ALJ/CAB/avs DRAFT CA-3

11/8/2001

Decision DRAFT DECISION OF ALJ BROWN (Mailed 10/4/01)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking Into Implementation of Assembly Bill 1149, Regarding Underground Electric and Communications Facilities.

Rulemaking 00-01-005 (Filed January 6, 2000)

TABLE OF CONTENTS

Title Page

I. Summary 2

II. Background 3

III. Tariff Rules Governing the Conversion of Overhead
Lines to Underground Lines 3

IV. Procedural History 6

A. Workshops 7

B. Public Participation Hearings 7

C. Letter to the Legislature in Lieu of a Report 10

V. Positions of the Parties 10

A. Comment on the Changing of Parties' Positions 10

B. Municipalities 11

C. Utilities 14

D. Consumer Advocacy Groups 15

E. Telecommunications 17

F. Others 17

VI. Discussion 18

A. Commission Recommendations 19

1. Limited Expansion of the Definition of the Public Interest: 19

2a.Increased Leverage of 20A and 20B Funds: 20

2b.Allow Cities to Mortgage Rule 20A
Allocations For Up to Five Years 20

3. Improve Communication on the Status
of Undergrounding Projects: 20

4. Improve the Collection of Cost
Data Through Standardized Reporting: 21

5. Improve Coordination Among the Utilities,
the CPUC, Municipalities and the Residents Through
an Updated Undergrounding Planning Guide 22

B. Issues for Phase 2 22

VII. Public Review and Comment 23

Findings of Fact 23

Conclusions of Law 24

ATTACHMENT A

ATTACHMENT B

ATTACHMENT C

INTERIM OPINION REVISING THE RULES FOR
CONVERTING OVERHEAD LINES TO UNDERGROUND

I. Summary

This Decision revises the rules governing the State's program to convert overhead electric and communications lines to underground. In brief, this order expands Rule 20A criteria; extends the use of rule 20A funds; allows cities to mortgage 20A funds for five years; requires standardized reporting from the utilities; improves communication between utilities and residents; and orders the creation of an up-dated Undergrounding Planning Guide.

This decision also identifies issues for a Phase 2 proceeding. In Phase 2, we will address issues that we were unable to fully cover in Phase 1 without hearings. Some issues we will explore in Phase 2 are: 1) whether or not to establish standards for conversion projects so third parties can competitively bid on projects with no compromise of quality, safety, or reliability; 2) whether incentive mechanisms are an effective cost management tool; 3) whether there should be a "breakpoint"¹ in allowing new overhead pole and line installations; or whether the current exemption process is working; 4) whether there are benefits to listing the charges for undergrounding as a line item on utility bills; 5) whether there is a fair and equitable, competitively neutral recovery mechanism for telecommunications carriers to recover their undergrounding costs.