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RESOLUTION NO. 8591 (1996 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
AUTHORIZING ACQUISITION OF STREET LIGHTING FACILITIES
BE IT RESOLVED by the Council of the City of San Luis Obispo as follows::
SECTION 1. The appraisal report of R.W. Beck, Inc. dated September 1996, concerning the
value of the street lighting facilities of the Pacific Gas & Electric Company located within the
territorial boundaries of the City of San Luis Obispo is approved, a true copy of that report being
attached as Exhibit `A' and incorporated and made a part of this resolution.
SECTION 2. The sum of $157,165 is established by the City of San Luis Obispo as the
amount which it believes to be just compensation for acquisition of the street lighting facilities
of the Pacific Gas & Electric Company as described and so valued in the appraisal report.
SECTION 3. The City Administrative Officer is authorized and directed to offer to the
Pacific Gas & Electric Company the sum of $157,165 for acquisition and transfer of ownership
of the street lighting facilities to the City of San Luis Obispo.
Upon motion of Council Member Romero second by Vice Mayor Williams
and on the following roll call vote:
AYES: Council Members Romero, Williams, Roalman, Smith and Mayor Settle
NOES: None
ABSENT: None
the foregoing resolution was adopted this
ATTESTED:
�� /
APPROVED:
F-MIN KA " 0 wr
lm
22nd day of October
Mayor Allen K. Settle
1996.
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APPRAISAL REPORT
APPRAISAL OF STREETLIGHT FACILITIES TO BE ACQUIRED
FROM PACIFIC GAS AND ELECTRIC COMPANY
BY THE CITY OF SAN LUIS OBISPO, CALIFORNIA
INTRODUCTION
R. W. Beck, Inc., was retained by the City of San Luis Obispo, California (the City)
to conduct an appraisal of Pacific Gas and Electric Company's (PG &E's) streetlight
facilities in the City to estimate the fair market value of the property. The City is
interested in acquiring these facilities from PG &E. Indicators of value were
developed based on the cost and income approaches to valuation. This report
presents the results of the appraisal study and our opinion of the estimated fair
marketvalue of the streetlight facilities.
DEFINITION OF FAIR MARKET VALUE_
Fair market value is defined in the California Code of Civil Procedure
(Section 1263.320) as follows:
"(a) The fair-market value of the property taken is the highest price
on the date of-valuation that would be agreed to by a seller, being
willing to sell but under no particular_ or urgent necessity for so
doing nor obliged to sell, and a buyer, being ready, willing, and
able to buy but under no particular necessity for so doing, each
dealing with the other with full knowledge of all the uses and pur-
poses for which the property is reasonably adaptable and available.
"(b) The fair market value of property taken for which there is no
relevant market is its value on the date of valuation as determined
by any method of valuation that is just and equitable."
VALUATION DATE
The fair market value of the streetlight facilities was estimated as of. August 1,
1996.
DESCRIPTION OF THE PROPERTY
The property to be acquired consists of all PG &E -owned streetlights in the City
that are presently billed under the LS -1 rate schedule 1 In response to a data
I PG &E's streetlight tariff is comprised of two major rate schedules. Schedule LS-1 applies to PG&E -
owned streetlights, while Schedule LS-2 applies to customer -owned streetlights.
3977/11 -00213 -101 C1 -0101
APPRAISAL REPORT
request submitted by the City, PG &E provided a detailed inventory dated August
1996 showing the type, quantity, and age of the streetlight facilities owned by
PG &E in the City. PG &E also provided a summary of the number of streetlights
by rate schedule, type, and lamp size.
Within the LS -1 rate schedule there are various rates (LS -1A through LS -1F) for
different classes of service which take into account differences in plant facilities
and whether the plant was contributed by the customer. Table 1 is a breakdown
of the streetlights that would be acquired by the City by lamp size and rate
schedule. All of the lights are high pressure sodium vapor (HPSV) lights.
Approximately 75 percent of the lights to be acquired are 70 -watt lamps.
Table 1
Summary of Streetlights to be Acquired
by Lamp Size and by Rate Schedule
Rate
Schedule
70 Watt
100 Watt
200 Watt
250 Watt
Watt
Total
LS -1A
553
60
141
1
.2
757
LS4C
270
32
74
0
1
377
LS -1D
41
0
0
0
0
41
LS =1E
453
8
104
0
0
565
LS -1F
88
5
15
1
0
109
Total
1,405
105
334
2
3
1,849
An inventory of the streetlight facilities that would be acquired by the City is
provided in Exhibit 1. R. W. Beck has not conducted a visual inspection of the
streetlight facilities. Therefore, we cannot comment on the physical or functional
condition of the system at this time. This study assumes that the streetlight
facilities are in average condition for plant of comparable type and age.
APPROACH
There are three . approaches to estimating the value of property: the income
approach, the cost approach, and the market approach. Indicators of value were
developed for the streetlight property based on the cost approach and income
approach. The market approach was not used. to estimate the value of the utility
property due to a lack of comparable sales. and relevant market. Following is a
discussion of the indicators of value developed as part of this appraisal.
