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HomeMy WebLinkAboutAGENDA REPORT 2023 0517 CCSA REG ITEM 10LCITY OF MOORPARK, CALIFORNIA City Council Meeting of May 17, 2023 ACTION CONSENSUS TO TAKE NO ACTION. BY A. Hurtado. L. Consider Approval of Memorandum of Understanding Between the City of Moorpark and County of Ventura Assigning Moorpark’s Uncommitted Rule 20A Work Credits to the County to Extend the Boundaries of the County’s Proposed Santa Rosa Valley Underground Utility District to Include the Santa Rosa Valley Technology Magnet School. Staff Recommendation: Approve a Memorandum of Understanding between the City of Moorpark and County of Ventura for Assigning Moorpark’s Uncommitted Rule 20A Work Credits to the County to extend the Boundaries of the County’s Proposed Santa Rosa Valley Underground Utility District to Include the Santa Rosa Valley Technology Magnet School and authorize the City Manager to execute the Memorandum of Understanding. (Staff: Troy Brown, City Manager) Item: 10.L. MOORPARK CITY COUNCIL AGENDA REPORT TO: Honorable City Council FROM: Troy Brown, City Manager DATE: 05/17/2023 Regular Meeting SUBJECT: Consider Approval of Memorandum of Understanding (MOU) Between the City of Moorpark and County of Ventura Assigning Moorpark’s Uncommitted Rule 20A Work Credits to the County to Extend the Boundaries of the County’s Proposed Santa Rosa Valley Underground Utility District to Include the Santa Rosa Valley Technology Magnet School SUMMARY The City of Moorpark has an available balance of $535,146 in credits through Southern California Edison’s (SCE) Rule 20A program. Rule 20A is an SCE program designed to assist localities with funding the undergrounding of overhead power facilities. Additional annual allocations to Rule 20A credits ceased in 2022 through authority granted by the California Public Utilities Commission (CPUC). If remaining credits are not expended in a timely manner, SCE has the authority to reallocate those credits to other projects anywhere within its service area. The County of Ventura seeks a partnership with the City to complete an undergrounding project on Santa Rosa Road, keeping the credits within the region. A Memorandum of Understanding (MOU) has been drafted and is before the City Council for its consideration to consummate the transferring of the City’s Rule 20A credits to Ventura County. BACKGROUND The CPUC provides a framework guiding the allocation of funds for local jurisdictions to address overhead utilities. CPUC Rule 20 sets policies and procedures for the conversion of overhead power lines and other equipment to underground facilities, a process called "undergrounding." The CPUC in creating the programs acknowledges and supports undergrounding because it provides substantial aesthetic benefits to local communities. A popular program that was previously granted to localities are Rule 20 programs. Item: 10.L. 605 Rule 20 is a tariff that governs the CPUC’s jurisdictional electric utilities. The CPUC jurisdictional telecommunication providers have their own tariffs governing undergrounding. The communications tariff rules generally set out the same criteria for undergrounding as do the electric tariff. In practice, the communications providers “follow the electric utility into the trench.” Cable television providers on the other hand do not have such a CPUC approved tariff. Cable television providers are also required to comply with the Underground Utility District and must remove overhead facilities according to the terms of their franchise or other agreements with the cities and counties in which they provide service. The rules established by the CPUC for electric utility companies are collectively known as Rule 20. These include Rules 20A, 20B, and 20C. Each category of Rule 20 addresses different funding mechanisms and qualifications for undergrounding existing overhead utility lines. Rules Description of Funding Rule 20A Conversion projects under this section are funded by all of SCE’s ratepayers throughout the service area using Rule 20A work credits but only for projects deemed to create a general public benefit by satisfying at least one qualifying criterion. Rule 20B Conversion projects under this section are funded partially by general ratepayers and partially by those requesting the underground conversion (property owners, municipalities, counties, developers, etc.). This program provides limited ratepayer subsidies for undergrounding utility lines in areas that do not qualify under Rule 20A, or in cases where there are not enough Rule 20A work credits to cover the costs of the project. Rule 20C Conversion projects under this section are funded almost entirely, minus net salvage value and depreciation, by those requesting the underground conversion. This program enables property owners to pay for the cost of undergrounding utility lines which do not qualify under Rule 20A or 20B. Source: CPUC Rule 20 Guidebook Rule 20A funding is authorized by the CPUC through the utility’s General Rate Case (GRC)1. These budget amounts are recovered from customers through electricity rates. The utility then allocates work credits to the cities and counties in its service area in which it provides electric service. SCE does so utilizing an allocation formula which generally tracks the ratio of electric meters (customers) in that jurisdiction to the total number of meters in its entire system. Therefore, larger cities and counties with more customers receive a greater annual allocation of work credits than smaller cities with fewer customers. Although Rule 20A uses the word “funds” to describe the “work credits”, they are not actual dollars. They are not deposited into bank accounts for each city and county, and they do not earn interest. Rather, in order to fund construction of a Rule 20A conversion 1 GRCs are proceedings used to address the costs of operating and maintaining the utility system and the allocation of those costs among customer classes. The GRC is how Southern California Edison gets funding for its operations. 