Undergrounding

Utilities annually allocate funds under Rule 20 to communities, either cities or unincorporated areas of counties, to convert overhead electric and telecommunication facilities to underground electric facilities. The recipient communities may either bank (accumulate) their allotments, or borrow (mortgage) future undergrounding allocations for five years at most. If you need information on disaster relief protections for customers of affected areas during any state of emergency, please read our blog.

The Commission instituted the current undergrounding program in 1967. It consists of two parts. The first part, under Tariff Rules 15 and 16, requires new subdivisions (and those that were already undergrounded) to provide underground service for all new connections. The second part of the program governs both when and where a utility may remove overhead lines and replace them with new underground service, and who shall bear the cost of the conversion.

Instead of specifying a fixed allocation formula, Decision (D) 73078 adopted on September 19, 1967, required each utility to report annually and to propose an amount for its Rule 20 allocation. Utilities have submitted their Rule 20 allocation budgets to the CPUC each year by letter and set aside approximately two percent of their electric revenue for overhead conversions.  The total allocation then was divided among individual cities or counties based on a 50/50 allocation formula.  This formula requires half the allocation to be based on the ratio of the community’s overhead meters to total system overhead meters, and half based on the community’s total meters to total system meters.  

Then D.82-12-069 adopted in December 1982, ordered Pacific Gas and Electric (PG&E) to consult with the League of California Cities to determine PG&E’s future Rule 20A allocation budgets.  PG&E and the League agreed to use a “composite inflation and real growth factor” to determine annual Rule 20A allocation budgets.  PG&E would adjust annual allocation budgets based on the actual inflation for the period and adjusted growth factors.  These escalation factors have been ~5% to 6% until 2012, when PG&E began to reduce its annual allocations almost by half based on its 2011 General Rate Case (GRC) settlement. 

Tariff Rule 20 is the vehicle for the implementation of the underground conversion programs. Rule 20 provides three levels, A, B, and C, of progressively diminishing ratepayer funding for the projects. 

Under Rule 20, the Commission requires the utility to allocate a certain amount of money each year for conversion projects. Upon completion of an undergrounding project, the utility records its cost in its electric plant account for inclusion in its rate base. Then the Commission authorizes the utility to recover the cost from ratepayers until the project is fully depreciated. 

Rule 20 requires the utility to reallocate to communities having active undergrounding programs amounts initially allocated to others but not spent.  Cities also may mortgage 20A funds for five years. 

Because ratepayers contribute the bulk of the costs of Rule 20A programs through utility rates, the projects must be in the public interest by meeting one or more of the following criteria:                

  • Eliminate an unusually heavy concentration of overhead lines; 
  • Involve a street or road with a high volume of public traffic; 
  • Benefit a civic or public recreation area or area of unusual scenic interest; 
  • Be listed as an arterial street or major collector as defined in the Governor’s Office of Planning and Research (OPR) Guidelines. 

The determination of “general public interest” under these criteria is made by the local government, after holding public hearings, in consultation with the utilities.  


 

 California has approximately 25,526 miles of transmission lines, approximately 239,557 miles of distribution lines, in which approximately 152,000 miles of distribution lines are overhead.  Utilities convert less than 100 miles/year to underground.  Therefore, if our program remains at the current progress, it will take over a thousand years to convert our entire distribution system to underground. 

PG&E, SCE, and SDG&E serve approximately 11.4 million electric accounts.  Therefore, $126 million dollars’ worth of projects completed in 2012 implies each electric account would pay ~$11/year or $1/month. 

History of Undergrounding Program

  • 1967 –  Decision 73078 required tariffs for replacement of overhead to underground distribution facilities, annual allocation amounts for overhead conversions, and reports of conversion work completed for the preceding years.  Tariff Rule 20 was established for electric conversions and Rule 32 for telecommunication.
  • 1968 – Utility allocations (annual cost caps in each community) are set proportional to –
  • 1968 – the total number of electric meters;
  • 1982 –  only the number of overhead meters;
  • 1990  Present – both the total number of meters and the number of overhead meters.
  • 2000 – CPUC opened its Rulemaking R.00-01-005 to implement Assembly Bill 1149 regarding undergrounding of electric and telecommunication facilities.
  • 2001 – The Commission issued Decision (D.) 01-12-009 in Phase I of the OIR directing expanded use of Rule 20 funds and listing issues for Phase 2
  • 2002 – The Commission issued D.02-11-019 to signal consideration of a new rulemaking to address Phase 2 issues.
  • 2002 – The Commission in Resolution E-3788 approved franchise fee surcharges within the City of San Diego for electric conversions not eligible for Rules 20.
  • 2003 – Commissioner Kennedy assigned at expiration of Commissioner Duque’s term.
  • 2005 D.05-04-038 closed OIR 00-01-005.  D.01-12-009 remains effective until a new proceeding is opened consistent with the Commission’s resources and priorities.
  • 2006 D.06-12-039 authorized AT&T to impose a special surcharge to customers in the City of San Diego for a limited time duration to recover undergrounding cost as a result of the City of San Diego Underground Utilities Procedural Ordinance.
  • 2014 –  D.14-01-002 added Rule 20D to facilitate undergrounding in high fire zone areas of San Diego Gas & Electric Company.
  • 2017 - The Commission opened its current Rulemaking R.17-05-010 to consider changes to Electric Tariff Rule 20 in order to enhance the fair, efficient allocation of reatepayer funds to communities for the undergrounding of electric infrastructure.
  • 2019 - The Commission concluded its audit of PG&E's Rule 20A program in compliance with D.18-03-022 from the PG&E 2017 General Rate Case Application (A.)15-09-001.

This PowerPoint Presentation on the Overhead to Underground Conversion Program provides more in-depth information on the program.  

PG&E, SCE, SDG&E, Liberty Utilities, and PacifiCorp websites have specific information related to the conversion program in their service territory.

Resources

R.17-05-010 Undergrounding Proceeding Docket  

This PowerPoint Presentation on the Overhead to Underground Conversion Program provides more in-depth information on the program.

PG&E, SCE, SDG&E, Liberty Utilities, and PacifiCorp websites have specific information related to the conversion program in their service territory.

Rule 20A Annual work Credit Allocation Reports (Years 1968 - 2018).  Lists the annual Rule 20A work credit allocations for each city and unincorporated county entity that may be used to pay for Rule 20A undergrounding projects.

Rule 20 Annual Completion Reports (Years 1967 - 2017) details the

Jan 2017: Program Review: California Overhead Conversion Program, Rule 20A for Years 2011-2015

This programs review evaluates how the undergrounding program is being administered by SCE, PG&E, and SDG&E; describes its history over the past five years; and identifies where there may be deficiences or potential liabilities associated with the current program administration and status.  Additionally, this review provides recommendations for how the CPUC should move forward to improve undergrounding program management and performance.

Contact Us

For undergrounding inquiries, please contact Jonathan Frost, Regulatory Analyst, at jonathan.frost@cpuc.ca.gov

For utility-specific undergrounding inquiries, please contact the relevant utility using the contact information found on the utility's undergrounding website.

  • PG&E
  • SCE
  • SDG&E does not have an undergrounding website at this time.

 


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