The California Public Utilities Commission will decide whether Verizon is improperly shifting costs to California cities by refusing to pay its share of expenses related to the installation of underground service facilities. The proposed decision issued in City of Santa Barbara v. Verizon California, Inc. was included on the Commission’s Aug. 13 agenda, but was placed on the hold list — meaning that it is likely that the CPUC will not consider the proposed decision until Aug. 27.
Regulated electric and telecommunication utilities are required to set aside ratepayer money to fund the undergrounding of aerial electric and communications facilities. This is accomplished through Rule 20 for electric utilities and Rule 40 for communications utilities, such as Verizon. If a municipality forms an undergrounding district, holds hearings and makes certain findings, it can ask utilities to use their Rule 20/40 money to fund underground and overhead facilities.
Usually the various utilities each pay a proportionate share to underground aerial facilities. But, over the past five to 10 years, Verizon refused to pay its fair share contribution of the cost to underground up to 100 feet from the public right of way (over private property) to the customer connection, contending that it is not required to do so under Rule 40. Electric utilities have typically interpreted their Rule 20 to require them to pay for this expense.
In the Santa Barbara proposed decision, the Commission made clear that, under Rule 40, the telecom must bear its share of responsibility for the costs of private property trenching, as well as the costs associated with installing conduit and cables. The proposed decision also states that Verizon shall reimburse Santa Barbara for costs the City has already expended on Verizon’s behalf.
If the July 2 proposed decision stands, as expected, it will give California cities and utilities guidance on how costs related to undergrounding aerial facilities are divvied up between a city, electric utilities and telecom providers.
We will provide an update when a final decision is issued.
