[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                      THE IMPACT OF OVERHEAD HIGH

                      VOLTAGE TRANSMISSION TOWERS

                      AND LINES ON ELIGIBILITY FOR

                  FEDERAL HOUSING ADMINISTRATION (FHA)

                       INSURED MORTGAGE PROGRAMS

=======================================================================



                             FIELD HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

                         INSURANCE, HOUSING AND

                         COMMUNITY OPPORTUNITY

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 14, 2012

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 112-115




                  U.S. GOVERNMENT PRINTING OFFICE
75-087                    WASHINGTON : 2012
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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                   SPENCER BACHUS, Alabama, Chairman

JEB HENSARLING, Texas, Vice          BARNEY FRANK, Massachusetts, 
    Chairman                             Ranking Member
PETER T. KING, New York              MAXINE WATERS, California
EDWARD R. ROYCE, California          CAROLYN B. MALONEY, New York
FRANK D. LUCAS, Oklahoma             LUIS V. GUTIERREZ, Illinois
RON PAUL, Texas                      NYDIA M. VELAZQUEZ, New York
DONALD A. MANZULLO, Illinois         MELVIN L. WATT, North Carolina
WALTER B. JONES, North Carolina      GARY L. ACKERMAN, New York
JUDY BIGGERT, Illinois               BRAD SHERMAN, California
GARY G. MILLER, California           GREGORY W. MEEKS, New York
SHELLEY MOORE CAPITO, West Virginia  MICHAEL E. CAPUANO, Massachusetts
SCOTT GARRETT, New Jersey            RUBEN HINOJOSA, Texas
RANDY NEUGEBAUER, Texas              WM. LACY CLAY, Missouri
PATRICK T. McHENRY, North Carolina   CAROLYN McCARTHY, New York
JOHN CAMPBELL, California            JOE BACA, California
MICHELE BACHMANN, Minnesota          STEPHEN F. LYNCH, Massachusetts
THADDEUS G. McCOTTER, Michigan       BRAD MILLER, North Carolina
KEVIN McCARTHY, California           DAVID SCOTT, Georgia
STEVAN PEARCE, New Mexico            AL GREEN, Texas
BILL POSEY, Florida                  EMANUEL CLEAVER, Missouri
MICHAEL G. FITZPATRICK,              GWEN MOORE, Wisconsin
    Pennsylvania                     KEITH ELLISON, Minnesota
LYNN A. WESTMORELAND, Georgia        ED PERLMUTTER, Colorado
BLAINE LUETKEMEYER, Missouri         JOE DONNELLY, Indiana
BILL HUIZENGA, Michigan              ANDRE CARSON, Indiana
SEAN P. DUFFY, Wisconsin             JAMES A. HIMES, Connecticut
NAN A. S. HAYWORTH, New York         GARY C. PETERS, Michigan
JAMES B. RENACCI, Ohio               JOHN C. CARNEY, Jr., Delaware
ROBERT HURT, Virginia
ROBERT J. DOLD, Illinois
DAVID SCHWEIKERT, Arizona
MICHAEL G. GRIMM, New York
FRANCISCO ``QUICO'' CANSECO, Texas
STEVE STIVERS, Ohio
STEPHEN LEE FINCHER, Tennessee

           James H. Clinger, Staff Director and Chief Counsel
      Subcommittee on Insurance, Housing and Community Opportunity

                    JUDY BIGGERT, Illinois, Chairman

ROBERT HURT, Virginia, Vice          LUIS V. GUTIERREZ, Illinois, 
    Chairman                             Ranking Member
GARY G. MILLER, California           MAXINE WATERS, California
SHELLEY MOORE CAPITO, West Virginia  NYDIA M. VELAZQUEZ, New York
SCOTT GARRETT, New Jersey            EMANUEL CLEAVER, Missouri
PATRICK T. McHENRY, North Carolina   WM. LACY CLAY, Missouri
LYNN A. WESTMORELAND, Georgia        MELVIN L. WATT, North Carolina
SEAN P. DUFFY, Wisconsin             BRAD SHERMAN, California
ROBERT J. DOLD, Illinois             MICHAEL E. CAPUANO, Massachusetts
STEVE STIVERS, Ohio

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    April 14, 2012...............................................     1
Appendix:
    April 14, 2012...............................................    43

