public utilities commission - southern … utilities commission san francisco, ca 94102-3298 june...

STATE OF CALIFORNIA Edmund G. Brown Jr., Governor

PUBLIC UTILITIES COMMISSION

SAN FRANCISCO, CA 94102-3298

June 19, 2013 Advice Letter 2765-E

Akbar Jazayeri

Vice President, Regulatory Operations

Southern California Edison Company

P O Box 800

Rosemead, CA 91770

Subject: Mira Loma Substation – ROW Dedication Request

by SCE for Approval to Grant Easement Pursuant

to Resolution ALJ-186 as Extended and Modified by

Resolutions ALJ-202, ALJ-244, and ALJ-272 (Section

851 Pilot Program)

Dear Mr. Jazayeri:

Advice Letter 2765-E is effective May 9, 2013.

Sincerely,

Edward F. Randolph, Director

Energy Division

P.O. Box 800 8631 Rush Street Rosemead, California 91770 (626) 302-3630 Fax (626) 302-4829

Akbar Jazayeri Vice President of Regulatory Operations

August 8, 2012

ADVICE 2765-E (U 338-E)

PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION

SUBJECT: Mira Loma Substation – ROW Dedication Request by Southern California Edison Company for Approval to Grant Easement Pursuant to Resolution ALJ-186 as Extended and Modified by Resolutions ALJ-202, ALJ-244, and ALJ-272 (Section 851 Pilot Program)

PURPOSE

Southern California Edison Company (“SCE”) respectfully requests an order from the California Public Utilities Commission (“Commission”) authorizing SCE to convey certain real property under Public Utilities Code Section 851 to the City of Ontario (“City”).

The conveyance of the subject property (herein the “ROW Property”) is being requested in order to allow the City to expand certain street improvements. The conveyance would be made pursuant to the form of Grant Deed attached hereto as Exhibit “A” (“Grant Deed”). The Grant Deed is required to be provided by SCE to satisfy a development condition placed on SCE in connection with its Mira Loma peaker plant approved in 2007.

The ROW Property consists of a 28’ x 988’ strip of land which is a portion of the eastern perimeter of SCE’s real property in Ontario, California; the total area of the ROW Property is approximately 0.6 acres of land. Legal descriptions and depictions of the ROW Property are set forth in the proposed form of Grant Deed attached hereto. The ROW Property is generally vacant other than a driveway apron and ancillary landscaping that will be relocated.

SCE believes that the granting to and use of the ROW Property by the City will not affect SCE’s use and operation of its facilities on SCE’s remaining property. Utility service will not be affected as a result of Commission approval of the conveyance contemplated in the Grant Deed.

ADVICE 2765-E (U 338-E) - 2 - August 8, 2012

BACKGROUND

In 2007, SCE obtained approvals to construct a peaker plant at its Mira Loma Substation property located in Ontario, California (“Project Site”); the Project Site contains approximately 122 acres. In connection with its development approvals, SCE agreed to grant to the City a 28 foot strip of land to allow for the widening of Milliken Avenue, an existing road which is adjacent to the eastern edge of the Project Site.

If the Commission authorizes SCE to grant the ROW Property, then the Grant Deed, in the form attached hereto, would be executed by SCE and recorded with the County of San Bernardino.

The Grant Deed reserves for SCE a utility easement (“Easement”) which will permit SCE to “construct, operate, use, maintain, alter, add to, reconstruct, enlarge, repair, renew, replace, inspect, improve, relocate, and/or remove” above- and below-ground electric lines and communication circuits. Accordingly, the conveyance of the ROW Property is not believed to unreasonably endanger or interfere with the construction, maintenance, use or operation of SCE’s electrical transmission and distribution lines and other utility improvements necessary for SCE’s utility purposes.

SCE believes that the granting of the ROW Property to the City is in the best interests of SCE’s ratepayers and shareholders as doing so allows SCE to satisify its commitments made in connection with the construction of the Mira Loma peaker plant.

INFORMATION AS REQUIRED PER RESOLUTION ALJ-244

Section IV of Appendix A to ALJ-244 requires that the following information be included in advice letters related to the Section 851 Pilot Program:

(1) Identity and addresses of all parties to the proposed transaction:

Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, CA 91770

City of Ontario 303 East “B” Street Ontario, CA 91764

(2) Complete description of the property including present location, condition and use:

A legal description of the ROW Property is attached to the proposed form of Grant Deed attached hereto. The ROW Property consists of a 28’ x 988’ strip of land adjacent to the existing roadway that is to be expanded.


The ROW Property is generally unimproved, vacant land over which SCE’s transmission lines cross and certain landscaping/driveway improvements exist. The conveyance of the ROW Property will have no effect on existing transmission lines due to the Easement reservation set forth in the Grant Deed.