3942171- 00213 - 20101 -0101 R. W. Beck Page 2
COST APPROACH
APPRAISAL REPORT
Uncles the cost approach; the value of the property is based on the premise that
an informed buyer would pay no more than the cost of producing a substitute
property with the same utility as the subject property,. Reproduction Cost New
Less Depreciation (RCNLD) is defined as the cost of constructing an exact replica
of the property at current price with the same or closely related _materials, less
accrued depreciation. Original Cost Less Depreciation (OCLD) is defined as the
original cost of the property when it was first put.into service as a public utility
less accrued depreciation..
Using the detailed inventory data and current unit costs provided by PG &E,
R. W.. Beck calculated the RCNLD value of the streetlight facilities based on the
straight -line method of depreciation. The depreciation factors were based on the
age of the facilities and the survivor curves, average service lives, and net salvage
ratios approved for each of PG&E's streetlight accounts by the California Public
Utilities Commission (CPUC). The OCLD value was then estimated by trending
the current cost figures to the year of installation using the Handy-Whitman Index
of Public Utility Construction Costs, a semi_-annual publication widely used in the
electric utility industry.
Table 2 below shows the RCNLD and OCLD indicators of value based on the
straight -line method of depreciation► and before adjustment for co_ ntribut_ed plant.
Details of-the analysis are provided in Exhibit 2 to this report.
Table 2
RCNLD and OCLD Indicators of Value
(Before Adjustment for Contributions)
CONTRIBUTED PLANT
For new streetlight installations it is PG &E's policy to provide a standard
streetlight on a wood pole with 'overhead service.. Prior to 1978,'if the customer
desired something other than the standard facilities, it was PG&E's policy to
charge the .customer the difference in cost between the 1non- standard and standard
installation. Since 1978, it has been PG &E's policy that for non- standard installa-
tions, the customer pays the entire installed cost of the pole or post, support arm,
and foundation.
PG &E's contributions policy is reflected in the various rate schedules for different
types of streetlight installations. Rates are lower for .comparable streetlights
tivhere the customer has paid or contributed to the cost of installation. This is
3917,111- 00213 - 10101 -0101 R. W. Beck Page 3
Total
Per Light
Reproduction Cost New Less Depreciation
$488;098
$263.98
Original Cost Less Depreciation
$243;724
$131.81
CONTRIBUTED PLANT
For new streetlight installations it is PG &E's policy to provide a standard
streetlight on a wood pole with 'overhead service.. Prior to 1978,'if the customer
desired something other than the standard facilities, it was PG&E's policy to
charge the .customer the difference in cost between the 1non- standard and standard
installation. Since 1978, it has been PG &E's policy that for non- standard installa-
tions, the customer pays the entire installed cost of the pole or post, support arm,
and foundation.
PG &E's contributions policy is reflected in the various rate schedules for different
types of streetlight installations. Rates are lower for .comparable streetlights
tivhere the customer has paid or contributed to the cost of installation. This is
3917,111- 00213 - 10101 -0101 R. W. Beck Page 3
C, O APPRAISAL REPORT
because the CPUC does not permit. PG &E to earn a return on capital investment
contributed by customers, i.e., the cost of contributed plant is excluded from rate
base. PG &E is also not permitted to recover depreciation on plant contributed by
customers. However; PG &E rates do include a component to cover the future
replacement for these facilities. Because the utility is not able to earn a return on
this property and because the customer contributes to the future replacement of
the property through rates, it is appropriate to deduct the amount. of contributed
plant from the total plant inventory.
Table 3 shows the RCNLD and OCLD indicators of value after deducting the
value of contributed plant. Details of the calculations are also provided in
Exhibit I
Table 3
RCNLD and OCLD Indicators of Value
(After.Adjustment for Contributions)
`- - -
Total
Per Light
Reproduction Cost New Less Depreciation
1 $297,196
$160.73
Original Cost Less Depreciation.
$155,992
$84.37
STRAIGHT -LINE VERSUS PRESENT - WORTH DEPRECIATION
The straight -line .rimethod of depreciation was used to calculate: the. RCNLD and
OCLD indicators of value shown in Tables 2 and 3. This method of depreciation
recovers the depreciable base uniformly over the life of the plant. The depreciable
base is equal to the original cost of the plant less the depreciation reserve and is
adjusted for any estimated net salvage. The straight -line method is.used by PG &E
to compute depreciation in rate filings before the CPUC and the Federal Energy
Regulatory Commission (FERC). PG &E also uses the straight -line method of
depreciation for its accounting and financial reporting purposes.
In streetlight acquisition cases, however, PG&E uses the present -worth method of
depreciation to compute the RCNLD value. The present-worth. method of depre-
ciation is based on the concept that the value of the property is equal to the
present worth of the probable future operation returns. Mathematically, the
present -worth method is equivalent to the sinking -fund method of depredation
in which the annual accrual is equal to the annual payment which, if invested in a
sinking fund at a specified interest rate would, at the end of the service life, be
equal to the depreciable base of the property. With the present-worth method of
depreciation, the annual depreciation accrual is less than the straight -line accrual
due to the compounding of interest.2 Thus, the depreciation reserve under the
2 It should be noted that the. present-worth, sinking -fund, and straight -line methods are mathematically
equivalent if the return or interest rate used is zero.,
3947n1 -00213- 10101 -0M R. W. Beck Page 4
—' APPRAISAL REPORT
present -worth or sinking -fund method will always be less than that under the
straight -line method until the end of the plant life.