606 project, SCE recovers costs through the General Rate Case process which authorizes SCE to collect revenues related to, among other things, adopted amounts for Rule 20A projects. SCE is only authorized to allocate these revenues to Rule 20A projects. The costs of the credits are recovered through customer rates over the life of the assets installed. When allocated work credits are “unspent” in any year, the work credits roll over to the next year to create an available work credit balance. Local governments may accrue allocations until they have enough to pay for a project. DISCUSSION On June 3, 2021, the CPUC required SCE to discontinue allocating new Rule 20A work credits after December 31, 2022, and prioritized work for utilities to harden their infrastructure to mitigate wildland fires. SCE’s last allocation of work credits therefore ceased in 2022 and allocations to cities and counties were frozen as of January 2022. After SCE’s last annual allocation of work credits, cities and counties were able to continue to complete Rule 20A projects within their available credit balances. The CPUC Decision, in part, required SCE to notify the affected communities participating in its Rule 20A sub-program to provide them their Rule 20A status, i.e., whether they are considered “active” or “inactive”. The City of Moorpark was considered inactive on January 1, 2022, due to the insufficient funds being available to complete a specific undergrounding project and no active projects being underway. The most desired overhead facilities to be undergrounded for the City are on State Route 118 (Los Angeles Avenue) where the overhead lines primarily consist of 65kV distribution lines. Undergrounding of these facilities are substantially more expensive than transmission lines (which carry less than 64kV) that serve neighborhoods. Because no project could be initiated, approximately 15% of the City’s work credits were re-allocated to assist communities with active Rule 20A projects underway. Below is 2022 Allocation Balance, after the reallocation transfer was completed. 2022 Work Credit Balance $628,664 Reallocated Amount $(93,518) New 2022 Work Credit Balance *$535,146 *As of April 2, 2023 If the City’s remaining Rule 20A credits are not spent, SCE will continue to reallocate the City’s credits to other locations within their service area. In an effort to attempt to identify potential projects the credits could be expended on, City staff reviewed the existing City of Moorpark Capital Improvement Plan for projects where the funds could be applied. Staff found no such projects as “shovel ready” or near design completion to commence. Additionally, staff contacted SCE to determine if there were projects in Moorpark where the credits could be applied to mitigate the impacts of Public Safety Power Shutoff (PSPS) events. For example, the Morganstein circuit is one of the more notorious circuits subject 607 to PSPS de-energization. The mitigation SCE strives to achieve during de-energization of Morganstein is to prevent wildfires in the Santa Rosa Valley area. However, because of the design of the Morganstein circuit, residents, businesses and traffic signals along Tierra Rejada Road from (from Los Angeles Avenue to the eastern city limits) are impacted. The thought was the City could partner with SCE in installing “switches” to reroute power to the community, while de-energizing more vulnerable portions of the circuit. Unfortunately, the use of Rule 20A credits for PSPS are prohibited per the Rule 20 program parameters. In February 2023, the County of Ventura approached the City seeking a partnership on an undergrounding project on Santa Rosa Road in the unincorporated area of Santa Rosa Valley. The limits of the project will commence at the southwesterly corner of Santa Rosa Road and Moorpark Road, extending westerly along the southerly side of Santa Rosa Road to the easterly property line of Santa Rosa Technology Magnet School in the unincorporated area east of the City of Camarillo. SCE has verified that the County’s Project qualifies as a Rule 20A project and has confirmed that the County has sufficient Rule 20A work credit allocations to cover the projected cost of the conversion. The County has approximately $885,000 in unused Rule 20A work credits that it would like to use to extend the Project boundaries to include the Santa Rosa Technology Magnet School campus. SCE has estimated that the Project Extension will require $1,385,000 in Rule 20A work credits. Rather than having the City’s Rule 20A funds reallocated outside of our region, staff recommends partnering with Ventura County to keep the credits, work and