2017-007 - Public Utilities Commission Approval

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jmf 2115117 RESOLUTION NO. 2017-007 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING THE EXECUTIVE DIRECTOR OF THE PUBLIC WORKS AGENCY TO PURSUE CALIFORNIA PUBLIC UTILITIES COMMISSION APPROVAL TO PURCHASE APPROXIMATELY 7,800 STREETLIGHTS FROM SOUTHERN CALIFORNIA EDISON; SUBJECT TO FURTHER APPROVAL BY THE CITY COUNCIL OF A PURCHASE AND SALE AGREEMENT BETWEEN THE PARTIES WHEREAS, Southern California Edison (SCE) currently owns Eleven Thousand, Three Hundred Seventy Three (11,373) LS -1 electric streetlight facilities located in the City of Santa Ana; and WHEREAS, the City has expressed a desire to purchase approximately Seven Thousand, Eight Hundred Seventeen (7,817) of these streetlights from SCE; and WHEREAS, SCE is willing to sell the streetlight system to the City, on the terms and conditions set forth in a proposed Purchase and Sale Agreement that has been prepared by the City and will be subject to separate approval by the City Council; and WHEREAS, on August 4, 2015, the City Council engaged Tanko Lighting to conduct a feasibility study that verified the value of the streetlights to be $3.7 million, and which estimates the cost to upgrade the streetlights to LED lamps, to install controllers, to repair or replace deficient streetlight poles, and to design the streetlight system to adjust over/under lit areas at $8.6 million, resulting in a total one-time cost to purchase and upgrade the streetlight system of approximately $12.3 million; and WHEREAS, by taking ownership of the 7,817 streetlights, the City will have the opportunity to lower costs, improve operations, and enhance services provided by the streetlights to both the residents and visitors of Santa Ana, resulting in modernized streetlights utilizing energy efficient LED fixtures which will significantly reduce energy and maintenance costs; and WHEREAS, financing the acquisition of the streetlights would incur an annual maintenance cost of approximately $100,000, but with the upgrade to LED lamps and its annual energy consumption savings of approximately $1 million, results in an annual net savings of $900,000; and WHEREAS, this purchase is subject to approval by the California Public Utilities Commission and must follow procedures established by the CPUC, including a detailed appraisal of the existing SCE -owned streetlight system based on a value set by the Replacement -Cost -New -Less -Depreciation method; and Resolution No. 2017-007 Page 1 of 3