Final Projects for Completion of Underground Utility Program

1
Final Projects for Completion of Underground
Utility Program

• City Council
• March 14, 2016
• Item 16

2
Recommendation

• CEQA Exemption Not a Project
• Discontinue the Underground Utility Program After
  Completion of Districts Under Construction
• Hill Avenue
• Alpine Street
• Discontinue Surtax Collections
• Additional Recommendations within Six Months
• Permanent repeal or repurposing of the Surtax
• Disposition of any remaining Surtax funds

3
Management Partners Recommendations

• Review the Goal of the UUP to Determine the
  Extent of Undergrounding Desired
• Determine If and When the Surtax Should Be
  Discontinued 

4
UUP Program

• Established in 1968 Under PMC 13.14
• City Council calls for public hearings to
  establish underground utility districts based on
• Public necessity
• Health
• Safety or welfare
• The UUP was expected to result in
• Increased electric service reliability
• Lower operating costs
• Beautification of the City

5
UUP Street Categories
Category Type Total Length
I Arterial Roads Collector Roads 126 Miles 75 Mile Completed 51 Miles Remain
II Residential Rear Property Easements Alleys 94 Miles
Total 220 Miles
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Circuits Identified in UUP

• Total Electrical Distribution System
• 1,658 circuit miles
• 1,042 miles (63) underground

7
UUP Experience

• Electric Reliability Tradeoffs
• Higher Costs Construction, Repair, Replacement
• Construction Challenges, Delays
• Underground conditions, structures, trees
• Coordination with other utilities
• Customer cooperation and costs
• Increasing Costs, Budget Overruns
• Substantial Resource Burden

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Established Districts
District Length (mi) Est Cost (M) Cost per Mile (M/mi) Cost Per Property ()
Hill Avenue 1.42 10.7 7.5 51,700
Alpine Street 0.6 5.15 8.6 95,400
Mountain Street 0.6 9.0 15.0 155,200
N Raymond 2.0 24 12.0 97,200
Total 4.62 48.85 10.6 86,300
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Time and Cost to Complete
UUP Streets Time and Cost to Complete
Recommended Category I 2 miles 3 Years Construction 16 million Total 10 million already incurred No additional Surtax collection
All Category I 51 miles 100 years Surtax collection 25-50 Years Construction 600-700 million
Category II 94 miles 300 years Surtax collection Additional 50-100 Years Construction 75-125 years from now 2 billion Total
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Annual OM Costs

• 400 per mile for overhead circuits
• 1,300 per mile for underground circuits
• Vault replacement a major driver

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Reliability - Outages

• Underground circuits have fewer but longer
  outages

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Surtax Funding

• Surtax on electrical charges per PMC 4.24
• Rates updated in General Fee Schedule
• First 1,000 of monthly bill 4.34
• Next 4,000 of monthly bill 3.70
• Next 20,000 of monthly bill 2.47
• Over 25,000 of monthly bill 1.21
• 5-6 million annual revenue
• 44/year for typical 500 kWh customer

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Alternatives
Alt Action Implications
1 Discontinue Surtax Terminate UUP upon completion of Hill Avenue and Alpine Street Majority of current UG fund balance available for repurpose or refund Reduce expense and staff resources needed to transfer UUP to PWP Work completed by late 2018
2 Discontinue Surtax Terminate UUP upon completion of Hill Avenue, Alpine Street, and Mountain Street 3 of 4 established UG districts would be completed A portion of UG Fund would remain for refund or repurposing at a later date Work completed by late 2020
3 Complete all four established districts, including N. Raymond Then Terminate UUP Surtax terminated within 2 years when sufficient funds are collected All existing underground districts would be completed by late 2023
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No Action Alternatives
Alt Action Implications
4 Continue UUP Complete Category I streets No City Council action required at this time 51 miles of Category I streets Surtax collection would continue for approximately 100 years Work completed in 25-50 years
3 Continue UUP Complete Category II streets No City Council action required at this time 51 miles of Category I and 94 miles of Category II streets Surtax collection would continue for 300 years Work completed 75-125 years from now
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Ongoing Undergrounding

• Utility-Driven Projects
• Reliability improvements
• Short distances
• Cable and telephone wires remain in place
• Poles not removed
• Customer-Requested
• Individual property electrical service
• Underground connection to nearest pole/vault
• Costs borne by customer

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Category I Streets - Overall
Mountain Raymond
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Underground Completed