Table 4 is a comparison of the RCNLD values using the straight -line and 6 percent
present -worth methods of depreciation. The only difference in the analyses is the
depreciation factors used to compute the amount of depreciation reserve. The
results shown in Table 4 are before any deductions for contributed plant. In past
cases, PG &E's initial offer to cities interested in acquiring their streetlight systems
has been based on the RCNLD value of the streetlight facilities using the 6 percent
present -worth method of depreciation with no adjustment for contributed plant.
Table 4
Effect of Using 6 Percent Present -worth Versus
Straight -line Method of Depreciation
Depreciation Method
RCNLD
Total
Per Light
Straight -line Method
$488,098
$263.98
6% Present -worth Method
$753,135
$407.32
Note: Does not include adjustment for contributed plant.
As shown, the RCNLD values using the 6 percent present -worth depreciation
method are substantially greater than the RCNLD values based on the straight -
line method of depreciation. We believe that the straight -line method of deprecia-
tion, which is used by PG &E for accounting, financial reporting, and regulatory
purposes, is more appropriate for determining the RCNLD and OCLD indicators
of value.
INCOME APPROACH
Under the income approach, the value of the property is estimated by capitalizing
or determining the present worth of the prospective net income from the
property. The capitalized income indicator of value for the streetlight facilities
was determined based on a detailed analysis of the revenues and expenses asso-
ciated with the street3 ghts using data from PG &E's most recently filed streetlight
cost -of- service study. Since PG &E will continue to provide energy service to the
streetlights after acquisition, the income value of the streetlight system was
estimated by capitalizing the difference in net income PG &E would receive under
the LS -1 rates for PG &E -owned streetlights and the LS -2 rates for customer -
owned streetlights. The difference in net income was then divided by a
3 The proposed streetlight rates were presented in Chapter 5 of the "Phase 2 Update;' dated June 1995,
of PG &E's 1996 Test Year General Rate Case. It is our understanding that the LS -1 and LS -2 rates
proposed by PG &E became effective in July 1996.
3947111- 00213- 10101 -0101 R. W. Beck Page 5
r" - " O APPRAISAL REPORT
14.30 percent pre -tax capitalization rate, which is equivalent to the 9.79 percent
after -tax rate of return authorized for PG &E by CPUC.4
The capitalized income indicator of value of the 1,849 LS -1 streetlights in the City
is shown in Table 5 below. Detailed tables showing the development of the
estimated-income value.are provided in Exhibit 3 to this report.
Table 5
Capitalized Income Value
DISCUSSION OF RESULTS
For a regulated utility, such as PG &E, the amount of net income (i.e:, return) the
utility is allowed to earn is equal to the value of the utility's rate base multiplied
by the rate of return authorized by the CPUC. The rate base is primarily
composed of the original cost of the plant in service less accumulated deprecia-
tion, i.e., OCLD. Thus, the capitalized income approach of valuation, in which
the value of utility property is determined by capitalizing the CPUC- allowed
return on rate base, should yield an indicator of value that approximates the
OCLD value.
In estimating the fair market value of the streetlight facilities, we gave greater
consideration to the capitalized income indicator of value, which reflects the.
earnings value of the property to PG &E, and the OCLD indicator of value which
recognizes the physical characteristics and"age of the plant. In addition, OCLD is
a better indicator of value than RCNLD for regulated utility property because
OCLD is equivalent to the rate base value of the specific property to be acquired.
ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal was prepared at the request of and for use by the City of San Luis
Obispo and the conclusions contained herein constitute only the opinion of
R. W. Beck. To the extent that information provided by the client or prepared by
others has been used in the preparation of this report, we have relied upon the
information to be accurate, and for which no assurances are intended and no
representations or warranties are made. The information was deemed reasonable
for the purposes of this report.
4 The streetlight cost -of- service study and resulting rates filed in PG &E's 1996.General Rate Case were
based on the 9.79 after -tax rate of return authorized by the CPUC for the, calendar year 1995..
39=711 - 002137 . 10101.0102 R. W. Beck Page 6
Total
Per Light
Capitalized Income Value
$158,138
$85.53
DISCUSSION OF RESULTS
For a regulated utility, such as PG &E, the amount of net income (i.e:, return) the
utility is allowed to earn is equal to the value of the utility's rate base multiplied
by the rate of return authorized by the CPUC. The rate base is primarily
composed of the original cost of the plant in service less accumulated deprecia-
tion, i.e., OCLD. Thus, the capitalized income approach of valuation, in which
the value of utility property is determined by capitalizing the CPUC- allowed
return on rate base, should yield an indicator of value that approximates the
OCLD value.
In estimating the fair market value of the streetlight facilities, we gave greater
consideration to the capitalized income indicator of value, which reflects the.
earnings value of the property to PG &E, and the OCLD indicator of value which
recognizes the physical characteristics and"age of the plant. In addition, OCLD is
a better indicator of value than RCNLD for regulated utility property because
OCLD is equivalent to the rate base value of the specific property to be acquired.
ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal was prepared at the request of and for use by the City of San Luis
Obispo and the conclusions contained herein constitute only the opinion of
R. W. Beck. To the extent that information provided by the client or prepared by
others has been used in the preparation of this report, we have relied upon the
information to be accurate, and for which no assurances are intended and no
representations or warranties are made. The information was deemed reasonable
for the purposes of this report.
