2. Background and Summary of Request

SCE acquired a portion of the site from the Edison Security Companies in 1952 and the remainder of the site from Associated Southern Investment in 1972. The book value of the site is $34,398. The site is not now used for any secondary land use purpose.

SCE is offering RHC a lease for the secondary use of the property. Under the terms of a proposed lease, attached to the application, operation of a self-storage facility is compatible with SCE's operation of transmission and distribution lines located on the property. SCE states that utility service will not be affected as a result of the lease, and the lease will generate Other Operating Revenue (OOR) for the benefit of ratepayers. The term of the lease is 65 years, beginning on the date RHC exercises its option to enter into the lease. Under the lease, the site will generate base rent of $23,000 in Year 1; $80,000 in Year 2; $170,000 in Year 3, and $262,000 in Year 4. After Year 4, the base rent will increase annually by a percentage increase based on the Consumer Price Index, subject to a maximum annual increase of 3%. In each year of the lease term, RHC will pay as additional rent the amount by which 20% of its annual gross revenue exceeds the annual base rent.

According to environmental documents submitted with the application, RHC intends to construct 14 detached self-storage buildings totaling 128,964 square feet and an office building totaling 2,500 square feet. The lease agreement provides that RHC's activities must not interfere with the operation of the electric facilities that cross the site. RHC is not allowed to use or store hazardous substances, explosives or flammable materials on the site. RHC is required to maintain a minimum clearance between its equipment and overhead electrical conduits of 18 feet, and RHC must maintain a minimum 50-foot radius around all tower legs and a 10-foot radius around steel poles. Additionally, RHC must provide and maintain access roads on the site. The lessee will be responsible for obtaining all permits and approvals for construction, as well as any zoning changes or use permits required for the operation of a self-storage facility.

Under the lease, RHC will be responsible for all personal property taxes and fees levied against the property and improvements, and it will maintain comprehensive liability insurance, auto insurance and workers' compensation insurance. The company will indemnify SCE against all liability for damages or injury to persons or property not caused by SCE's negligent or willful misconduct.