(3) Transferee’s intended use of the property:

Public street (Milliken Avenue) expansion, plus attendent landscaping improvements.

(4) Complete description of financial terms of the proposed transaction:

SCE is conveying the ROW Property without any monetary consideration. The grant of the ROW Property is being made to satisfy an agreed upon development condition placed on SCE’s construction of a peaker plant at its Mira Loma Substation property.

(5) Description of how financial proceeds of the transaction will be distributed:

Not applicable.

(6) Statement on the impact of the transaction on ratebase and any effect on the ability of the utility to serve customers and the public:

SCE believes that the transaction will have minimal impact on ratebase due to the size, location and configuration of the ROW Property. SCE believes that the granting of the ROW Property subject to the reservation of the Easement will have no effect on SCE’s ability to serve its customers or the public and will have no effect on SCE’s electricity transmission or distribution facilities.

(7) For sales of real property and depreciable assets, the original cost, present book value, and present fair market value, and a detailed description of how the fair market value was determined (e.g. appraisal):

Not applicable; see item 9 below.

(8) For leases of real property, the fair market rental value, a detailed description of how the fair market rental value was determined, and any additional information necessary to show compliance with Section II, A.6 of Appendix A of ALJ-244:

Not applicable.


(9) For easements or rights-of-way, the fair market value of the easement or right-of-way and a detailed description of how the fair market value was determined:

An appraisal to properly value the ROW Property was completed on June 26, 2012 by Charles A. Thomas, a State Licensed Real Estate Appraiser, CA Lic. #AG037555. The most appropriate method for valuing this type of property interest was employed - a variation of the Sales Comparison Approach. In this approach, the appraiser compared the subject property to similar use property near the subject property. The appraiser concluded a unit value for the land from the comparable sales, then applied a percentage of that unit value to represent the specific property rights that are reserved to SCE by virtue of the Easement. Generally, right-of-way dedications are not transferred in the marketplace and there is, therefore, no “market” for the value of such an interest. By taking an estimated percentage of the rights reserved to SCE in the Easement compared to the fee title value, the appraiser can correctly estimate the value of the remaining property rights conveyed. Here, the ROW Property value (net of the the reserved rights in the Easement) was determined to be $41,500. A copy of the appraisal is attached as Exhibit “B.”

(10) A complete description of any recent past (without the prior two years) or antcipated future transactions that may appear to be related to the present transaction, such as sales or leases of real property that are located near the property at issue or that are being transferred to the same transferee; or for depreciable assets, sales of similar assets or sales to the same transferee:

Not applicable as no related transactions are involved.

(11) Sufficient information and documentation (including environmental documentation) to show that all of the eligibity criteria stated in Section II.A of Appendix A of ALJ-244 have been met:

SCE believes that all applicable eligibility criteria stated in Section II.A of Appendix A of ALJ-244 are satisfied, as follows:

1. Satisfied. The City has two projects which studied the environmental impacts of the widening of Milliken Avenue. The City conducted the CEQA environmental review as Lead Agency for both projects. First, the City of Ontario City Council approved its New Model Colony Transportation Program Implementation Plan project on September 10, 2002. It adopted the New Model Colony Transportation Program Implementation Plan mitigated negative declaration and filed a notice of determination on or about September 11, 2002. Second, the City of Ontario City Council approved The Ontario Plan project on January 27, 2010. It adopted


The Ontario Plan final environmental impact report (SCH 2008101140) and filed a notice of determination on January 28, 2010.

2. Satisfied. The transaction will not adversely affect any public interest or SCE’s ability to provide services. See item 6 above.

3. Not applicable. There are no financial proceeds.

4. Satisfied. See item 11.7 below.

5. Not applicable. The transaction does not result in the sale of any buildings.

6. Not applicable. The transaction is neither a sale of depreciable assets nor a lease or lease equivalent.

7. Satisified. The value of the ROW Property (net of the Easement reservation to SCE) is $41,500 (refer to item 9 above), which is less than $5 million.

8. Satisfied. The transaction will not materially impact the ratebase. See item 6 above.

9. Not applicable. The transaction does not result in any transfer or change in ownership of facilities.

10. Satisified. SCE believes that the transaction does not warrant a more comprehensive review due to its nature and the rights and interests involved.

(12) The filing utility may submit additional information to assist in the review of the advice letter, including recent photographs, scaled maps, drawings, etc.:

None.

(13) Environmental information dependent upon whether: (a) the applicant believes that the transaction is exempt from review under CEQA, (b) the applicant believes that the transaction is not a project under CEQA, or (c) if another public agency, acting as the lead agency, has completed environmental review of the project and the applicant believes that the Commission is a responsible agency under CEQA. See Section IV, A.13 of Appendix A of ALJ-244 for applicable information.


The City, acting as the Lead Agency, has completed environmental review of the project and SCE believes the Commission is a Responsible Agency under CEQA.