4 The streetlight cost -of- service study and resulting rates filed in PG &E's 1996.General Rate Case were
based on the 9.79 after -tax rate of return authorized by the CPUC for the, calendar year 1995..
39=711 - 002137 . 10101.0102 R. W. Beck Page 6
APPRAISAL REPORT
The conclusions and opinions of .value found in this report are made expressly to
the following conditions and stipulations:
1. No responsibility is assumed by R. W. Beck for matters which are legal in
nature, nor do we render any opinion as to the condition of the facilities or
title, and land and/or land rights, which are assumed to be good and.
marketable.
2. All existing liens and encumbrances have been disregarded and the value of
the property was appraised_ as though free and clear and under responsible
ownership.
3: The streetlight facilities that would be acquired by the City were estimated
based on a detailed inventory dated August 1996 provided by PG &E showing
the type, quantity, and age of the streetlight facilities. R. W. Beck reviewed
the data for reasonableness but did not verify the accuracy of the inventory.
For the purpose of our appraisal analysis, it. was assumed that the inventory
provided by PG &E was an accurate representation. of the streetlight facilities
that would be acquired.
4. R. W. Beck did not conduct a visual inspection of the streetlight facilities.
Therefore, we cannot comment on the physical or functional condition of the
system.
5. The reproduction cost new to install the streetlight facilities was determined
based on PG &E's 1996 unit costs by type of facility.
5. The depreciation factors used to estimate the RCNLD /OCLD of the facilities
are based on the survivor curve, average service life, and net salvage ratio
approved by the CPUC for each PG &E streetlight account.
6. The Handy_ Whitman index of Public Utility Constrlcction Costs, a semi - annual
publication widely used in the electric utility industry, was used to trend the
current cost figures to the year of installation.
7. The capitalized income indicator of value was developed using data from
"Phase 2 Update;" dated June 1995, of PG &E's 1996 Test Year General Rate
Case Streetlight Workpapers.
8. No one outside of R. W. Beck has provided significant assistance. to the prepa-
ration of this report, except for the, information provided by PG &E upon
which we have relied. Individuals affiliated with R. W. Beck and contributing
to this report are Nancy Heller Hughes, Accredited Senior Appraiser, and
Wing F. Wong, Economist.
39=7n7- 00_73 - 10101 -0101 R. W. Beck Page 7
CONCLUSIONS AND RESULTS
'D APPRAISAL REPORT
The following table summarizes our determinations of the value of the 1,849
streetlights presently owned by PG &E and located within the City of San Luis
Obispo as of-August 1,1996. These estimates are based on the limiting conditions
and assumptions described in this report.
Table 6
Summary of Results
39 -17111- 00213 - 10101 -0201 R. W. Beck Page 8
Total
Per Light
Cost Approach:
Reproduction Cost New Less Depreciation
$297,196
$160.73
Original Cost Less. Depredation Value
$155,992
$84.37
Income Approach:
Capitalized Income Value
$158,138
$85.53
Market Approach
NA
NA
Estimated Fair Market Value
$1.57,165
$85.00
39 -17111- 00213 - 10101 -0201 R. W. Beck Page 8
O
CERTIFICATION
O APPRAISAL REPORT
I, Nancy Heller Hughes, hereby certify that, to the best of my knowledge and .
belief,. the statements of fact contained in this report are true and correct. The
reported analyses, opinions, and conclusions, which were prepared by me or
under my direction, are limited by the assumptions and limiting conditions stated
in this report. R. W. Beck has no present or prospective interest in the property
that is the subject of this report; and has no personal interest or bias with respect
to the parties involved. Our compensation is not. contingent upon the reporting
of a predetermined value or direction in value that favors the cause of the client or
involved parties, the amount of the value estimate, the attainment of a stipulated
result, or the occurrence of a subsequent event. This appraisal assignment was
not based on a requested minimum valuation, a specific valuation, or the approval
of a loan. This report has been prepared in conformity with the Uniform
Standards of Professional Appraisal Practice of the Appraisal Foundation and the
Principles of Appraisal Practice and Code of Ethics of the American. Society of
Appraisers. The American Society of Appraisers has a mandatory recertification
program for all of its Senior Merribers; andI am in compliance with that program.
Dated: September 10,1996
R. W. BECK, INC.
Nancy Wller Hughes, AS
.Executive Analyst
R. W. BECK, INC.
2101 Fourth Avenue, Suite 600
Seattle, Washington 98121 -2375
r:.
