III. Background

The Site is approximately 5.8 acres and is located on a portion of the Barre-Villa Park 220 kV ROW located in the City of Anaheim. The current use of the Site for operation of a vehicle and boat parking and storage facility by Katella is consistent with its primary use as a ROW for above-ground 220 kV transmission lines. SCE acquired this land from Southern Pacific Company and Pacific Electric Railway Company in August of 1961.² On October 1, 1993, the Site was licensed to Dennis E. Proud and Cuong Doan for horticulture purposes. The license agreement with Proud and Doan expired on May 31, 1999. The annual income stream from the Proud and Doan license ranged from $7,025 in 1993 to $7,770 in 1999. The existing license with Katella Properties currently generates a base revenue of $15,000 in Year 1; $22,500 in Year 2; $40,000 in Year 3; $64,200 in Year 4; $65,500 in Year 5; $66,750 in Year 6; $68,000 in Year 7; $69,500 in Year 8; $70,750 in Year 9; and $72,250 in Year 10, whereupon the property will be appraised to determine the base rental value for subsequent years. All of the revenue from the Katella license and proposed lease will be treated as OOR, under the rules of the gross revenue sharing mechanism.