VII. Public Review and Comment

The draft decision of the Administrative Law Judge in this matter was mailed to the parties in accordance with Pub. Util. Code §311(g)(1) and Rule 77.7 of the Rules of Practice and Procedure. Comments were filed on October 24, 2001, and reply comments were filed on November 16, 2001.

Comments were received from City of Berkeley, California Alliance for Utility Safety and Education (CAUSE) California Cable Television Association and AT&T Communications of California Inc. (CCTA/AT&T), Citizens Concerned About EMFS and Fund for the Environment (CCAE/FUND), County of Los Angeles, City of Del Mar, League of California Cities, Town of Los Altos Hills, 19^th Street Neighbors, City of Oakland (Oakland), Office of Ratepayer Advocates (ORA), Pacific Bell Telephone Company, Polaris Group, Pacific Gas and Electric Company (PG&E), Margit Roos-Collins, City of San Ramon, San Diego Gas & Electric Company (SDG&E), City and County of San Francisco, Southern California Edison Company (Edison), The Utility Reform Network (TURN), and Verizon California Inc.

Reply comments were received from CAUSE and CCAE, CCTA/AT&T, Oakland, ORA, PG&E, SDG&E, Edison, and TURN.

Findings of Fact

1. On January 6, 2000, the Commission issued an Order Instituting Rulemaking (OIR.) 00-01-005, to implement AB 1149. AB 1149 required the Commission to study ways to amend, revise, and improve the rules for the conversion of existing overhead electric and communications lines to underground service.

2. PG&E's Tariff Rule 20 is the vehicle for the implementation of the underground conversion program.

3. As part of the OIR, The Commission conducted workshops, held public participation hearings, and received comments and reply comments from participants.

4. Following the completion of the initial phase of the study, the Commission determined that the conversion program should continue.

5. The reforms set forth in this interim order are reforms that can be enacted based on the information already in the record of the proceedings.

6. Suggested changes that could benefit from evidence, testimony, and cross-examination will be explored in Phase 2 of this proceeding.

Conclusions of Law

1. We will adopt a model Tariff Rule 20 that will amend, improve, and revise the current rules for conversion of overhead lines to underground.

2. PG&E, SDG&E, and SoCal Edison should meet and confer to draft a model Tariff Rule 20, that will be applicable to the three electric utilities, and incorporates the key changes in the attached Interim Order.

INTERIM ORDER

IT IS ORDERED that:

1. Pacific Gas & Electric Company (PG&E), San Diego Gas & Electric Company, and Southern California Edison Company immediately shall meet and confer to draft a model Tariff Rule 20, that will be applicable to the three electric utilities, and incorporates the key changes in this Interim Order.¹⁸

2. The utilities shall file an Advice Letter with the Energy Division, within 30 days of this order, setting forth the proposed Model Tariff Rule 20. Parties will then have an opportunity to comment on the proposed Model Rule. The Model Rule shall include the following:

· expanding Rule 20A criteria to includes arterial streets or major collectors;

· allowing Rule 20A funds to be used in combination with Rule 20B funds to promote more conversion projects; and

· allowing cities to mortgage Rule 20A allocations for up to five years.

3. The utilities shall create a formalized process whereby a point person at each of the utilities will meet, at least once every six months, with the city and residents who are in the queue for conversion projects, and meet, at least once every other month, with residents and the city once a conversion project is under way. It is incumbent upon the utility to insure that there is a continuing dialogue concerning the progress of the project, anticipated and unanticipated delays, and a completion date.

4. The utilities shall meet and confer and design a standardized reporting mechanism by which all utilities involved in conversion projects will keep data on each circuit, including the percentage of overhead and underground lines, what technology is used, and the age of the equipment, and file the data annually with the Commission Energy Division. Before the meet and confer, the utilities will schedule a workshop to solicit input from interested parties as to what should be contained in this data collection and reporting system. The goal of the data tracking and standardized reporting is to allow the utilities, the Commission, and interested parties, to track the safety, service reliability, and lifetime costs for both overhead and underground projects and make valid and reliable comparisons between systems. Following the meet and confer, the utilities shall file a Joint Statement setting an agreed upon data tracking mechanism that incorporates the key points specified in this order.

5. PG&E, Pacific Bell, and the League of California Cities shall meet and confer on the drafting of an updated Undergrounding Planning Guide, and report to the Energy Division as to when the update will be available, both in hard copy, and on the CPUC website.¹⁹

6. The Interim Order revising the rules governing the state's program to convert overhead electric and communications lines to underground will stay in place until further order of the Commission.

This order is effective today.

Dated December 11, 2001, at San Francisco, California.

LORETTA M. LYNCH

President

HENRY M. DUQUE

RICHARD A. BILAS

CARL W. WOOD

GEOFFREY F. BROWN

Commissioners

ATTACHMENT A

(Page 1 of 3)

Summary of workshop participants

Partial List of Participants in Undergrounding Workshops [OIR 00-01-005], including CPUC staff.