Exhibits:
1 Listing of Streetlight Facilities to be Acquired bythe. City
2 RCNLD /OCLD Analysis
.3 Capitalized Income Value Analysis
3947111- 00 213= 10101 -0101 R. W. Beck Page 9
0
EXHIBIT 1
LISTING OF STREETLIGHT FACILITIES
TO BE ACQUIRED BY THE CITY
4 .1
CITY OF SAN LUIS OBISPO
INVENTORY OF STREET LIGHTING FACILITIES
AUGUST 1996
LINE
CCOUNT
DESCRIPTION
QUANTTfY
1
215
SER, ST. LT. OHD. DROP 100'
372
2
215
VERTICAL RUN 3'
698
3
216
RISER MOULDING U- SHAPE 2 "/30' PVC
27
4
216
SERVICE ST. LT. *6 AL. 600V UG SLAP
757
5
217
LUMINAIRE HPSV 10OW
105
6
217
LUMINAIRE HPSV 20OW
334
7
217
LUMINAIRE HPSV 250W
2
8
217
LUMINAIRE HPSV 40OW
3
9
217
LUMINAIRE HPSV 70W
1,405
TOTAL LUMINAIRES
1,849
10
217
SUSPENSION 12'
49
11
217
SUSPENSION 16'
21
12
217
SUSPENSION 30"
717
13
217
SUSPENSION 4'
91
14
217
SUSPENSION 6'
511
15
217
SUSPENSION 8'
37
TOTAL SUSPENSIONS
1,426
16
218
POLE STREETLIGHT WD 25 FT
13
17
218
POLE STREETLIGHT WD 30 FT
5
18
218
POLE STREETLIGHT WD 35 FT
84
19
218
POLE STREETLIGHT WD 40 FT
3
20
218
POLE STREETLIGHT WD 45 FT
1
21
218
POLE CENTER BORED WOOD 30' /IW
1
22
218
POLE +FND +IW /O MAST ARM ALU 28'
225
23
218
POLE +FND +IW /O MAST ARM ALU 32'
1
24
218
POLE +FND +TW /O MAST ARM STEEL 28'
67
25
218
POLE +FND +IW /O MAST ARM STEEL 32'
216
26
218
POLE +FND +TW /O MAST ARM STEEL 35'
55
27
218
POST INCL FOUNDATION +IW STEEL 14'
41
TOTAL POLES AND POSTS
712
R W. Beck 9/11/96
O
EXHIBIT 2
RCNLD/OCL.D ANALYSIS
STREET LIGHTING FACILITIES
OF PACIFIC GAS AND ELECTRIC COMPANY
LOCATED IN THE CITY OF SAN LUIS OBISPO, CALIFORNIA
VALUE AS OF AUGUST 1, 1996
STRAIGHT LINE BASIS
GROSS PLANT
LESS CONTRIBUTIONS
RCN
ESTIMATED
ORIGINAL COST
PG&E
DEPRECIATION
ORIGINAL
DEPRECIATION
ACCOUNT
RCN
_DOLLARS
RCNLD
COST
DOLLARS -
OCLD
215
114,178
106,234
7,944
27,878
23,225
4,653
216
143,227
51,004
92,223
85,653
25,149
60,504
217
456,570
348,381
108,189
204,337
135,383
68,954
218
784,607
504,865
279,742
.251,140
141,529
109,613
TOTAL
51,498,582
$1,010,484
5488 ,098
5569,008
$325,286
$243,724
LESS CONTRIBUTIONS
NIT PLANT
RCN
ESTIMATED
ORIGINAL COST
PG &E
DEPRECIATION
ORIGINAL
DEPRECIATION
._.ACCOUNT __
.RCN.
DOLLARS
RCNLD
COST
DOLLARS -
OCLD
n5
0
0
0
0
0
- 0
216
(9,753)
(5,365)
(4,388)
(2,394)
(,292)
(1,102)
217
24,734
16A47
8,287
16,222
10,787
5,435
218
487,304
300,301
187,003
177,495
94,097
83,399
TOTAL
.5502,285
5311383
$190,902
5193,323
5103,592
567,732
NIT PLANT
VALLE PER STREETLIGHT (GROSS PLANT) 5263.98 5731.81
VALUE PER MWETLIGHT (NET PLANT) $160.73 .58137
SLOB'BPO.XLS R W. Beck - 9/11/%
RCN
ESTIMATED
ORIGINAL COST
PG &E
DEPRECIATION
ORIGINAL
DEPRECIATION
ACCOUNT -_
RCN
DOLLARS
RCNLD
COST
DOLLARS
OCLD_.
215
114,178
106,231
7,944
27,878
23,225
4,653
2!6
152,980
56,369
96,611
88,047
26,441
61,606
217
431,836
331,934
99,902
188,115
124,54
63,519
218
297,303
204564
92,739
73,645
47,432
2614
TOTAL
59%,297
$699,101
5297,1%
537705
5221,694
5155,992
TOTAL NUMBER OF
STREETLIGHTS
1,849
VALLE PER STREETLIGHT (GROSS PLANT) 5263.98 5731.81
VALUE PER MWETLIGHT (NET PLANT) $160.73 .58137
SLOB'BPO.XLS R W. Beck - 9/11/%
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TABLET
STREET LIGHTING FACILITIES
OF PACIFIC GAS AND ELECTRIC COMPANY
LOCATED IN THE CITY OF SAN LUIS OBISPO, CALIFORNIA
SUMMARY OF RATES USED IN STUDY
Full Cost
Schedule LS-1
Line Lamp Initial Avg. kWh Rates"
No. Watts Volts Lumens per Month Quantity 1996 GRC
(a) N
HIGH PRESSURE SODIUM VAPOR
553 6.182
60 7.124
0 8.650
141 10.652
1 12.428
2 17.062
Full Cost
LS-2A
Rates
1996 GRC
(c)
2432
3.313
4.706
6.393
7.714
12.041
270
LS-1A
2432
32
7.397
1
70 watt
120
5,800
29
2
100 watt
120
9,500
41
3
150 watt
120
16,000
60
4
200 watt
240
22,000
81
5
250 watt
240
25,500
100
6
400 watt
240
46,000
154
LS -1C
7
70 watt
120
5,800
29
8
100 watt
120
9,500
41
9
150 watt
120
16,000
60
10
200 watt
240
22,000
81
11
250 watt
240
25,500
100
12
400 watt
240
46,000
154 .