                               WITNESSES
                        Saturday, April 14, 2012

Bennett, Hon. Art, Mayor, City of Chino Hills, California........     5
Borland, Bobbi, Acting Branch Chief, Santa Ana Homeownership 
  Center, U.S. Department of Housing and Urban Development.......    19
Genis, Joanne, Chino Hills resident..............................    11
Goodwin, Robert, President, Hope for the Hills...................     8
Henderson, James L., SRA, J.L. Henderson & Company, on behalf of 
  the Appraisal Institute and the American Society of Farm 
  Managers and Rural Appraisers..................................    33
Kreger, Fred, CMC, President-Elect and Government Affairs 
  Committee Chairman, California Association of Mortgage 
  Professionals..................................................    30
Proffitt, Marion, past President, Tri-Counties Association of 
  REALTORS, on behalf of the California Association of REALTORS    31
Starck, Leslie, Senior Vice President, Regulatory Affairs, 
  Southern California Edison, on behalf of the California Public 
  Utilities Commission...........................................    29
Tyrrell, Denise, on behalf of the California Public Utilities 
  Commission.....................................................    20

                                APPENDIX

Prepared statements:
    Bennett, Hon. Art............................................    44
    Borland, Bobbi...............................................    49
    Genis, Joanne................................................    52
    Goodwin, Robert..............................................    55
    Henderson, James L...........................................    58
    Kreger, Fred.................................................    60
    Proffitt, Marion.............................................    62
    Starck, Leslie...............................................    65
    Tyrrell, Denise..............................................    71

              Additional Material Submitted for the Record

Miller, Hon. Gary:
    Written statement of Stuart A. Gabriel, Professor of Finance 
      and Arden Realty Chair; and Director, Richard S. Ziman 
      Center for Real Estate at UCLA, UCLA Anderson School of 
      Management.................................................    77
    Written comments from residents of Chino Hills...............    85