1. (a) The Lead Agency:

The City of Ontario Planning Department 303 East “B” Street Ontario, CA 91764

(b) The City prepared (i) a mitigated negative declaration for the New Model Colony Transportation Program Implementation Plan and (ii) an environmental impact report for The Ontario Plan.

(c) The City approved the New Model Colony Transportation Program Implementation Plan mitigated negative declaration on or about September 10, 2002. The City approved The Ontario Plan final environmental impact report on January 27, 2010.

(d) The New Model Colony Transportation Program Implementation Plan notice of determination was filed on or about September 11, 2002. The Ontario Plan notice of determination was filed on January 28, 2010.

2. A copy of all CEQA documents prepared by or for the City regarding this project will be provided by SCE upon request from the Commission.

3. The New Model Colony Transportation Program Implementation Plan mitigated negative declaration and The Ontario Plan Final Environmental Impact Report (collectively, “Impact Reports”) examine the environmental impacts, mitigation measures and findings related to this project.

4. No aspect of the projects related to this transaction and the environmental setting has changed since the issuance of the Impact Reports.

5. The expansion of the affected streets will not require approval by any additional public agencies.


TIER DESIGNATION

Pursuant to Resolution ALJ-244, this advice letter is subject to Commission disposition and is submitted with a Tier 3 designation.

EFFECTIVE DATE

SCE requests that this advice filing become effective by Commission resolution as soon as possible.

NOTICE

Anyone wishing to protest this advice filing may do so by letter via U.S. Mail, facsimile, or electronically, any of which must be received no later than 20 days after the date of this advice filing. Protests should be mailed to:

CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California 94102 E-mail: [email protected]

Copies should also be mailed to the attention of the Director, Energy Division, Room 4004 (same address above).

In addition, protests and all other correspondence regarding this advice letter should also be sent by letter and transmitted via facsimile or electronically to the attention of:

Akbar Jazayeri Vice President of Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, California 91770 Facsimile: (626) 302-4829 E-mail: [email protected] Leslie E. Starck Senior Vice President c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 San Francisco, California 94102 Facsimile: (415) 929-5540 E-mail: [email protected]


There are no restrictions on who may file a protest, but the protest shall set forth specifically the grounds upon which it is based and shall be submitted expeditiously.

In accordance with Section 4 of General Order No. (GO) 96-B, SCE is serving copies of this advice filing to the interested parties shown on the attached GO 96-B list and, in accordance with Resolution ALJ-244, on the Energy Division, the Commission Division of Ratepayer Advocates, the Commission CEQA Team ([email protected]; [email protected]; [email protected]), and the relevant departments of the City of Ontario. Address change requests to the GO 96-B service list should be directed by electronic mail to [email protected] or at (626) 302-2930. For changes to all other service lists, please contact the Commission’s Process Office at (415) 703-2021 or by electronic mail at [email protected].

Further, in accordance with Public Utilities Code Section 491, notice to the public is hereby given by filing and keeping the advice filing at SCE’s corporate headquarters. To view other SCE advice letters filed with the Commission, log on to SCE’s web site at http://www.sce.com/AboutSCE/Regulatory/adviceletters.

For questions, please contact Claire Keane at (626) 302-6654 or by electronic mail at [email protected].

Southern California Edison Company

Akbar Jazayeri

AJ:ck:sq

Enclosures

CALIFORNIA PUBLIC UTILITIES COMMISSION

ADVICE LETTER FILING SUMMARY ENERGY UTILITY

MUST BE COMPLETED BY UTILITY (Attach additional pages as needed)

Company name/CPUC Utility No.: Southern California Edison Company (U 338-E)

Utility type: Contact Person: Darrah Morgan

ELC GAS Phone #: (626) 302-2086

PLC HEAT WATER E-mail: [email protected]

E-mail Disposition Notice to: [email protected]

EXPLANATION OF UTILITY TYPE

ELC = Electric GAS = Gas PLC = Pipeline HEAT = Heat WATER = Water

(Date Filed/ Received Stamp by CPUC)

Advice Letter (AL) #: 2765-E Tier Designation: 3

Subject of AL: Mira Loma Substation – ROW Dedication, Request by Southern California Edison Company for Approval to Grant Easement Pursuant to Resolution ALJ-186 as Extended and Modified by Resolutions ALJ-202, ALJ-244, and ALJ-272 (Section 851 Pilot Program)

Keywords (choose from CPUC listing): Compliance

AL filing type: Monthly Quarterly Annual One-Time Other

If AL filed in compliance with a Commission order, indicate relevant Decision/Resolution #:

Resolutions ALJ-186, ALJ-202, ALJ-244, and ALJ-272

Does AL replace a withdrawn or rejected AL? If so, identify the prior AL:

Summarize differences between the AL and the prior withdrawn or rejected AL1:

Confidential treatment requested? Yes No

If yes, specification of confidential information: Confidential information will be made available to appropriate parties who execute a nondisclosure agreement. Name and contact information to request nondisclosure agreement/access to confidential information:

Resolution Required? Yes No

Requested effective date: upon Commission approval

No. of tariff sheets: -0-

Estimated system annual revenue effect: (%):

Estimated system average rate effect (%):

When rates are affected by AL, include attachment in AL showing average rate effects on customer classes (residential, small commercial, large C/I, agricultural, lighting).