LS-1D
13
70 watt
120
5,800
29
14
100 watt
120
91500
41
15
150 watt
120
16,000
60
LS -1E
16
70 watt
120
5,800
29
17
100 watt
120
91500
41
18
150 watt
120
16,000
60
19
200 watt
240
22,000
81
20
250 watt
240
25,500
100
21
400 watt
240
46,000
154
Based on Energy Charge = 0.07335 / kWh.
553 6.182
60 7.124
0 8.650
141 10.652
1 12.428
2 17.062
Full Cost
LS-2A
Rates
1996 GRC
(c)
2432
3.313
4.706
6.393
7.714
12.041
270
6.543
2432
32
7.397
3.313
0
8.836
4.706
74
10.698
6.393
0
11.993
7.714
1
16.469
12041
41
9.381
2432
0
9.971
3.313
0
11.553
4.706
453 9.535
8 .:10.389
0 11.828
104 13.690
0 14.985
0 19.462
2432
3.313
4.706
6.393
7.714
12.041
9/11/96 R. W. Beck Page 1
� 1
TABLE 1 (continued)
STREET LIGHTING FACILITIES
OF PACIFIC GAS AND ELECTRIC COMPANY
LOCATED IN THE CITY OF SAN LUIS OBISPO, CALIFORNIA
SUMMARY OF RATES USED IN STUDY
Full Cost I Full Cost
(a) Based on April 19% streetlight inventory provided by PG &E.
(b) Full cost rates per 1996 GRC, Phase 2 Update Workpapers, reflects energy charge = 50.07335 /kWh.
(c) Proposed rates per 1996 GRC, Phase 2 Update Workpapers, reflects energy charge = $0.07335/kWh.
A`
9/11/96 F- W. Beck Paget
Schedule
LS-1
LS-2A
Line
Limp
Initial
Avg. kWh
Rates
Rates
No.
Watts
Volts
Lumens
per Mori
Quantity
1996 GRC
1996 GRC
(a)
(b)
(c)
LS-1F
22
70 watt
120
5,800
29
88
12042
2432.
23
100 watt
120
9,500
41
5
12923
3.313
24
150 watt
120
16,000
60
0
14.571
4.706
25
200 watt
240
22,000
81
2
16.495
6.393.
26
250 watt
240
25,500
100
1
18.238
7.714
27
400 watt
240
46,000
154
0
22753
12.041
LS -1F.1
28
70 watt
120
5,800
29
0
12012
2432
29
.100 watt
120
9,500
41
0
12923
3.313
30
150 watt
120
16,000
60
0
14571
4.706
31
200 watt
240
22,000
81
13
16.495
6.393
32
250 watt
240
25,500
100
- 0
ISMS
7.714
33
400 watt
240
46,000
154
0
22753
12.041
34
Grand Total
11849
(a) Based on April 19% streetlight inventory provided by PG &E.
(b) Full cost rates per 1996 GRC, Phase 2 Update Workpapers, reflects energy charge = 50.07335 /kWh.
(c) Proposed rates per 1996 GRC, Phase 2 Update Workpapers, reflects energy charge = $0.07335/kWh.
A`
9/11/96 F- W. Beck Paget
Lin
No.
1
2
3
4
5
6
7
8
9
10
it
12
13
14
15
16
17
18
19
20
21
22
23
24
23
26
27
28
29
30
31
32
33
U
TABLE 2
C',
STREET LIGHTING FACILITIES
OF PACIFIC GAS AND ELECTRIC COMPANY
LOCATED IN THE CITY OF SAN LUIS OBISPO,.CALIFORNIA
LS-1 and LS-2A FULL COST REVENUES AND O & M EXPENSES
Line Full Cost Expense
Schedule LS-1 Rates ($ /Iarno /mth)
(a) (b)
HIGH PRESSURE SODIUM VAPOR
LS -1A
70 watt 41,026 1.49392
100 watt 5,129 1.49390
150 watt 0 1.52144
200 watt 1.8,023 1.52144
250 watt 149 1.54889
400 watt 409 1.54889
LS-IC
70 watt 21,200 1.49392
100 watt 2,841 1.49390
150 watt 0 1.52144
200 watt 9,500 1.52144
230 watt 0 1.54889
400 watt 198 1.54889
LS-1D
70 watt 4,616 1.49392
100 watt 0 1.49390
150 watt 0 152144
LS -1E
70 watt 51,835 1.49392
100 watt 997 1,49390
150 watt 0 1.52144
200 watt 17,085 152144
250 watt 0 1.54889
400 watt 0 1.54889
LS-1F
70 watt 12,717 1.49392
100 watt 775 1.49390
130 watt 0 1.52144
200 watt 396 152144
250 watt 219 1.54889
400 watt _. 0 1.54889
LS -1F.1
70 watt 0 1.49392
100 watt 0 1.49390
150 watt 0 1.52144
200 watt 2573 1.52144
230 watt 0 1.54889
400 watt 0 1.54889
34 Grand Total 5189,688
(a) Quantity • Rate' 12 months.
