BILL ANALYSIS �
AB 2235
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Date of Hearing: April 23, 2012
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 2235 (Hagman) - As Introduced: February 24, 2012
SUBJECT : Public Utilities: Compensation for Property
Devaluation
SUMMARY : Authorizes a property owner to seek compensation for
any substantial reduction in property value proximately
resulting from the building, expansion, or operation of a plant,
line, pipeline, or other facility by a public utility.
Specifies that the evidentiary rules and rules of civil
procedures applicable to inverse condemnation actions would
apply to such an action.
EXISTING LAW :
1)States the California Renewables Portfolio Standard (RPS)
program requires investor owned utilities, local publically
owned utilities and energy service providers to increase
purchases of renewable energy such that at least 33% of retail
sales are procured from a renewable energy source by December
31, 2020.
2)States private property may be taken (eminent domain) for a
public use when there has been just compensation the owner.
3)Stipulates an electrical corporation may condemn any property
necessary for the construction and maintenance of its electric
plant.
4)Requires a public utility acquiring real property by eminent
domain shall provide relocation advisory assistance and shall
make any of the payments required of public entities.
5)States a tentative and final map shall be required for all
subdivisions creating five or more parcels, five or more
condominiums, a community apartment project containing five or
more parcels, or for the conversion of a dwelling to a stock
cooperative containing five or more dwelling units.
6)Requires any public streets or public easements to be left in
effect after the subdivision shall be adequately delineated on
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the map.
7)Stipulates each parcel shall be numbered or lettered and each
block may be numbered or lettered. Each street shall be named
or otherwise designated. The subdivision number shall be shown
together with the description of the real property being
subdivided.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, "when public utilities act
as bad neighbors in a community, citizens should have the
ability to seek redress."
1)Background : California has a history of protecting the
environment and striving for clean
water, air and land. In the energy arena, this preference
resulted in the California Renewables Portfolio Standard (RPS)
Program, SB 1078 (Sher), Chapter 516, Statutes of 2002, which
set the 20% by 2017 goal. So much progress was made towards the
goal that it was accelerated four years later by SB 107
(Simitian), Chapter 464, Statutes of 2006, moving the 20%
deadline to 2010.
In April 2012, the California Legislature expanded and refined
the RPS in SB 2 X1 (Simitian) Chapter 1, Statutes of 2011-12
First Extraordinary Session, which recasts the State's annual
renewable energy goal from 20% to 33%. These accelerations of
the goal have been realistic and possible in part due to rapid
expansion of solar, wind, geothermal and in-state biomass.
California is rich with many natural resources that can be used
or converted into energy; sun and land for solar, rivers and
waterways for hydroelectric power, sites for geothermal
generation, topography that is conducive to wind generation and
feeder materials for biomass facilities. Thus, California
consists of 163,695.57 miles and many of these natural resources
are not located near energy demand centers.
At the base of the Tehachapi Mountains is a remote renewable
site that will be developed as a "wind farm" in Kern County
known as the "Tehachapi Wind Resource Area." In order to link
this energy to the grid, Southern California Edison (SCE) has
been ordered by the California Public Utilities Commission (PUC)
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to build new transmission lines to these proposed wind farms so
that wind power can be delivered into the state's energy grid.
The Tehachapi Renewable Transmission Project (TRTP), would
interconnect renewable wind energy to the existing electric
system, would move this energy and help meet the state's RPS
goal. In addition to the wind farms, upgrades to the grid are
needed to serve the growing Southern California demand for
electricity.
2)City of Chino Hills: The utility easements that affect the
City of Chino Hills contain the
following language granting to SCE "those permanent and
exclusive easements and rights of way to construct, reconstruct,
maintain, operate, enlarge, improve, remove, repair and review
an electric transmission line . . . ."