Tariff schedules affected: None

Service affected and changes proposed1:

Pending advice letters that revise the same tariff sheets:

1 Discuss in AL if more space is needed.

Protests and all other correspondence regarding this AL are due no later than 20 days after the date of this filing, unless otherwise authorized by the Commission, and shall be sent to:

CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, CA 94102 E-mail: [email protected]

Akbar Jazayeri Vice President of Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, California 91770 Facsimile: (626) 302-4829 E-mail: [email protected] Leslie E. Starck Senior Vice President c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 San Francisco, California 94102 Facsimile: (415) 929-5540 E-mail: [email protected]

Exhibit A

Grant Deed

Exhibit B

Appraisal

OS - Real Properties Department June 26, 2012 Real Estate Valuation Dwayne Whitfield Land Services Agent – Land Management Real Properties, Operations Support SUBJECT: Road Dedication: Mira Loma Substation 28’ X 988’ Wide Strip along Milliken Ave.

File # 12-126, Not#201120675, Order#800583455 13568 S. Milliken Avenue, Ontario CA

APN: 0218-171-10 In response to your request, I have provided the following appraisal reported in a Summary Appraisal format for the valuation of the road dedication to the City of Ontario, located along the eastern portion of said parcel on Milliken Avenue owned by Southern California Edison Company (SCE). The following report is intended to comply with the reporting requirements set forth under Standards Rule 2-2(b), of the Uniform Standards of Professional Appraisal Practice (USPAP) for a Summary Appraisal Report. This report incorporates, by reference, the data and valuation analysis contained in the office file. The information contained in this report is specific and confidential to the needs of Southern California Edison Company (the client); the appraiser is not responsible for unauthorized use of this report. Additional supporting information is contained in the appraiser/company work file and may be provided upon request. Subject Property: The subject property is located in Ontario. The assessor’s parcel numbers for

the property that the proposed road dedication to the City of Ontario is 0218-171-10 (San Bernardino County, CA).

The strip of land that is the subject of this assignment is proposed as of the date of this report over portions of the subject property within the existing Milliken Avenue, which will allow SCE to dedicate to the City of Ontario for road expansion. Per grant deed, the proposed dedication consists of a strip of land (28’ X 988.29’) along the southeastern boundary portion of the parcel adjacent to Milliken Avenue containing approximately 122.3 acres (per property detail report by LandVision).

Interest Appraised: Fee Simple for the permanent road dedication and utility easement for the

reservation. Fee Simple Defined: “Absolute ownership unencumbered by any other interest or estate, subject only

to the limitations imposed by the governmental powers of taxation, eminent-domain, police power, and escheat.”1

Easement Defined: An interest in real property that conveys use, but not ownership, of a portion of

an owner’s property.2 Value estimated: Based on the unencumbered fee unit market value (price per square foot).

Value of the Fee Simple Dedication: $166,000 Value of the Reservation for overhead and underground utility easements: $124,500 Value of Dedication Net of Reservation: $41,500

Total: $41,500

1 The Dictionary of Real Estate Appraisal, Fifth Edition, (Chicago: Appraisal Institute, 2010), page 78. 2 Appraisal Institute, Dictionary of Real Estate Appraisal (3rd ed.), p. 110.

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SCE Appraisal File#12-126, Not#201120675 Milliken Avenue Road Dedication: Mira Loma Substation

internal Page 4

BASIS OF VALUATION "Fair Market Value", as defined pursuant to Chapter 1275, Title 7, Part 3 of the California Code of Civil Procedure, entitled: Eminent Domain Law, is as follows: Fair Market Value. . . Article 4. Measure of Compensation for Property Taken. 1263.320 (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 purposes for which the property is reasonably adaptable and available. (b) The fair market value of the 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.

1263.330 The fair market value of the property taken shall not include any increase

or decrease in the value of the property that is attributable to any of the following: (a) The project for which the property is taken; (b) The eminent domain proceeding in which the property is taken; (c) Any preliminary actions of the plaintiff relating to the taking of the property.

1263.420 Damage to the remainder is the damage, if any, caused to the remainder by

either or both of the following: (a) The severance of the remainder from the part taken; (b) The construction and use of the project for which the property is taken in the manner proposed by the plaintiff whether or not damage is caused by a portion of the project located on the part taken.

