Approval
The record in this proceeding is replete with possible values for the property, some expressed as a total price, some as a per-acre price. The following table is provided to aid in the comparison of some of these numbers.16
Source |
$ per acre w/o easements |
$ per acre w/easements |
Total price w/easements17 | |
1 |
SDG&E original proposal |
$14,577 |
$7,246 |
$100,000 |
2 |
SDG&E revised proposal |
$79,592 |
$20,867 |
$287,967 |
3 |
City's avg. per acre value |
$725,000 |
$72,500 |
$1,000,500 |
4 |
Whispering Hills sale of 0.95 acres to CUSD |
$1,015,789 |
$101,579 |
$1,401,790 |
We do not wish to spend more time trying to determine the most theoretically perfect price. The above table confirms our earlier analysis regarding the effect of subtracting the removal costs from the sale price.
Accordingly, if SDG&E and Whispering Hills agree to increase the sale price of the property by $961,228, for a total sale price of $1,249,195, we will approve the sale and allocate the sale proceeds $674,597.50 to ratepayers and $574,597.50 to shareholders, consistent with D.05-04-007.18 SDG&E and Whispering Hills shall file and serve a joint letter stating their agreement if they agree to the increased sale price.19
16 The original proposal (Line 1) used an assumption that easements reduced the value of the encumbered land by 50%. The revised proposal (Line 2) generally used an assumption that easements reduced the value of the encumbered land by 90%. Lines 3 and 4 calculate the impact of the easements by assuming that the easements cover 100% of the land, and that they reduce the value of the land by 90%. These are conservative simplifying assumptions that likely result in understating the "$ per acre w/ easement" values and the total price.
17 For Lines 3 and 4, the total price is calculated by multiplying the "$ per acre w/easements" value times 13.8 acres.
18 This assumes that there are no other significant changes to the proposed transaction that are adverse to SDG&E's ratepayers.
19 If SDG&E and Whispering Hills cannot agree to the increased price, either or both parties may file and serve a motion seeking an alternate resolution of this proceeding.
