1. Pasadena Water and Power Final Projects for Completion of Underground Utility Program City Council March 14, 2016 Item 16

2. Pasadena Water and Power Recommendation CEQA Exemption – Not a Project Discontinue the Underground Utility Program After Completion of Districts Under Construction: Hill Avenue Alpine Street Discontinue Surtax Collections Additional Recommendations within Six Months:  Permanent repeal or repurposing of the Surtax  Disposition of any remaining Surtax funds 2

3. Pasadena Water and Power Management Partners’ Recommendations 12.Review the Goal of the UUP to Determine the Extent of Undergrounding Desired 13.Determine If and When the Surtax Should Be Discontinued 3

4. Pasadena Water and Power UUP Program Established in 1968 Under PMC 13.14 City Council calls for public hearings to establish underground utility districts based on:  Public necessity  Health  Safety or welfare The UUP was expected to result in:  Increased electric service reliability  Lower operating costs  Beautification of the City 4

5. Pasadena Water and Power UUP Street Categories CategoryTypeTotal Length IArterial Roads Collector Roads 126 Miles 75 Mile Completed 51 Miles Remain IIResidential Rear Property Easements Alleys 94 Miles Total220 Miles 5

6. Pasadena Water and Power Circuits Identified in UUP Total Electrical Distribution System  ~1,658 circuit miles  ~1,042 miles (63%) underground 6

7. Pasadena Water and Power UUP Experience Electric Reliability Tradeoffs Higher Costs: Construction, Repair, Replacement Construction Challenges, Delays  Underground conditions, structures, trees  Coordination with other utilities  Customer cooperation and costs Increasing Costs, Budget Overruns Substantial Resource Burden 7

8. Pasadena Water and Power Established Districts District Length (mi) Est Cost ($M) Cost per Mile ($M/mi) Cost Per Property ($) Hill Avenue1.42$10.77.551,700 Alpine Street0.6$5.158.695,400 Mountain Street0.6$9.015.0155,200 N Raymond2.0$2412.097,200 Total4.62$48.8510.686,300 8

9. Pasadena Water and Power Time and Cost to Complete 9 UUP StreetsTime and Cost to Complete Recommended Category I 2 miles  3 Years Construction  $16 million Total  ~$10 million already incurred  No additional Surtax collection All Category I 51 miles  100 years Surtax collection  25-50 Years Construction  $600-700 million Category II 94 miles  300+ years Surtax collection  Additional 50-100 Years Construction  75-125 years from now  $2 billion Total

10. Pasadena Water and Power Annual O&M Costs $400 per mile for overhead circuits $1,300 per mile for underground circuits  Vault replacement a major driver 10

11. Pasadena Water and Power Reliability - Outages 11 Underground circuits have fewer but longer outages

12. Pasadena Water and Power Surtax Funding Surtax on electrical charges per PMC 4.24 Rates updated in General Fee Schedule:  First $1,000 of monthly bill 4.34%  Next $4,000 of monthly bill3.70%  Next $20,000 of monthly bill2.47%  Over $25,000 of monthly bill 1.21% $5-6 million annual revenue ~$44/year for typical 500 kWh customer 12

13. Pasadena Water and Power Alternatives AltActionImplications 1Discontinue Surtax Terminate UUP upon completion of Hill Avenue and Alpine Street  Majority of current UG fund balance available for repurpose or refund  Reduce expense and staff resources needed to transfer UUP to PWP  Work completed by late 2018 2Discontinue Surtax Terminate UUP upon completion of Hill Avenue, Alpine Street, and Mountain Street  3 of 4 established UG districts would be completed  A portion of UG Fund would remain for refund or repurposing at a later date  Work completed by late 2020 3Complete all four established districts, including N. Raymond Then Terminate UUP  Surtax terminated within 2 years when sufficient funds are collected  All existing underground districts would be completed by late 2023 13

14. Pasadena Water and Power “No Action” Alternatives AltActionImplications 4Continue UUP Complete Category I streets No City Council action required at this time  51 miles of Category I streets  Surtax collection would continue for approximately 100 years  Work completed in 25-50 years 3Continue UUP Complete Category II streets No City Council action required at this time  51 miles of Category I and 94 miles of Category II streets  Surtax collection would continue for 300+ years  Work completed 75-125 years from now 14

15. Pasadena Water and Power Ongoing Undergrounding Utility-Driven Projects  Reliability improvements  Short distances  Cable and telephone wires remain in place  Poles not removed Customer-Requested  Individual property electrical service  Underground connection to nearest pole/vault  Costs borne by customer 15

16. Pasadena Water and Power 16

17. Pasadena Water and Power Category I Streets - Overall 17 Mountain & Raymond

18. Pasadena Water and Power Underground Completed 18