1263.430 Benefit to the remainder is the benefit, if any, caused by the construction

and use of the project for which the property is taken in the manner proposed by the plaintiff whether or not the benefit is caused by a portion of the project located on the part taken.

"Easement", as defined in the Dictionary of Real Estate Appraisal (5th Edition),

Appraisal Institute, pages 63 and 246, is as follows: 1. The right to use another’s land for a stated purpose. 2. Nonpossessory (incorporeal) interest in landed property conveying use, but not ownership, of a portion of that property.


internal Page 5

SUBJECT DATA Location: Located at the eastern portion of the parcel.

APN: 0218-171-10 Ownership: Southern California Edison Company. Subject sales history: According to the property detail report provided by Realquest, the subject has

not transferred within the last three years. Size: Per property detail report provided by Realquest, the subject’s parcel includes

approximately 122.3 acres. Interest Appraised: Proposed fee simple road dedication to the City of Ontario Property Type: Industrial Zoning: Per representative of the Ontario Planner (Rudy Zeledon, 909-395-2422), the

subject is zoned “SP” for Specific Plan. The area was formerly an agricultural preserve. There is a pending Public Facility/Open Space Utility Corridor zoning in the near future. Currently the General Plan is Business Park.

Present Use: Electrical Substation and supporting facilities Encumbrances: Unknown – title report not provided. There is an existing road easement (22’ X

988.29’) adjacent to the proposed dedication (Doc. 95-152751). Improvements: Electrical Substation, supporting facilities (office) Topography: Level Utility services: Utility services available. Environmental: Unknown: no specific documentation provided for review. Appraisal assumes

no environmental factors to prohibit future development. Hazardous Materials: None known – appraisal assumes no hazardous materials. Highest & Best Use: Industrial Purpose and Intended Use: This appraisal is provided for internal Edison valuation purposes to determine

the appropriate compensation for a road dedication to the City of Ontario. The intended use is for Edison OS - Real Properties staff and their representatives to establish market value for an 851 Filing with the CPUC. The intended users of this report are the Edison OS - Real Properties staff and their representatives.

Date of appraisal: The date of value is June 13, 2012. The date of the report is June 26, 2012. ACQUISITION DATA Area to be acquired: Permanent Road Easement, containing strip of land 27,672 square feet (28’ X

988.29’) from approximately 122.3 acres larger parcel. Location of acquisition Within parcel: The proposed area of road dedication is located along the existing Milliken

Avenue.


internal Page 6

Severance damages: I have concluded that there is no severance damages as a result of the part acquired or the construction in the manner proposed. In the before and after analysis, there is no market evidence that the reservation for the utility easement will negatively influence the current use of the land.

The highest and best use of the remainder in the after condition remains the same as the larger parcel in the before condition.

Benefits: None noted. VALUATION DATA Scope: The scope of this assignment is limited to:

Aerial photos provided by LandVision, Visual inspection was performed on June 26, 2012.

Consulted relevant public records for the subject property and sales and relevant portion of zoning ordinance with the county planning department representative

(Research local real estate market activity for recent sales of vacant land of similar zoning to the subject property. Where possible, comparable sales were verified when possible with a party to or a real estate broker involved in the transaction.

Secondary sources such as CoStar, MLS and brokers Internet websites were relied upon for data. Supporting data is retained in the

appraiser’s work file Interviewed realtors who are active in the subject’s area and surrounding

markets Analyze the most comparable sales data to determine an appropriate unitary

value estimate for the “unencumbered fee land.” Methodology: In this appraisal, the most applicable approach is the Sale Comparison

Approach. The Cost and Income Approach were not included as the subject property’s portion of land to be acquired is unimproved and does not affect structural improvements.

Sales Comparison Approach – The Sales Comparison Approach is based on the consideration of comparable land sales and is applicable to the valuation of the land to be acquired. Since only a portion of the land rights are proposed to be acquired (and valued), only the land will be analyzed.

Cost Approach – The Cost Approach is based in part on a replacement cost new of improvements less depreciation. The subject is improved with electrical facilities and supporting structures and is adjacent to existing utility easement. The appraisal report is land only and does not include any structural improvements. In addition, market participants for these dedications and reservations typically do not consider the cost approach in the marketplace, the Cost Approach is considered not applicable or appropriate.

Income Capitalization Approach – The Income Approach is based on an analysis of income produced from the property and expenses to the property. The land the easement will encumber is relatively small and unimproved. It generates no income as is required in the Income Capitalization approach. The Income Approach is not part of the scope of this assignment.

Therefore, the only applicable and appropriate method to estimate the value of the unencumbered fee land is the Sales Comparison Approach.


internal Page 7

It is assumed that the easement for the reservation being acquired is a permanent and the dedication is a permanent. It is also assumed that the reservation easement areas required on this property is a strip of land (28’ X 988.2’) along the eastern portion of the parcel over Milliken Avenue.