(We have the sign up sheets for 6 of the 8 workshops)

Name Organization (if any)

Bill Adams

Jack Biggins California Cable Television Association (CCTA)

Garth Black Cooper, White, & Cooper and 7 Local Exchange Carriers (LECs)

Scott Blaising California Municipal Utilities Association (CMUA)

Ellenmarie Blunt GTE California

Derik Broekhoff City of San Diego

Lee Burdick Prima Legal, counsel for Cox Communications California

Patricia Butcher SCWC (Bear Valley Electric District)

Manuel Camara Pacific Gas and Electric Company (PG&E)

John Cannon City of San Jose

John Capstaff Pacific Bell

Jerry Carlin City of Berkeley

Larry Chow GTE

Rocco Colicchia PG&E

John Dawsey San Diego Gas & Electric Company (SDG&E)

Holly Duncan

Connie Easterly Utility Design Inc. (UDI)

Dennis Evans Pacific Bell

Johan Fadeff City of San Francisco-Department of Public Works

Gerald Finnell City of Del Mar

Janice Frazier-Hampton PG&E

Peter Frech Citizens Concerned About Electro-Magnetic Fields (EMFs)

Margot Friedrich GTE

William Gaffney Energy Division, CPUC

ATTACHMENT A

(Page 2 of 3)

David Geier SDG&E

Eileen Golde 19^th Street Neighbors

Ellen Stern Harris Fund for the Environment

Michael Herz PG&E

Elroy Holtman City of Berkeley

Louis Irwin Office of Ratepayer Advocates (ORA), CPUC

Ed Jeffers Modesto Irrigation District (MID)

Karen Johanson California Alliance for Utility Safety and Education (CAUSE)

Larry E. Jones Southern California Edison (SCE)

L.J. Keller

Caroline Kelsey SDG&E

Tom Kimball MID

Chuck Lewis PG&E

David K. Lee Energy Division, CPUC

Carl Lower The Polaris Group

Lesla Lehtonen CCTA

Daniel Markels AT&T

Frank Marsman SDG&E

Dan McLafferty PG&E

Michael McKinney SCE

Karen Norene Mills California Farm Bureau

Jacqueline Mittlestadt City of San Diego, City Attorney

Bill Monsen MRW and Associates

Margie Moore Sempra Energy

John Morgan San Diego Office, CPUC

Robert Munoz MCI World Com

Jeff Nahigian JBS Energy & TURN

Steve Nelson SDG&E

Todd Novak Safety Branch, CPUC

Kevin O'Connor SCE

Lauri Ortenstone Pacific Bell

Virginia Oskovi City of San Diego

Al Oxonian City of San Jose

Carlos Parente SCE

Richard Pontius City of Oakland

ATTACHMENT A

(Page 3 of 3)

Roger Poynts UDI

Jonathan Radin Citizens Communications

Steven Rahon Sempra Energy

Mejgan Raouf CPUC

Wayne Reimer AT&T

Margit Roos-Collins

Cindy Sage Sage Associates

Gayatri Schilberg JBS Energy for TURN

Brian Schumacher Energy Division, CPUC

Glenn Semow CCTA

Dave Siino SDG&E

John Sirugo SCE

Paul Stein TURN

Michael Sullivan Friends of the Urban Forest

Steve Sullivan SCE

Susan Sutton 19^th Street Neighbors

Clayton Tang Energy Division, CPUC

Tina L. Taverner County of Orange

Jeff Trace SDG&E

Tom Trimbur City of San Francisco

Joan Tukey CAUSE

Hal Tyvoll CAUSE

David Van Iderstein SCE

Greg Walters SDG&E

Janine Watkins-Ivie SCE

Dan Weaver San Francisco Beautiful

Steven Weissman CAUSE

Dick White City of Berkeley

Tony Wilson SCE

Bob Woods SCE

Esmerelda Yans City of San Diego

Jason Zeller ORA, CPUC

Phil Zellers SDG&E

Mark Ziering Energy Division, CPUC

(END OF ATTACHMENT A)

ATTACHMENT B

Summary of those who filed written comments

Cities:

Oakland

Anaheim

Berkeley

San Diego

San Francisco

San Ramon

League of California Cities

Electric Utilities:

Pacific Gas and Electric

Southern California Edison

San Diego Gas and Electric

Telecommunications Utilities and Companies:

Pacific Bell

AT&T Communications

WorldCom Inc

Verizon

California Cable Television Association

Consumer Advocates:

California Alliance for Utility Safety and Education

Citizens Concerned about EMF's

Fund for the Environment

The Utility Reform Network

The Office of Ratepayer Advocates

California Small Business Roundtable

California Small Business Association

Others:

William Adams

Polaris Group

Margit Roos-Collins

Kensington Improvement Club

19^th Street Neighbors

(END OF ATTACHMENT B)

ATTACHMENT C

Page 1 of 3

April 24, 2001

The Honorable «FirstName» «LastName»

«JobTitle»

«Company»

State Capitol

10^th & L Streets, «Address1»

Sacramento, CA 95814

Dear «JobTitle» «LastName»:

Assembly Bill (AB) 1149 required the California Public Utilities Commission (CPUC) to study ways to amend, revise, and improve the rules for the conversion of existing overhead electric and communications lines to underground and submit a report to the legislature by January 1, 2001.²⁰ While the CPUC has yet to issue a formal report, I wish to provide my recommendations as the assigned Commissioner in the undergrounding proceeding²¹.