positive impacts local to the Moorpark region. An MOU outlining the terms of the transfer of the City’s Rule 20A credits is attached and if approved facilitates the transfer process. ENVIRONMENTAL DETERMINATION This action is exempt from the California Environmental Quality Act (CEQA) as it does not constitute a project, as defined by Section 15378 of the State CEQA Guidelines. Therefore, no environmental review is required. FISCAL IMPACT There is no fiscal impact associated with this action because Rule 20A funds are not actual dollars. However, allowing Ventura County to use these credits will result in the City relinquishing $535,146 in credits for projects in the City. No eligible projects have been identified therefore the City is at-risk for these credits being reallocated outside of the region. COUNCIL GOAL COMPLIANCE This action does not support a current strategic directive. 608 STAFF RECOMMENDATION Approve a MOU between the City of Moorpark and County of Ventura for Assigning Moorpark’s Uncommitted Rule 20A Work Credits to the County to extend the Boundaries of the County’s Proposed Santa Rosa Valley Underground Utility District to include the Santa Rosa Valley Technology Magnet School and authorize the City Manager to execute the MOU. Attachment 1: MOU between the City of Moorpark and County of Ventura Attachment 2: City of Moorpark 2023 Rule 20A Work Credit Balance, dated April 3, 2023 Attachment 3: City of Moorpark 2023 Rule 20A Work Credit Balance, dated May 12, 2022 609 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF MOORPARK (“MOORPARK”) AND COUNTY OF VENTURA (“COUNTY”) FOR ASSIGNING MOORPARK’S UNCOMMITTED RULE 20A WORK CREDITS TO COUNTY TO EXTEND THE BOUNDARIES OF COUNTY’S PROPOSED SANTA ROSA VALLEY UNDERGROUND UTILITY DISTRICT TO INCLUDE THE SANTA ROSA VALLEY TECHNOLOGY MAGNET SCHOOL The City of Moorpark (“Moorpark”) and the County of Ventura (“County”) enter into this Memorandum of Understanding (“MOU”), effective the last date signed below (“Effective Date”). County and Moorpark may be referred to jointly as the “Parties.” RECITALS WHEREAS, County has a proposed Rule 20A overhead-to-underground utility conversion project (“Project”), the limits of which commence at the southwesterly corner of Santa Rosa Road and Moorpark Road and extends westerly along the southerly side of Santa Rosa Road to the easterly property line of Santa Rosa Technology Magnet School, whose address is 13282 Santa Rosa Road, in the unincorporated area east of the city of Camarillo; WHEREAS, Southern California Edison (SCE) has verified that County’s Project qualifies as a Rule 20A project and has confirmed that County has sufficient Rule 20A work credit allocations to cover the projected cost of the conversion; WHEREAS, County will have approximately $885,000 in unused Rule 20A work credits that it would like to use to extend the Project boundaries to include the Santa Rosa Technology Magnet School campus (Project Extension); however, Southern California Edison has estimated that the Project Extension will require $1,385,000 in Rule 20A work credits; WHEREAS, the Moorpark has $535,146 in uncommitted Rule 20A work credits; an insufficient amount for an overhead-to-underground utility conversion project in Moorpark; WHEREAS, the California Public Utilities Commission is phasing out the Rule 20A program and no further Rule 20A credits will be credited to cities and counties, including Moorpark and County; WHEREAS, SCE may reallocate uncommitted work credits to other overhead-to-underground utility conversion projects anywhere in its service area, including to cities or counties outside of Ventura County, without the consent of the city or county having the uncommitted work credits; WHEREAS, cities and counties with uncommitted work credits may transfer said uncommitted work credits to other cities within its county, or to a county, if the city or county to which the uncommitted work credits are proposed for transfer has a qualified Rule 20A project; and WHEREAS, Moorpark and County desire that their remaining Rule 20A work credits remain in Ventura County to benefit the citizens of Ventura County. NOW, THEREFORE, in consideration of the mutual promises contained in this MOU, the Parties agree as follows: 610 AGREEMENT 1.Recitals. The foregoing recitals are hereby incorporated by this reference and made a part hereof. 2.Project Extension. Moorpark and County agree to use their respective uncommitted work credits to expand the boundaries of the County’s Project area to include the Santa Rosa Technology Magnet School in the Project Extension area to serve both the residents of the unincorporated area of Santa Rosa Valley and the residents of Moorpark whose children attend the school. 3.Notice to Southern California Edison. A copy of this MOU shall be provided to SCE together with any documents that SCE may require Moorpark to complete and file with SCE to transfer its uncommitted Rule 20A work credits to County to expand the Project to include the Project Extension. 4.County Underground Utility District. County will work diligently to form an underground utility district to include the Project and Project Extension areas. 