(b) 1996 GRC, Phase 2 Update Workpapers.
(c) Quantity ' W-M Expense' 12 months.
(d) Quantity ' Rate * 12 months.
(e) 1996 GRC, Phase 2 Update Workpapers.
(f) Quantity • O &M Expense • 12 months.
Gross Full Cost
Annual Revenue O &M Annual
O &M Full Cost Expense O &M
Expense LS-2 Rates tVlamv /mthl Expense
(c) (d) (e) m
9,914 16,142 0.26190 1,738
1,076 2,385 0.26190 189
0 0 026190 0
2,574 10,818 026190 443
19 93 0.26190 3
37 289 0.26190 6
4,840 7,881 0.26190 849
574 1,272 0.26190 101
0 0 0.26190 0
1,351 5,677 0.26190 233
0 0 0.26190 0
19 144 0.26190 3
735 1,197 0.26190 129
0 0 026190 0
0 0 0.26190 0
8,121 13,223 0.26190 1,424
143 318 026190 23
. 0 0 0.26190 0
1,899 7,979 0.26190 327
0 0 0.26190 0
0 0 0.26190 0
1,578 2,569 0.26190 277
90 199 0.26190 16
0 0 0.26190 0
37 153 0.26190 6
19 93 0.26190 3
0 0 0.26190 0
0
0
0
237
0
0
$33,263
0 0.26190 0
0 0.26190 0
0 0.26190 0
997 026190 41
0 0.26190 0
0 026190 0
$71,429
55,813
9/11/96 R. W. Beck
Page 3
Gross F
Full Cost
Revenue O
O &M
34 Grand Total 5189,688
(a) Quantity • Rate' 12 months.
(b) 1996 GRC, Phase 2 Update Workpapers.
(c) Quantity ' W-M Expense' 12 months.
(d) Quantity ' Rate * 12 months.
(e) 1996 GRC, Phase 2 Update Workpapers.
(f) Quantity • O &M Expense • 12 months.
Gross Full Cost
Annual Revenue O &M Annual
O &M Full Cost Expense O &M
Expense LS-2 Rates tVlamv /mthl Expense
(c) (d) (e) m
9,914 16,142 0.26190 1,738
1,076 2,385 0.26190 189
0 0 026190 0
2,574 10,818 026190 443
19 93 0.26190 3
37 289 0.26190 6
4,840 7,881 0.26190 849
574 1,272 0.26190 101
0 0 0.26190 0
1,351 5,677 0.26190 233
0 0 0.26190 0
19 144 0.26190 3
735 1,197 0.26190 129
0 0 026190 0
0 0 0.26190 0
8,121 13,223 0.26190 1,424
143 318 026190 23
. 0 0 0.26190 0
1,899 7,979 0.26190 327
0 0 0.26190 0
0 0 0.26190 0
1,578 2,569 0.26190 277
90 199 0.26190 16
0 0 0.26190 0
37 153 0.26190 6
19 93 0.26190 3
0 0 0.26190 0
0
0
0
237
0
0
$33,263
0 0.26190 0
0 0.26190 0
0 0.26190 0
997 026190 41
0 0.26190 0
0 026190 0
$71,429
55,813
9/11/96 R. W. Beck
Page 3
0
0
0
237
0
0
$33,263
0 0.26190 0
0 0.26190 0
0 0.26190 0
997 026190 41
0 0.26190 0
0 026190 0
$71,429
55,813
9/11/96 R. W. Beck
Page 3
$71,429
55,813
9/11/96 R. W. Beck
Page 3
Line
No.
1
2
3
4
5
6
7
8
9
10
11
12
11
14
13
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
TABLE 3
STREET LIGHTING FACILITIES
OF PACIFIC GAS AND ELECTRIC COMPANY
LOCATED IN THE CITY OF SAN LUIS OBISPO, CALIFORNIA
DEPRECIATION & REPLACEMENT EXPENSE
34 Grand Total 1,849
Depredation Contributed Replacement
Annual Chg @
Capital
Investment
Schedule
anti
RCN /Unit
(c)
(a)
(b)
HIGH PRESSURE SODIUM VAPOR
LS-1A
0
994
70 watt
553
264.67
100 watt
60
272.26
150 watt
0
285.28
200 watt
141
324.33
250 watt
1
377.48
400 watt
2
415.45
LS-1C
0
0
70 watt
270
309.44
100 watt
32
306.19
150 watt
0
308.36
200 watt
74
330.05
250 watt
0
323.54
400 watt
1
341.98
LS-11)
0
8,472
70 watt
41
276.88
100 watt
0
273.63
150 watt
0
215.80
LS-1E
0
0
70 watt
453
307.21
100 watt
8
303.96
150 watt
0
306.13
200 watt
104
327.82
250 watt
0
321.31
400 watt
0
339.75
LS -1F
0
0
70 watt
88
991.57
100 watt
5
991,63
150 watt
0
1,019.72
200 watt
2
1,049.11
250 watt
1
1,098.26
400 watt.