For the purposes of this appraisal, the unit of comparison used is price per square foot. Considering the subject’ size, this unit is a common unit of comparison used by buyers and sellers of land in this area.

Date of Value: June 13, 2012

Selected Market Data

Market Data discussion:

I researched the subject’s market area for comparable land sales to compare to subject’s parcel size on CoStar & Loopnet. There were limited sales of larger tract for vacant industrial land in Ontario with similar size due to the downturn in the real estate economy. The parameters were then expanded within the Inland Empire Industrial market. The comparable sales range from $3.96 per square foot to $15.57 per square foot. The high end of the range, Sale 8, was an SCE acquisition of adjacent land to their service. The site also required additional utilities needed for the site selling at a higher premium. Sale 1 was given the most weight due to its size, while the rest of the sales were given secondary considerations.

Reservations (Easement):

The typical appraisal method for valuing partial interests (as this easement), is the before and after method. In this method, the appraiser values the larger parcel before the taking (or easement) is implied, and then again after the easement is assumed to be in place. The difference (if any) is the amount attributed to the easement and is the value due to the owner. However, when lesser takings, or grants, are involved where such a before and after value would likely be nominal (due to impact, location, etc.) another approach and formula is often applied.

This formula estimates the value of the part taken (as a part of the whole), adds damages to the larger parcel (if any), subtracts special benefits (if any), and the difference is the value of the property interest in question. This method is based on the knowledge that property ownership is known as a “bundle of rights,” where an ownership can be divided into separate sticks that comprise the “bundle.” For example, certain sticks or rights represent the right to use the surface of the land, or the air rights around an airport, or the subsurface rights to acquire the right to run a pipeline. This latter method has been deemed appropriate and is used in this report. There were no damages or special benefits as a result of this easement.

Comp # Property City A.P.N. Property Address ZoningSale Date

Document Number

Recording Date Sale Price

Land (acre) Land (SF)

Price / Acre

Price / SF

1 Beaumont421-060-006 421-060-007 State Hwy ML Mar-10 127844 3/19/2010 35,108,000$ 155.2 6,760,294 226,219$ 5.19$

2 Eastvale144-010-034 144-010-035 6301-6313 Archibald St A2-10 Aug-11 347438 8/8/2011 $ 6,800,000 39.42 1,717,135 $ 172,501 $ 3.96

3 Ontario 0238-021-73 Ontario Mills Pky @ Etiwanda SP Apr-11 144938 4/12/2011 $ 9,900,000 30.1 1,311,156 $ 328,904 $ 7.55

4 Chino 1027-031-01 6185 Kimball Ave M2 Aug-10 337630 8/19/2010 $ 4,260,168 16.3 710,028 $ 261,360 $ 6.00

5 Mira Loma 160-040-021 Cantu-Galleano Ranch Rd I-P Feb-11 89333 2/28/2011 $ 3,080,563 11.18 487,000 $ 275,542 $ 6.33

6 Montclair 1012-072-10 10653 Ramona Ave M2 Dec-10 540833 12/22/2010 $ 2,300,000 5.73 249,598 $ 401,396 $ 9.21

7 Ontario1050-511-06 1050-511-07 2080 S Cucamonga Ave M2 Jun-11 251931 6/21/2011 $ 1,710,000 4.68 204,008 $ 365,119 $ 8.38

8 Ontario0113-361-27 0113-361-29 1655 S Grove Ave SP Mar-10 122648 3/31/2010 $ 2,225,000 3.28 142,876 $ 678,354 $ 15.57

9 Upland 1007-391-12 Arrow Hwy ML Mar-10 110055 3/22/2010 $ 1,005,923 2.76 120,182 $ 364,597 $ 8.37

Subject Ontario 0218-171-10 13568 S. Milliken AvenueS-P,

Industrial N/Ap N/Ap N/Ap N/Ap 122.30 5,327,388 N/Ap N/Ap


internal Page 8

Easement percentage of fee: Based on the use to which the reservation (easement) will be put and the property rights imposed by the reservation of the utility easement, an appropriate percentage deduction to the previously concluded fee simple value of the property will be estimated. The loss in value has been quantified based on an apportionment of the impact on the subsurface, surface and air right estates of the property. The contributory value of the easement is roughly 75% of the concluded per unit value of the fee value for the property. Reasoning is provided as follows:

75% of fee: The “bundle of rights” of any ownership can be roughly divided into 3 areas: subsurface rights, surface rights and aerial rights. The percentages of fee commonly attributed to the areas are 25% subsurface, 50% surface, and 25% aerial. The proposed reservation will be located along the strip of land, west side of Milliken Avenue at the southeast portion of the parcel. It is assumed the reservation for the utility easement will affect the overhead and underground rights and will significantly encumber the subject. Based on the location of the proposed area, it is assign a percentage of the unencumbered fee value of 75%. “RESERVING unto Grantor, its successors and assigns, an easement and right of way to construct, operate, use, maintain, alter, add to, reconstruct, enlarge, repair, renew, replace, inspect, improve, relocate, and/or remove, at any time and from time to time, both overhead and underground electric lines, consisting of poles and towers made of various materials, "H" frame structures, guy wires and anchors, crossarms, wires, underground conduits, cables, vaults, manholes, handholes, and including above-ground enclosures, markers and concrete pads and other fixtures and appliances and communication circuits with necessary appurtenances, both overhead and underground, for conveying electric energy…”

Reconciliation:

The sales noted above exhibit limited recent market activity for vacant land in the greater area of the subject property. Qualitative adjustments for location date of sale and physical characteristics were considered. Taking these factors into consideration, and weighing the appropriateness, quantity and quality of the data to support a value, it is my conclusion that the sales were determined to be applicable comparable unit values of the unencumbered land. Based on the subject’s utility, topography, location, and parcel size, the subject is anticipated to be at the midrange of value per square foot. Considering the information provided, it is my opinion that the unit value for the unencumbered subject property is $6.00 per square foot. Opinion of Value of the Strip without the reservation

Area X Value per unit = Value of Dedication 27,672 SF X $6.00/SF = $166,032

$166,000 (rounded)

The easement reservation to be located in the part to be taken appears to provide no direct benefit to the subject remainder parcel that can be quantified. The proposed reservation for overhead and underground electrical lines (easement terms) provided found in the workfile as such that in my opinion take 75 percent of the bundle of rights from the fee of the land. There is minimal usage of the area affected by the reservation easement is left to the grantor by the virtue of these terms. As such, it is my professional opinion that 75% of otherwise fee value of the land area within the part take proposed by the easement is lost to the grantor. The grantor retains 25% of the rights.

Per Sq.Ft. Per Acre

6.00$ 261,360$

27,672 0.6353

Percent of Fee Simple Value: 75% 4.50$ 124,525$

$124,500

Concluded Fee Simple Value Per Unit:

Easement Area to be acquired:

Concluded Value for Reservation:

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the implicit cond for exposure ie date of the aped length of timon the market n the effective ysis of past eve

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nditions of main the open mappraisal. Specime the propertyprior to the hydate of the app

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raisal Practice, 2actice, 2010/201

on: Mira Loma Sub

inion that the vground and ovecertification, a

X $6.00 = $166

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$166,000-$124

arket value is tharket. This is alifically, exposuy interest beingypothetical conpraisal; a retrosa competitive a

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6,000 (rounded

lity easements:

4,500 = $41,50

= $41,5

hat a reasonabllways assumedure time is defig appraised wo

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Charles A.uthern CalifornAppraiser #AG

CE OS - Real P

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Page

ad dedication ubject property2012 is:

d)

: $124,500

00

00 (rounded)

le time is d to precede theined as: “The ould have been a sale at marke

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internal Page 10

Assumptions and Limiting Conditions Standards Rule (S.R.) 2-1 of the Standards of Professional Appraisal Practice of the Appraisal Institute requires the appraiser to "clearly and accurately disclose any extraordinary assumption or limiting condition that directly affect" the report and indicate its impact on the value range. In compliance with S.R. 2-1 and to assist the reader in interpreting this report, such assumptions and limiting conditions are set forth as follows:

1. The term "Market Value," as used in this report, is defined as (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 purposes for which the property is reasonably adaptable and available.

(b) The fair market value of property taken for which there is no relevant, comparable market is its value on the date of valuation as determined by any method of valuation that is just and equitable.”5

2. The conclusions and opinions expressed in this report apply to the date of value set forth in

this report. The dollar amount of any value opinion or conclusion rendered or expressed in this report is based upon the purchasing power of the American dollar existing on the date of value.

3. The appraiser assumes no responsibility for economic, physical, or demographic factors that

may affect or alter the opinions in this report if said economic, physical, or demographic factors were not present as of the date of the letter of transmittal accompanying this report. The appraiser is not obligated to predict future political, economic, or social trends.

4. In preparing this report, the appraiser was required to rely on information furnished by other

individuals or found in previously existing records and/or documents. Unless otherwise indicated, such information is presumed to be reliable. However, no warranty, either expressed or implied, is given by the appraiser for the accuracy of such information and the appraiser assumes no responsibility for information relied upon later found to have been inaccurate. The appraiser reserves the right to make such adjustments to the analyses, opinions, and conclusions set forth in this report as may be required by consideration of additional data or more reliable data that may become available.

5. No opinion as to the title of the subject properties is rendered. Data related to ownership and

legal description was provided by SCE sources and is considered reliable. Title is assumed marketable, free, and clear of all liens, encumbrances, easements, and restrictions except those specifically discussed in the report. The properties are valued assuming them to be under responsible ownership and competent management and available for their highest and best use.

