles through upscale Chino Hills from Tonner Canyon to the Riverside County line,  erected 12 of the towers within the city limits and another 5 in Carbon Canyon before a city appeal to the California Public Utility Commission (PUC) and Public Utility Commission Chairman Michael Peevey in particular succeeded in a temporary halt to the towers’ construction being granted in November 2011 while a potential alternative, such as undergrounding the lines or rerouting them through Chino Hills State Park, was explored.
The rerouting alternative has been discarded, such that the only realistic chance that the towers will be de-erected consists of the undergrounding of the lines. That approach, however, will be very expensive and the PUC has given indication it does not expect Edison to bear that cost alone. The primary beneficiaries of the undergrounding, the city of Chino Hills and its residents and landowners, are expected to participate in carrying that financial burden.
PUC President Michael Peevey previously asked Edison to provide cost data on a potential undergrounding by February 28, 2013. On November 15, Peevey asked Edison to provide the commission by December 3 with a detailed report cataloging the costs and scope of the materials and service contracts associated with the undergrounding alternatives, along with Edison’s cost recovery proposals.
The Sentinel has learned that Edison has calculated the cost of trenching out a six-foot wide and six-foot deep, 3.5-mile long swath through town and undergrounding a single line to be  $300 million to $473 million, and  undergrounding a double-circuit line to be $703 million to $1 billion.
Chino Hills homeowners will see annual assessments approaching $900 per year to cover the city’s cost for directly participating with Edison in undergrounding the Tehachapi Line or annual rate increases of anywhere between $800 to $1,000 if Edison undertakes the undergrounding on its own
Multiple options exist by which that share of the cost could be defrayed or amortized. One option would be to bypass the city government altogether and have the city’s ratepayers, as Southern California Edison customers, bear the cost through a special surcharge on their electric bills. Another option would be for the city to share in the burden by issuing bonds or taking out loans and using the bond proceeds or the loan to cover its portion. One formula proffered consisted of the city having its business and residential elements splitting the debt service responsibility on the loans or bonds. In this way, the debt service on an issuance of $500 million over 30 years would require total payments of roughly $1 billion, including interest. Assuming the business community would pick up half that amount over the 30-year life of the loan or bonds, Chino Hills’ homeowners would be called upon to pay $500 million to bondholders or the lending institution over the thirty year life of the obligation. With roughly 18,700 households in the city, each household would be responsible for $26,737.96 of that debt. Defrayed over thirty years, each household would be called upon to assume a yearly assessment of $891.26. Such an assessment, if passed by the city council, would be placed on each homeowner’s property tax bill.
Part of Peevey’s rationale for moving up the date for Edison to provide its figures is that the PUC wants to facilitate the completion of the Tehachapi project by 2015, and having a cost sharing mechanism involving the city of Chino Hills or a rate recovery process in place by mid-2013 is deemed crucial to that goal.