5.Defense and Indemnity. County agrees to indemnify, hold harmless and defend at its sole expense, with counsel reasonably acceptable to City, any claims, actions, proceedings, demands, judgments, damages, fines and liabilities of whatever nature (Claims and Liabilities) against City and all of City’s officers, employees and agents (City Parties) arising from or related to this MOU including but not limited to the use of Rule 20A work credit allocations for the Project and the construction of the Project, unless the Claims and Liabilities be caused by the sole negligence or willful misconduct of City Parties. City may, at its sole discretion, participate in the defense of any Claims and Liabilities at County’s cost, but such participation shall not relieve County of its obligations under this section. 6.Entire Agreement of the Parties. This MOU constitutes the entire agreement between the Parties regarding the subject matter hereof whether contained within this MOU or by reference and can only be amended or modified in writing with the mutual written consent of the Parties. 7.Governing Law; Venue. This MOU is made and entered into in the state of California and shall, in all respects, be governed by and interpreted in accordance with the laws of the state of California applicable to contracts entered into and to be fully performed therein. The venue for any action, suit, arbitration, judicial reference or other proceeding concerning the MOU shall be in Ventura County, California. IN WITNESS THEREOF, this MOU has been executed by the Parties as of the date herein: COUNTY OF VENTURA By: ___________________________________ Name: ___________________________________ Its: ___________________________________ Date ________________ 611 CITY OF MOORPARK: By: ___________________________________ Name: ___________________________________ Its: ___________________________________ Date ________________ 612 Elias Bermudez Project Manager New Development Project Management, Rule 20 E-mail: Elias.Bermudez@sce.com April 3, 2023 City of Moorpark Troy Brown City Manager 799 Moorpark Ave. Moorpark, CA 93021 SUBJECT: City of Moorpark 2023 Rule 20A Work Credit Balance Dear Troy Brown: Southern California Edison (SCE) has filed with the California Public Utilities Commission (CPUC) its annual report of SCE’s 2023 budget for capital spending under Tariff Rule 20A, Replacement of Overhead with Underground Electric Facilities. For calendar year 2023, the budget is $ 12,012,298. On June 3, 2021, the California Public Utility Commission (CPUC) issued a Decision that revises the CPUC’s Electric Rule 20 program. The Decision discontinues the authorization of new Electric Rule 20A work credit allocations. As such, there are no work credits being allocated for 2023. As of this writing, the city of Moorpark’s work credit balance is $535,146. Additionally, Moorpark currently has an Inactive status as of January 1, 2023. SCE’s Rule 20 Annual Report (public version) can be found at: https://www.sce.com/regulatory/distribution-manuals/rule20-underground-conversions Please feel free to contact me if you have any questions about Rule 20A or any other matters affecting SCE’s service to you. Regards, Elias Bermudez New Development Project Management, Rule 20 Program cc: Elias Bermudez, Senior Manager, New Development Planning Andrew Thomas, Government Relations Manager Talisa Lee, Business Advisor, Rule 20, New Development Planning ATTACHMENT 2 613 E-mail: Elias.Bermudez@sce.com May 12, 2022 City of Moorpark Troy Brown City Manager 799 Moorpark Ave. Moorpark, CA 93021 SUBJECT: City of Moorpark 2022 Rule 20A Work Credit Balance Dear Troy Brown: Southern California Edison (SCE) has filed with the California Public Utilities Commission (CPUC) its annual report of SCE’s 2022 budget for capital spending under Tariff Rule 20A, Replacement of Overhead with Underground Electric Facilities. For calendar year 2022, the budget is $ 12,630,395. Pursuant to the formula set out in Tariff Rule 20A, the portion of this amount allocated to the City of Moorpark is 7,804. Under the tariff, allocated work credits not committed to a qualifying project in a given year are carried over to the next year. As of this writing, the City of Moorpark work credit balance is $628,664. Additionally, 2022 is the last year annual work credits will be allotted. On June 3, 2021, the California Public Utility Commission (CPUC) issued a Decision that revises the CPUC’s Electric Rule 20 program (Decision). The Decision, in part, required SCE to notify the communities participating in its Rule 20A sub-program to provide them their Rule 20A status, i.e., whether they are considered “active” or “inactive,”. The City of Moorpark was considered Inactive on January 1, 2022. As such approximately 15% of the city/county’s work credits have been re-allocated to assist communities with active Rule 20A project underway. Below is your 2022 Allocation Balance, after the reallocation transfer was completed. 2022 Work Credit Balance $ 628,664 Reallocated Amount $ (93,518) New 2022 Work Credit Balance $ 535,146 Please feel free to contact me, if you have any questions about Rule 20A or any other matters affecting SCE’s service to you. Regards, Elias Bermudez New Development Senior Manager, Rule 20 Program cc: Elias Bermudez, Senior Manager, New Development Planning Andrew Thomas, Government Affairs Manager Talisa Lee, Business Advisor, Rule 20, New Development Planning ATTACHMENT 3 Elias Bermudez Senior Manager, New Development Project Management Rule 20 614