Undergrounding of UtilitiesBy Virginia Lew
In 1967, the California Public Utilities Commission (CPUC) adopted the policy of placing utility service underground for new developments and to gradually replace the overhead existing utility lines.
Under Rule 20A, the replacement of existing overhead lines is funded by a percentage of revenue collected by the CPUC from all wire-based utilities. The utilities pay approximately 85% of the total cost, with the homeowners paying the balance. The approximate 85% share paid by the utilities will usually pay for not only the undergrounding costs but also up to 100 feet of the trenching to the house. A 1999 revision to Rule 20A added that PG&E will now also pay up to $1500 per service entrance to convert electrical panels to accept underground service. To qualify, a community must form an undergrounding assessment district by collecting the signatures of at least 70% of the property owners within the designated area. These 70+% of property owners must agree to the formation of an assessment district, which is then binding on all the residents in the designated area. Typically, the assessment district will determine what its costs will be and divide the amount equally among the property owners.
Rule 20A allows for undergrounding of utilities if a street meets one of these criteria:
Under Rule 20B, an undergrounding assessment district could be formed without considering the criteria mentioned above. This would allow streets that do not meet the Rule 20A criteria to be part of an assessment district. This would also reduce the waiting time since the major limiting factor is how quickly the project can be funded. The trade-off is PG&E would pay only about 20%, SBC 35%, and Comcast 0% of their individual costs, with the homeowners paying the remainder (approximately 80-90%).
A third option is to contract privately to put our utilities underground. This would involve minimal interfacing with the utility companies. The costs would all be borne by the property owners, and an assessment district as described above would need to be formed.
The local (city) government could also pass a resolution to qualify a district for funding for Rule 20A or 20B. But this possibility is a remote one for Oakland owing to its budgetary constraints. It should be noted that the cost of new street lamps is totally borne by the assessment district. Lastly, it is possible to form multiple assessment districts within an otherwise single community. This allows for undergrounding to begin in an area where the property owners are quick to approve the assessment district formation. Subsequent phases can be scheduled later once those assessment districts are formed.
Benefits of Undergrounding
In 1987, the Oakmore Homes applied for status as an undergrounding district. The application was accepted, but there were restrictions imposed as to which streets could be included. OHA had asked for all of Oakmore Highlands’ streets to be included.
There was no successful argument that would allow the remaining streets of Oakmore Highlands to have underground utilities under Rule 20A. The utilities’ definition of “high” concentration of overhead lines is based on what is normal for the neighborhood. However, in 1999, AB1149 was signed into law. This bill ordered the CPUC to study ways to amend, revise, and improve rules on undergrounding. One specific issue was how to eliminate the patchwork of overhead and underground wires that occurs in a neighborhood when certain streets fail to meet Rule 20A criteria. It is possible that by the time Oakmore gets its turn to take the overhead lines underground for the streets mentioned above, the remaining streets may also be included in the project.
Oakmore is 4th from the top of the list of applicants for utility undergrounding. Currently ahead of Oakmore are:
The bankruptcy of PG&E slowed the pace of undergrounding, although this ought not to have been a factor since undergrounding is funded separately from operations. The Oakland Hills Fire also created an emergency situation, and the rebuilding of the fire zone, with its undergrounding of utilities, superseded the applicants under Rule 20A. The MacArthur Blvd. project (#1 above) was taken out of turn: Its application was submitted in 1993, long after Lakeshore, Piedmont Pines, Oakmore, and 2 other communities had submitted their applications. But due to road resurfacing and other streetscape work, it was deemed more economical to incorporate their utility undergrounding with the other work. As a result of all these delays, the estimate start date for Oakmore is now at 2023. This estimate could be pushed back even further if the ground rules change. At this time, there are 34 business corridors identified by CEDA that have overhead lines. Any one of these commercial districts could preempt a residential one, just as the MacArthur Blvd. project did. Also a task force could be formed with the goal of examining how other areas of Oakland which are not on the waiting list (including residential areas) might get a chance to participate in undergrounding.
Oakmore may have to go back to the drawing board for Hoover . The PWA staff currently does not believe that Hoover qualifies under Rule 20A. Before we spend time and effort on this, though, we will wait for the report from an undergrounding committee whose mission is to research other options, their costs, and funding modalities. At an Oakmore community meeting in May 2005 many neighbors expressed frustration with the extremely long wait and the limited number of streets eligible under Rule 20A. Several commented that the immediate increase in property values after the overhead lines go underground could justify Oakmore going outside the Rule 20A box. We will keep you posted on the committee’s research.
It is important to keep in mind that undergrounding is not automatically going to occur. Remember that at least 70% of the affected homeowners must agree to form the assessment district needed to fund the project. If all of Oakmore Highlands is permitted to participate, we would need more than 300 consenting households to launch the undergrounding. Alternatively, we could divide Oakmore into multiple sections so that reluctant property owners in one area would not keep a more enthusiastic sector from forming their own district.
Not all residents will be enthusiastic about undergrounding for the following reasons:
Generally speaking, the more households participating, the lower the cost to each homeowner. There are savings to be had with bulk. Still, the cost will be several thousand dollars per home even under Rule 20A. Under Rule 20B or with independent contracting, the work would result in much higher costs. There are several payment options that can be considered when the time draws nearer:
It is premature to discuss payment options any further at this point. However, if you have an idea on this subject, send it to the Oakmore Homes Association.
We will report any and all developments as they occur. You can check the version date when you visit this page.
July 11, 2005
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