0
1,121.40
LS -1F.1
70 watt
0
991.57
100 watt
0
991.63
150 watt
0
1,019.72
200 watt
13
1,049.11
250 watt
0
1,093.26
400 watt
0
1,121.40
34 Grand Total 1,849
Depredation Contributed Replacement
Annual Chg @
Capital
Annual Chg
6.0876%
RCN Unit
3.9012%
(c)
(d)
(e)
8,910
0.00
0
994
0.00
0
0
0.00
0
2,784
0.00
0
23
0.00
0
51
0.00
0
5,086
0.00
596
0.00
0
0
0.00
0
1,487
0.00
0
0
0.00
0
21
0.00
0
691
1 ,083.64
0
997.95
1,733
0
1,044.59
0
8,472
974.08
148
974.08.
17,214
0
974.08
304
2,075
974.08
0
0
97108
3,952
0
974.08
0
5,312
0.00
302
0.00
0
0
0.00
0
128
0.00
0
67
0.00
0
0
0.00
0
0
0
0
830
0
0
537,977
0.00
0
0.00
0
0.00
0
0.00
0
0.00
0
0.00
0
$23,203
(a) Inventory based on street light billing records.
(5) Replacement cost for typical installations, Workpapers, pp. STL 5-1 through 5-43.
(c) Depr. Component of Company Investment Levelized Annual Charge, Workpapers, p. SM 13-1,
(d) Replacement cost for typical installations, (Contributed Capital), Workpapers, pp. SIL 5 -5 through 5-7.
(e) Annual Carrying Charge on Contributed Capital, Workpapers, p. SM 13-1.
9/11/96 R. W. Beck Pa¢ee4
O
TABLE4
STREET LIGHTING FACILITIES
OF PACIFIC GAS AND ELECTRIC COMPANY
LOCATED IN THE CITY OF SAN LUIS OBISPO, CALIFORNIA
TAXES OTHER THAN INCOME TAXES
Line
Table.1
2I0,660
5 r 8-6
No.
Line 4 / Line 5
Source
1
Ad Valorem - Street Light System Total
$492,000
STL 13-0
2
Payroll Taxes - Street Light System Total
298,000
STL 13-1
3
Business
3,000
STL 13-2
4
Other
7,000
STL 133
5
Total Taxes Other Than Income Taxes
$800,000
Sum of Lines 1 through 4
6 Number of San Luis Obispo Street Lights
7 Number of PG &E LS -1 Street Lights
8 Allocation Factor- San Luis Obispo
9 Taxes Other Than Income Taxes
Allocated to San Luis Obispo
1,849
Table.1
2I0,660
5 r 8-6
0.0088
Line 4 / Line 5
$7,022 Line 3 • Line 6
9/11/96 R W. Beck Page 5
i
TABLES
STREET LIGHTING FACILITIES
OF PACIFIC GAS AND ELECTRIC COMPANY
LOCATED IN THE CITY OF SAN LUIS OBISPO, CALIFORNIA
DEVELOPMENT OF GROSS WEIGHTED COST OF CAPITAL
For above Comvutations:
Fed Tax ® 35 %
State Tax @ 9.3%
Uncollectables @ 0.24%
Franchise Cam? 0.723%
Super Fund Tax ® 0.12%
Source: 1996 GRC, Phase 2 Update Workpapers, p. STL 12-6.
:J=
9/11/96 R. W. Beck Page
Gross
Line
Capital
Weighted
Net to Gross
Weighted
No.
Ratios
Cost
Cost
Multiplier
Cost
(a)
(b)
(c)
(d)
(e)
Electric Department.
1
Bonds
46.50%
7.62%
3-54%
1.009686
3.58 %'
2
Preferred Stock
5.50%
8.05%
0.44%
1.714697
0.76%
3
Common Stock
48.00%
1210%
5.81%
1.714697
9.96%
4
Total
100.00%
9.79%
14.30 %'
For above Comvutations:
Fed Tax ® 35 %
State Tax @ 9.3%
Uncollectables @ 0.24%
Franchise Cam? 0.723%
Super Fund Tax ® 0.12%
Source: 1996 GRC, Phase 2 Update Workpapers, p. STL 12-6.
:J=
9/11/96 R. W. Beck Page
TABLE 6
STREET LIGHTING FACILITIES
OF PACIFIC GAS AND ELECTRIC COMPANY
LOCATED IN THE CITY OF SAN LUIS OBISPO, CALIFORNIA
CAPITALIZED INCOME INDICATOR OF VALUE
AS OF AUGUST 1, 1996
Line
No.
Source
1
Gross Revenue - Cost.Based LS-1 Rates
$189,688
Table 2
2
Less O & M Expenses
33,263
Table 2
3
Less Depreciation Expense
37,977
Table 3
4
Less Replacement Expense (on Contributed Capital)
23,203.
Table 3
5
Less Taxes Other Than Income Taxes
7,022
Table 4
6
Net Operating Income (Pre -tax)
$88,223
7
Gross Revenue - Cost Based LS -2A Rates
$71,429
Table 2
8
Less O & M Expenses
5,813
Table 2
9
Net Operating Income (Pre -tax)
565,616
10
Unadjusted Net Income Difference
k2,607
11
Capitalization Rate (Pre -tax)
0.142958
Table 5
12
Income Approach Indicator of Value
$158,138
13
14
15
ESTIMATED VALUE (Income Approach) $158,138
Cotal Number of Streetlights 1,849
Value per Streetlight $8553
9/11/96 R IV. Beck Page 7