                  THE IMPACT OF OVERHEAD HIGH VOLTAGE


                    TRANSMISSION TOWERS AND LINES ON

                    ELIGIBILITY FOR FEDERAL HOUSING

                      ADMINISTRATION (FHA) INSURED

                           MORTGAGE PROGRAMS

                              ----------                              


                        Saturday, April 14, 2012

             U.S. House of Representatives,
                 Subcommittee on Insurance, Housing
                         and Community Opportunity,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 10:30 a.m., at 
the City of Chino Hills Council Chambers, 14000 City Center 
Drive, Chino Hills, California, Hon. Gary Miller of California 
presiding.
    Present: Representatives Miller of California, and Royce.
    Mr. Miller of California [presiding]. This hearing will 
come to order.
    Before we start, I would like to make some announcements 
for those who are joining us in the audience. This is an 
official congressional hearing. This is not a town hall 
meeting. There is a protocol we have to follow. We are going to 
have to follow it.
    We would like to thank Financial Services Committee 
Chairman Bachus and Subcommittee on Insurance, Housing and 
Community Opportunity Chairwoman Biggert for granting the 
request to have this hearing today, holding it in Chino Hills.
    This will be made a part of the congressional record. This 
issue will move forward in Congress as the issue is coming up 
throughout the State and throughout the country.
    We were granted permission to convene a very important 
hearing today, and we would like to obligate the order and the 
quorum of the committee here. It is as if we were holding this 
hearing in Washington, D.C. So it is not a hearing where people 
can just jump up and talk or raise questions. We have to follow 
a normal protocol and form, and that is what we are doing 
today.
    I know this issue is of great importance to the community 
here, and there are people in this hearing who are greatly 
impacted, and we want to let you know we understand that, but 
there are certain things we have to do today.
    The comment sheets that you have are provided to you so 
that if you do have a question, you can submit those questions. 
They will be responded to, and they will be made a part of the 
official congressional hearing record. Only those present at 
the hearing today will be issued those forms, and only people 
here today will be responded to.
    So before the hearing proceeds, I would like to introduce a 
very good friend of mine with unanimous consent of the hearing. 
We would like to ask Assemblyman Curt Hagman to stand up.
    [applause]
    Mr. Miller of California. Curt is a very good friend of 
ours. As you know, he has been a champion on this issue. If it 
was just a community hearing, he would be up here. It is not. 
It is Members of Congress only.
    I would like to have the Mayor stand up, and please give 
him a round of applause.
    [applause]
    Mr. Miller of California. The Mayor and the City Council 
have opened this great facility up to us and to the community 
to have this hearing. This is the first hearing of its type in 
the entire region. I am honored to have it here in my district 
in Chino Hills, and we would like to start the hearing.
    As protocol allows, I am going to introduce myself for 5 
minutes for an opening statement.
    Today's hearing is focused on the impact of the high 
voltage transmission towers and lines on eligibility for FHA 
insured finance mortgage programs. The committee granted my 
request to have a hearing today about FHA eligibility here in 
Chino Hills because of the concern raised by residents about 
the high voltage transmission towers and power line structures 
being erected within the utility right-of-way, but in close 
proximity to many homes here in Chino Hills.
    Homeowners have expressed their concern about how the new 
towers and power lines will negatively impact their home 
values, and their ability to access FHA mortgages. Under 
current California law, by the year 2020, electric utilities 
must produce 33 percent of the electricity they deliver to 
customers from renewable energy sources. In order to meet the 
State's mandate, Southern California Edison must upgrade its 
power lines and substations south of the Tehachapi Wind 
Resources Area. The Tehachapi Renewable Transmission Project, 
TRTP, would interconnect renewable wind energy to the existing 
electricity system in order to meet the State's renewable 
energy requirements.
    To comply with State law, Southern California Edison is 
upgrading its infrastructure in the region, including the 
installation of new high voltage lines, towers, and power line 
structures within Chino Hills and other communities. Residents 
of Chino Hills whose homes are adjacent to these new power line 
structures are rightfully concerned about the economic impact 
of these new towers on their home prices. In addition, they 
have raised concerns about whether the Federal Housing 
Administration would allow FHA financing for their homes as a 
result of proximity to the new transmission towers to their 
homes.
    Today's hearing is important for the House of 
Representatives because we oversee the Federal Housing 
Administration's Mortgage Insurance Program. The FHA is 
intended to be self-funded. Premiums paid by the homeowners for 
FHA mortgage insurance are used to pay for the cost of running 
the program and to cover losses when homes default. The FHA 
guarantees nearly 40 percent of homes purchased and mortgages 
originated in the United States alone. The program currently 
issues more than $1 trillion worth of mortgages to more than 7 
million homeowners.
    Given the taxpayers' exposure to the FHA program, the 
Financial Services Committee is very concerned about the 
State's mandate that negatively impacts home values. That is 
why we are here today. We are concerned about the impact on the 
FHA insurance fund should the FHA insurance home loss value due 
to this project, an impact on individuals whose homes are 
impacted by this project. We are also concerned about the 
impact on the fund if home values in the neighborhoods go down 
because FHA is not available to other communities on this 
option.
    The impact of FHA goes beyond those homes adjacent to the 
power lines. Lost value in the area could impact home values in 
the entire community. This could impact values on other FHA 
insured homes.
    Today's hearing will give Congress the opportunity to hear 
from residents of Chino Hills, local elected officials, 
representatives from Southern California Edison, and the real 
estate industry about the FHA policies about insuring these 
homes, and we do look forward to their testimony today. They 
will give us understanding from industry professionals about 
the impact on FHA's insurance fund if the State mandates cause 
home values to decrease, as many residents are concerned about.
    Originally, only witnesses who were invited today are here. 