The 11 utility easements for the right-of-way (ROW) in the Chino
Hills area were established in the 1940s while this area of San
Bernardino County was unincorporated. Due to its rolling hills,
Chino Hills was primarily rural prior to the mid-1970s. Housing
construction began in this area on both sides of the
transmission corridor in the early 1970s and continued to the
1990s. In general, the development pattern was: East of Payton
Drive: 1970's and 1980's; West of Payton Drive to the LA County
line: early and late 1990's. The tower height in Chino Hills
prior to the approval of the TRTP was 73 to 102 feet. The new
project towers range from 150 to 198 feet.
3)TRTP controversy: In December 2099, the PUC approved the 11
segment TRTP which is
projected to provide access for up to 4,500 MW of renewable
energy generation, primarily wind from the Tehachapi Wind
Resource Area in Kern County, and to deliver it Los Angeles and
San Bernardino counties. The piece known as Segment 8 was to
utilize an existing easement that SCE had near the City of Chino
Hills.
During the PUC proceeding where SCE sought the Certificate of
Public Convenience and Necessity (CPCN) in order to build the
TRTP, SCE suggested that this right-of-way was a preferred route
as it already had transmission towers installed but the wires
were un-energized. The City of Chino Hills suggested an
alternative route where there was no existing ROW and would
traverse through a State Park.
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In its decision (D.09-12-044) granting the CPCN for TRTP
Segments 4-11, the PUC listed, in part, in its Conclusion of Law
that:
The community values of an individual community should not
outweigh statewide values, including the RPS program.
Balancing the factors, the Commission should select the
Environmentally Superior Alternative.
The public interest and necessity require the Tehachapi
Renewable Transmission Project (Segments 4-11).
The Tehachapi Renewable Transmission Project (Segments 4-11)
is planned or located in a manner that will be most compatible
with the greatest public good and the least private injury.
The City of Chino Hills was unsatisfied with this outcome and
therefore continues to fight the construction of the larger
power poles at the PUC and in the courts. As a result of the
strong opposition from the City of Chino Hills the PUC ordered a
stay (D.11-11-020) in December 2011 in place for Segment 8A of
TRTP that traverses Chino Hills, California. The reason for the
stay in construction was in response to an Application for
Rehearing and Motion for Partial Stay filed by the City of Chino
Hills regarding the PUC's 2009 decision (D.09-12-044) approving
Segments 4 through 11 of the TRTP. The PUC determined that it
was appropriate to stay its decision in order to preserve the
status quo pending resolution of Chino Hills' Application for
Rehearing.
1)Eminent Domain : The concept of eminent domain is fundamental
and important to the public
that is contained in the California Constitution, ARTICLE 1, in
the Declaration of Rights" section. It prohibits a government
entity from taking the property of a private citizen without
adequate compensation.
The Legislature has also added many code sections to protect
private citizens in specific circumstances. One of these is
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that a title to a piece of property must contain liens,
easements and notice of disputes so that an owner knows what he
or she has and a potential buyer knows what he or she is paying
for.
The PUC decision to use the existing ROW in Chino Hills does not
invoke eminent domain as property was not taken from the
landowner.
2)Compensation for Drops in Property Values : This bill would
permit property owners to seek
compensation for any substantial reduction in the value of the
property proximately resulting from the building, expansion, or
operation of a plant, line, pipeline, or other facility by a
public utility.
However, the bill is silent a number of issues such as: how to
determine what would be proper compensation; what venue would
have jurisdiction over this decision; what consumer protections
and transparency would be in place; who would pay the
compensation; and what constitutes a "substantial reduction".
While this bill is not proposed to be a legislative fix for the
TRTP project in Chino Hills, it does appear to be one of the
impetuses for the bill. The residents in the affected homes in
Chino Hills purchased these properties with an existing utility
easement.
In addition to the questions on the intent and the completeness
of this bill, the author and this committee may wish to consider
adding language that would specifically prohibit any property
owner from taking under this new section if in fact the person
purchased property that contained a utility easement or was
adjacent to an existing or proposed utility easement .
REGISTERED SUPPORT / OPPOSITION :
Support
Chino Hills, California Residents, 20 letters
Opposition
California Public Utilities Commission (CPUC)
Division of Ratepayer Advocates (DRA)
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Southern California Edison (SCE)
Verizon
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083