(July 13) Chino Hills homeowners will see annual assessments approaching $900 per year to cover the city’s cost of undergrounding the Tehachapi Line, according to one formula calculating the cost of eliminating the presence of  electrical towers through this upscale community in the southwestern corner of San Bernardino County.
In 2009 Southern California Edison obtained from the California Public Utility Commission over Chino Hills city officials’ objections permission to utilize the long-existing 3.8 mile-long power corridor  right-of-way through Chino Hills from Tonner Canyon to the Riverside County limits to erect 198-foot high towers to hold the electrical lines that are to traverse the 44.7-square mile city.
The city of Chino Hills sued Edison in 2010, claiming the company was on the verge of “overburdening” the power line easements, but West Valley Superior Court Judge Keith D. Davis ruled the California Public Utilities Commission has exclusive jurisdiction regarding the route used by Edison. Chino Hills appealed Davis’s ruling to the 4th District Court of Appeal, but on September 12, 2011 the appeals court affirmed Davis’ finding that the California Public Utilities Commission and not the courts has exclusive jurisdiction over property rights issues between the city and Southern California Edison (SCE). That legal effort cost the city more than $2.3 million.
Even as the towers were being erected in Chino Hills last fall, the city made a last ditch appeal to California Public Utilities Commission President Michael Peevey, who visited the city and called for a delay while alternatives to the towers were sought and research on and discussions of alternative routing methods were carried out. Further work on the towers was suspended on November 11.
After months of on-and-off negotiations that have not settled the issue, on July 2 Peevey ordered Southern California Edison and the city of Chino Hills to ready information and prepare testimony by February 28, 2013 pertaining to the options for undergrounding the massive scale transmission lines.
While Peevey stopped short of saying that the towers, 18 of which have been erected within the city including Carbon Canyon, will be dismantled, he did indicate the Public Utilities Commission (PUC) will conduct a forum by which alternatives to the towers will be thoroughly and comprehensively considered in time for Southern California Edison to have the  Tehachapi Renewable Transmission Project completed by mid-2015. The language within Peevey’s order indicated undergrounding of the lines was the desired objective and Chino Hills residents and officials were greatly encouraged by the prospect that the towers, which locals consider to be a visual blight that will negatively impact property values in the city, will be removed. They generally looked beyond the implication in Peevey’s order that the city and its residents will need to bear a good portion of the financial burden of undergrounding the electrical circuits.
“Chino Hills should develop prepared testimony responsive to Southern California Edison’s prepared testimony on the three cables per phase and two cables per phase in an undergrounded, single-circuit cross-linked polyethylene conduit in the existing Chino Hills right-of-way,” Peevey wrote in his order. “In particular, Chino Hills should identify and clearly quantify any financial commitment it is prepared to make to minimize the total additional cost of an underground option as compared to the project initially approved.”
Among Chino Hills officials there was reluctance to address that element of Peevey’s order which pertains to the city’s financial participation in defraying the cost of the undergrounding.
Both councilwoman Gwen Norton-Perry and councilman Peter Rogers, citing what they called a conflict of interest that exists because of the proximity of their homes to the power line corridor, when contacted by the Sentinel declined to make any comment or field any questions pertaining to the full implication of Peevey’s order, including whether they believed the city’s residents would be willing to bear a portion of the cost of the undergrounding.
At issue is how much of the cost the city and its residents will be called upon to shoulder and how that cost would be defrayed. One suggestion is that Southern California Edison and the city would split the cost.
According to Edison officials, the cost of digging a six-foot wide, 3.8-mile long trench the entire length of the existing easement through town and burying a double-circuit line will run from $703 million to $1 billion. In this way, the city’s share of the cost, assuming it will be called upon to pick up half the tab, will come to somewhere between roughly $351.5 million and $500 million.
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.
When he was asked directly whether he saw the city’s willingness to bear some of the cost of the undergrounding of the line as key to an agreement to eliminate the towers in Chino Hills, Mayor Art Bennett declined to comment.
Nor would Bennett expound on whether the city has contemplated using its reserves or bond financing or loans to pay for its portion of the undergrounding cost. He likewise declined to speak to whether he believed Edison’s $703 million to $1 billion estimate of the undergrounding cost to be realistic or whether he considered it likely that the city’s residents would collectively be willing to share in paying for a portion of the undergrounding. Bennett was unwilling to say whether he believed that Southern California Edison should be totally responsible for the undergrounding cost.
When he was asked if the city would be willing to levy assessments on its residents to ensure the lines are undergrounded if the PUC indicates that some degree of city or city ratepayer participation will be needed to achieve that end, Bennett offered no response.
Councilman Bill Kruger said he was reluctant to make any definitive statements about the matter because “I don’t want to give a quote now that would be inappropriate since what is being looked at is all the different options for undergrounding. The PUC‘s decision is not going to happen for a year and right now there are ideas all over the place.  We can’t make a definitive statement until we know what all of the options are and what So Cal Edison will be presenting.”
Nevertheless, Kruger said, his council colleagues and other city officials recognize that the PUC expects the city to share in the cost of the line undergrounding.
“That is an issue,” Kruger said. “That is part of the big picture. No one knows what the cost will be. I’ve heard everything from nothing up to a super high number. There will be some cost. Some people are not going to be happy with that. But until there is a firm offer [from Edison] it is counterproductive to be talking about what that number should be.”
City manager Mike Fleager also acknowledged the city was  “asked to submit testimony in that area in regard to contribution to defray some of the cost,” adding he was “not surprised” by Peevey including that in the order.  “We have been debating  since before 2009 the cost of any and all added costs Edison would have above its ordinary costs [in erecting the towers],” Fleager said. “There has been discussion and debate about the alternatives. But at this point we will be preparing significant testimony on all of the issues and we will be going through a thoughtful process with regard to submitting all of our comments from the standpoint of undergrounding and financial contributions, and it is premature to be disposed to any option.”
As to what parameters there are for the city’s financial participation in the undergrounding effort, Fleager said he was unaware “of just what alternatives the PUC is looking at. There isn’t any particular formula or percentage that has been dictated to the city.” Thus, he said, it was “premature to predict what would be required by the PUC.”
Councilman Ed Graham, noting that the city spent $2.3 million in legal fees in seeking to countermand the PUC permit for the towers, said he was not convinced the city or its residents should be called upon to pay for any part of the undergrounding
“I think we have done quite a bit already,” he said.
If the PUC dictates that the city must share in the undergrounding cost or otherwise accept the towers as a permanent part of the landscape, Graham said he did not know whether the city’s residents would support the city becoming financially involved.
“I really have no idea,” he said.
Nor was he in a position to say whether the city council would support using the city’s reserves or creating an assessment district to pay for the undergrounding. “We haven’t discussed that,” he said.
Despite the consideration that the city has spent the last three years in an effort opposing the towers, Graham said city officials have not yet initiated any sort of dialog with city residents relating to the concept of taxpayer or ratepayer participation in defraying the cost of burying the cables and that the time to broach that subject with the public has not yet come.
“That’s way down the road,” he said. “It’s way too early for that.”
Asked if he was concerned that by temporizing and not having in place an assessment district or some other means of generating revenue to pay for the undergrounding, the PUC might decide against the undergrounding option and simply allow the towers to remain in place and be powerized, Graham said, “I would hope that wouldn’t be the case. We have to wait to February 28 to see what happens.”