We had communicated with the Public Utilities Agency, and until 
today we had not heard even a single comment. It was like a 
quiet radio. Multiple attempts were made from our office to 
invite them to the committee, and until this morning we didn't 
know they were going to be here.
    In my opinion, this shows an arrogance from Sacramento. 
When Congress can approach an agency that they should respond 
to and we hear nothing until the day of the hearing, we don't 
even have their prepared statement in advance to know what they 
are going to talk about, and we were going to subpoena them to 
this hearing if we had more time. It got to that degree. 
Everybody else was willing to work with us. This one agency, at 
the last minute, decided to show up.
    In conclusion, I want to make the point that this situation 
is another example of what happens when government runs amuck. 
We wouldn't be here today if Sacramento had not set a mandate 
on renewable energy and the targets they placed on our 
community.
    While it sounds good and we all want to protect the 
environment, it is clear that adequate consideration was not 
made in Sacramento about the consequences of its mandate. Sure, 
we all want to protect the environment. Promoting renewable 
energy is a great talking point, but what about the impact on 
Californians and homeowners? What about their health, safety, 
and the impact on their pocketbooks? What about the economic 
impact that depressed home values have on local communities? 
These things were obviously not considered when they made this 
legislation intact.
    These towers are a direct result of dictates from 
Sacramento to electric providers and how they must provide 
energy to the area. It is not surprising that these residents 
and these homes that are located on easements adjacent to these 
power lines are extremely concerned about the impact of these 
new towers on their home prices.
    Sacramento should have also been concerned when they passed 
the mandate in the first place, and Sacramento should be held 
basically accountable for what they have done to our 
communities. Further, U.S. taxpayers should be outraged because 
this misguided State action could impact home values that 
currently FHA is insuring, causing values to decrease below the 
amount of the loans. This would pose a great risk to the FHA 
fund, and we are here because Congress needs to think about 
what recourse we should use based on the impact placed upon 
you.
    And I yield 5 minutes to my dear colleague, Ed Royce.
    Mr. Royce. Thank you, Chairman Miller. I appreciate that.
    I also would like to recognize Chairman Spencer Bachus for 
holding the hearing, and Subcommittee Chairman Gary Miller for 
chairing this hearing here today, and I certainly would like to 
welcome everyone here.
    I think the impact this has had on the community is of 
importance, and the input of the people here today on the 
topics that are going to affect this community are important. I 
would also say that we hold a number of different hearings 
every week in Washington that affect the economy of the States, 
but from time to time, we are able to have the opportunity to 
get out to these field hearings and hear about the real-world 
impact on families here in Southern California, and this is one 
of those occasions.
    I think the construction of the Chino Hills transmission 
lines has been devastating for the community. When you think 
about the reality of 200-foot towers, 60-feet wide, some of 
them 70 feet from people's backyards, there are roughly 1,000 
homes within 500 feet of this project--1,000 homes. That means 
there are 4,000 people who are within 500 feet of this project, 
and the property values, as a result, have suffered in this 
area.
    According to Mr. Bob Goodwin, a witness on the first panel 
today, property values throughout Chino Hills have dropped 17 
percent, on average. That is since May of 2011, since this 
project became a reality. That is 17 percent throughout the 
City, but for many people who live close, who live adjacent to 
the project, the impact has been far more devastating than just 
the 17 percent drop.
    Today, the government owns or guarantees 97 percent of all 
new mortgages throughout the country. With the government now 
playing such a large role in the mortgage market, it is 
critical that we understand the rules by which FHA and other 
government agencies underwrite these mortgages in areas like 
Chino Hills, which are located near high voltage transmission 
lines.
    These rules often vary from agency to agency. For instance, 
the FHA requires an underwriter to obtain a letter from the 
owner of a tower noting a given dwelling as not being within 
the engineered fall zone of a given tower. What is the 
justification for the varying rules among the different 
agencies? How do these rules impact the loans being insured? 
What are the options for homeowners and communities such as 
Chino Hills? How would alternative routes, such as Chino Hills 
State Park, or burying the power lines underground, as is done 
in Europe, impact property values here in Chino Hills?
    I hope to raise these issues with Ms. Borland from the 
Department of Housing and Urban Development, who will present. 
She will be on the second panel here today, as well as with the 
other witnesses that we will hear from today. And in closing, I 
thank all of the members of the three panels for volunteering 
their time to be here today to present their case with us.
    Again, I thank Chairman Gary Miller for chairing this 
hearing, and we look forward to the discussion here. And I 
yield back, Mr. Chairman.
    Mr. Miller of California. Thank you, Mr. Royce.
    Congressman Joe Baca was also invited to attend. His 
schedule did not allow him to be with us today, but he was 
originally scheduled to be at the hearing.
    I would like to recognize the first panel, if you would 
please come forward.
    First, we have the Honorable Art Bennett, Mayor of the City 
of Chino Hills. Mr. Bennett has over 40 years of experience as 
a property tax consultant and corporate tax manager. He has 
been an instructor and an appraiser of real estate for property 
tax purposes and has testified in the capacity of an expert 
witness in State and Federal court hearings.
    Second, Mr. Robert Goodwin is a resident of Chino Hills and 
president of Hope for the Hills, a nonprofit group of 
approximately 100 members who organized a response to the 2009 
approval of the Tehachapi Renewable Transmission Project of the 
California Public Utility Agencies.
    Third, Mrs. Joanne Genis is a resident of the City of Chino 
Hills, also. Mrs. Genis was a founding member of the Citizens 
for Alternative Routing of Electricity, CARE. In August of 
2011, CARE changed its name to Hope for the Hills.
    Your written statements will be made a part of the record, 
and you will each be recognized for 5 minutes to summarize your 
testimony.
    Mayor Bennett, you are recognized for 5 minutes.

