25G - AGMT - LIGHT POLE LICENSING

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Agreements Authorizing City to pursue CPUC Approval to Purchase Streetlight System from SCE April 4, 2017 Page 2 As a condition of the sale SCE requested a Light Pole License agreement which would allow SCE to keep existing wireless communications devices, which are needed for their smart meter system, on our streetlights and afford them the opportunity to attach new wireless communication devices on our streetlights if all other options have been fully exhausted. These devices are used by SCE to collect and relay data, and to communicate with SCE electrical power distribution systems. The License Agreement identifies the terms and conditions for the maintenance, removal, repair, or replacement of the attached devices. Background SCE altered its long- standing corporate policy with respect to the streetlight system by making SCE -owned streetlights available for purchase by local governments. SCE currently owns approximately 11,373 high pressure sodium streetlights throughout the City of Santa Ana, of which approximately 7,800 have been made available for purchase. Upon CPUC review and approval, which is anticipated to take four to six months, the City Council would then have the option to pursue the streetlight system purchase. After submission of the agreements to the CPUC, staff will publish a Request for Proposals to engage a financial advisor to examine available financial programs to fund the purchase and retrofitting of the acquired streetlight system. Upon approval of the agreements by the CPUC, the financial model and options would be presented to Council for further consideration and direction. The energy and maintenance costs are anticipated to be reduced by approximately $900,000 per year. These savings will be leveraged to finance the acquisition. Ownership of the 7,817 SCE streetlights by the City will result in many benefits: • Convert to energy efficient Light- Emitting Diode (LED) fixtures • Improve lighting levels and safety • Provide faster street lighting service calls • Improve the environment • Reduce energy cost to the City • Provide higher street lighting system reliability • Reduce maintenance costs from significantly improved LED performance • Leverage the energy savings to purchase the street lights The total one -time cost to purchase and upgrade the streetlight system is approximately $12.3 million (Exhibit 4) and will be financed with the use of maintenance /energy cost savings. Established CPUC procedures must be followed in order to present the option to acquire the SCE -owned streetlights. Pursuant to those requirements, a detailed appraisal of the existing SCE -owned streetlight system was conducted (Exhibit 5). The value of the street lighting system 25G -2