6. The appraiser assumes no responsibility for hidden or unapparent conditions of the properties,

subsoil, ground water, or structures that render the subject properties more or less valuable. No responsibility is assumed for arranging for engineering, geologic, or environmental studies that may be required to discover such hidden or unapparent conditions.

5 California Code of Civil Procedure §1263.320.


internal Page 11

7. The appraiser has not been provided any information regarding the presence of any material or substance on or in any portion of the subject properties or improvements thereon, which material or substance possesses or may possess toxic, hazardous, and/or other harmful and/or dangerous characteristics. Unless otherwise stated in the report, the appraiser did not become aware of the presence of any such material or substance during the appraiser's inspection of the subject properties. However, the appraiser is not qualified to investigate or test for the presence of such materials or substances. The presence of such materials or substances may adversely affect the value range of the subject properties. The value estimated in this report is predicated on the assumption that no such material or substance is present on or in the subject properties on in such proximity; thereto that it would cause a loss in value. The appraiser assumes no responsibility for the presence of any such substance or material on or in the subject properties, nor for any expertise or engineering knowledge required to discover the presence of such substance or material. Unless otherwise stated, this report assumes the subject properties are in compliance with all federal, state, and local environmental laws, regulations, and rules.

8. Unless otherwise stated, the subject properties are valued assuming them to be in full

compliance with all applicable zoning and land use regulations and restrictions. 9. Unless otherwise stated, the properties are valued assuming that all required licenses, permits,

certificates, consents or other legislative and/or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based.

10. No engineering survey was made by the appraiser. Except as specifically stated, data relative

to size and area of the subject properties was taken from sources considered reliable and no encroachment of the subject properties are considered to exist.

11. No opinion is expressed as to the value of subsurface oil, gas, or mineral rights or whether the

properties are subject to surface entry for the exploration or removal of such materials, except as is expressly stated.

12. Maps, plats, and exhibits included in this report are for illustration only to serve as an aid in

visualizing matters discussed within the report. They should not be considered as surveys or relied upon for any other purpose, nor should they be removed from, reproduced, or used apart from this report.

13. No opinion is intended to be expressed for matters that require legal expertise or specialized

investigation or knowledge beyond that customarily employed by real estate appraisers. 14. The distribution, if any, of the total valuation in this report between land and improvements

applies only under the stated program of utilization. The separate allocations for land and improvements must not be used in conjunction with any other report and are invalid if so used.

15. Possession of this report, or a copy of it, does not carry with it the right of publication.

Without the written consent of the appraiser, this report may not be used for any purpose by any person other than the party to whom it is addressed. In any event, this report may be used only with proper written qualification and only in its entirety for its stated purpose.

16. Testimony or attendance in court or at any other hearing is not required by reason of rendering

this appraisal unless such arrangements are made a reasonable time in advance of said hearing. Further, unless otherwise indicated, separate arrangements shall be made concerning compensation for the appraiser's time to prepare for and attend any such hearing.

17. In the event that appraiser is subpoenaed for a deposition or judicial or administrative

proceeding and is ordered to produce the appraisal report and files, appraiser shall immediately notify the client. Appraiser shall appear at the deposition or judicial or


internal Page 12

administrative hearing with the appraisal report and files and answer all questions unless client provides appraiser with legal counsel who instructs appraiser not to appear, instructs appraiser not to produce certain documents, or instructs appraiser not to answer certain questions. It shall be the responsibility of client to obtain a protective order.

18. The Americans with Disabilities Act (ADA) became effective on January 26, 1992. I have

not made a specific compliance survey and analysis of the properties to determine whether or not they are in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the properties, together with a detailed analysis of the requirements of the ADA, could reveal that the properties are not in compliance with one or more of the requirements of the Act. If so, this could have a negative effect on the properties' value.

18. Where the value of the various components of the property are shown separately, the value of

each is segregated only as an aid to better estimating the value of the whole; the independent value of the various components may, or may not, be the market value of the component.

19. The appraiser is not qualified to detect the presence of any threatened or endangered species.

The client is urged to retain an expert in this field if there is any question as to the existence of any threatened or endangered species. The value estimated in the report assumes that no threatened or endangered species is present on the property.

20. A Limited Environmental Review was not provided to the appraiser by the client. The appraiser is not an expert in biological or environmental matters and strongly suggests that the client and or future user of the subject site obtain a biological and environmental assessment prior to any activity on the property. The value conclusion assumes that property in compliance with all local, regional, and State environmental approvals, including those required by CEQA through California Public Utilities Code 851. The appraiser assumes no responsibility for any failure of obtaining proper environmental clearances.

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public utilities commission - southern … utilities commission san francisco, ca 94102-3298 june...

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