We heard from citizens, municipalities-including elected and appointed officials and representatives from public work departments, the utilities, utility workers, consumer advocacy groups, and neighborhood/community organizations. In summary, the overwhelming percentage of people spoke in favor of continuing, and escalating, the

ATTACHMENT C

Page 2 of 3

underground conversion program for aesthetic, safety, and reliability reasons. The repeated concerns raised were 1) the costs; 2) lack of accurate information; 3) lack of response and accountability from utilities and cities; and 4) and the demographic and social equity issues involved in the choice of what areas are chosen for Rule 20A

funding.²² My legislative and CPUC recommendations are cost effective and designed to address safety as well as aesthetic concerns. In Attachment A, you will find the recommendations I will bring before the CPUC in upcoming decisions.

My list of legislative recommendations is:

· provide funding for an undergrounding ombudsperson position and staff to oversee all conversion projects; · create different financing mechanisms for communities for Rule 20B and C projects; · fund an appeals process at the CPUC for complaints from citizens and communities on any aspect of the undergrounding process; and · increase the current level of funding for undergrounding, or add taxpayer funds.

Ombudsperson:

The need for an ombudsperson became clear when parties discussed their frustration with "getting the run-around" at the utilities, municipalities, and the CPUC. There is no one source of knowledge, no responsibility or accountability, and a total lack of coordination between the necessarily involved parties. The ombudsperson would meet with all involved parties-cities, utilities, residents and community groups-and facilitate the

ATTACHMENT C

Page 3 of 3

initiation of conversion projects and serve as a coordinator and trouble-shooter once a project was underway.

Financing Options:

The need for creating more financing options became clear when cities expressed their frustration with the current limits on the use of funds especially for Rule 20B and C projects. Options such as bonds, low-interest loans, and how cities can fairly deal with hold-out neighbors need to be addressed. The funding process needs to be streamlined and any unnecessary barriers removed. The ombudsperson would assist communities in creating undergrounding districts and exploring financing options.

Complaint Resolution:

In order for conversion projects to proceed seamlessly, there needs to be an appeals process at the CPUC for citizen complaints on allocation of Rule 20 funds; delays by the utilities in starting and completing conversion projects; unresponsiveness by utilities and local governments; and other undergrounding issues.

Additional Funds

It became clear that even with improvements to the management and financing of the current undergrounding program, without increasing the present level of spending, the state's goal of universal undergrounding is not possible within the foreseeable future. Many ratepayers will contribute their entire lives to Rule 20 funds, yet never reap the benefit of conversion projects in their community or neighborhood.

I offer these recommendations to the legislature while I pursue a two-phase process at the CPUC. It is anticipated that in Phase 1, the CPUC will issue an Interim Order that adopts the proposals set forth in Attachment A, and in Phase 2, the CPUC will schedule hearings on the topics that can benefit from evidence, testimony, and cross-examination

Cordially,

Henry M. Duque

(END OF ATTACHMENT C)

ATTACHMENT A OF ATTACHMENT C

Page 1 of 2

Phase 1 Interim Order

· expand Rule 20A criteria to add more areas within the definition of public interest (i.e. arterial streets or major thoroughfares, and areas of fire hazard and earthquake risk);

· expand the use of Rule 20A funds to allow more flexibility to the cities to use the funds in combination with Rule 20B funds to promote more conversion projects;

· improve communication links between the utilities and the residents before and during undergrounding projects;

· require standardized reporting from the utilities on the expenditure of funds;

· allow cities to mortgage Rule 20A allocations for up to five years;

· order the creation of an updated Undergrounding Planning Guide; recommend coordination between the League of California Cities, Pacific Bell, and Pacific Gas and Electric Company; and placing the final document on the CPUC website in a timely manner.

Phase 2 Topics Subject to Evidentiary Hearings

· explore the creation of universal standards for conversion projects so that third parties could competitively bid on projects without compromise of quality, safety, or reliability;

· investigate whether there should be a "breakpoint"^* in allowing new overhead pole and line installation;

· explore incentives for utilities so that they will be motivated to engage in conversion projects and to complete them on time and within budget;

ATTACHMENT A OF ATTACHMENT C

Page 2 of 2

· explore whether unbundled charges for undergrounding should appear as a line item on utility bills.

· investigate if there is a fair and equitable competitively neutral recovery mechanism for telecommunications carriers to recover their undergrounding costs;

(END OF ATTACHMENT C)