 STATEMENT OF THE HONORABLE ART BENNETT, MAYOR, CITY OF CHINO 
                       HILLS, CALIFORNIA

    Mr. Bennett. Thank you, Congressman Miller, and Congressman 
Royce. I might add, thank you very much for succinctly 
mentioning and outlining what the major concern is of this 
community as a result of the placement of these TRTP Edison 
towers.
    Again, Chairman Miller, Congressman Royce, and members of 
the Subcommittee on Insurance, Housing and Community 
Opportunity, thank you for the invitation to testify on behalf 
of the City of Chino Hills and our community. I am pleased to 
have the opportunity to provide our perspective on the impact 
of the overhead high voltage transmission lines and towers, as 
we will share on the active role the City of Chino Hills has 
played since 2007.
    A high voltage power line proposed in California must go 
through a transmission planning process whereby the California 
Independent System Operator, also known as CAISO, must analyze 
the cost-effectiveness and impact on grid reliability of the 
proposed line. For the project to proceed, the CAISO must agree 
that it will accept the completed line into its control system 
grid. When the CAISO undertook this process for the TRTP line, 
it specifically noted that alternate routes would have to be 
considered in a portion of the route near the City of Chino 
Hills.
    The City of Chino Hills became aware of the TRTP project 
after Edison filed its application in June of 2007. The City 
immediately took a proactive approach in the CPUC siting 
process. We sought to explore the feasibility of alternate 
routes that would not involve towers nearly 200 feet tall in a 
narrow 150-foot-wide right-of-way, directly through the heart 
of the City of Chino Hills. The City did not oppose the green 
energy project itself, but instead attempted to develop a 
viable alternate route.
    The City of Chino Hills assembled a team of transmission, 
environmental, and regulatory experts to explore alternate 
routes at a cost to date of nearly $2.8 million. The City held 
dozens of hearings over a period of nearly 2\1/2\ years with 
CPUC staff, SCE project personnel, numerous State agencies, 
landowners of property adjoining the various alternatives, and 
many environmental groups, particularly those with an interest 
in Chino Hills State Park. These meetings and the work of our 
own consultants enabled the City to propose several viable 
alternative routes for the CPUC's consideration and 
environmental review.
    While our residents have been actively involved since the 
beginning of the process, only after SCE started putting up the 
towers did it become apparent the true enormous size and close 
proximity of the high voltage transmission towers. More and 
more people got involved, and they began a renewed campaign to 
stop the project's construction through their City. This 
grassroots campaign appealed to SCE's board of directors and to 
the CPUC commissioners directly. The City renewed its request 
to the CPUC to halt construction and filed a petition for 
modification with the CPUC, seeking to reopen the case.
    All five CPUC commissioners made personal visits to see the 
tower construction at the invitation of the City. We believe 
these visits were extremely important. The CPUC issued an order 
staying construction of the project. In addition, the president 
of the CPUC issued a ruling ordering SCE to reopen the 
proceeding and provide testimony re-examining whether or not 
other alternatives could satisfy the needs of the project 
without having the negative impacts on the City of Chino Hills. 
SCE submitted this additional testimony earlier this year.
    The City of Chino Hills and SCE engaged in a mediated 
alternative dispute resolution process to attempt to reach a 
settlement on a route design that would allow the project to 
proceed. The parties did not reach agreement.
    The City of Chino Hills strongly supports a single circuit 
underground transmission alternative and has asked the CPUC to 
allow the City to present evidence in support of its 
alternative in evidentiary hearings.
    The impact of the TRTP: The SCE transmission route places 
195-foot-tall, 500kV towers in a narrow right-of-way, only 150 
feet wide. This narrow right-of-way was designed for 75-foot-
high, 230kV structures which have not been energized in 
decades. Nowhere else in the United States has a utility placed 
500kV towers this tall in such a narrow right-of-way.
    Some homes along the right-of-way are located only 75 feet 
from these towers. SCE has seen a substantial number of 500kV 
transmission towers fail in the past, and the risk of personal 
or property damage if any of these towers were to fail is 
extremely high because the right-of-way is so narrow. Residents 
also feel very concerned by the high EMF levels, as well as the 
proximity of such tall and overhanging structures so close to 
their homes and backyards.
    The subcommittee is concerned about the impact of such 
transmission lines on property owners who may be ineligible for 
Federal loans if they are within a utility easement and within 
the ``fall zone'' of a tower. However, the towers SCE has built 
are so tall that many residents who are outside the easement 
are still in the ``fall zone'' and still at risk from tower 
failure.
    The SCE towers increase the risk of fighting and 
suppressing fires as the height of the towers prevents 
firefighters from using helicopters or airplanes to drop fire 
retardant on residential and wildland fires near the 
transmission line route.
    Central to the character of Chino Hills are zoning and land 
use restrictions that avoid ridgetop development to preserve 
views of the many hills and ridges in the community. The TRTP 
towers violate this key land use principle, and have forever 
changed the characteristics of the community.
    In conclusion, the City of Chino Hills has participated 
constructively in the CPUC process for transmission line 
siting, but that process has failed the citizens of Chino Hills 
to date. No high voltage transmission towers as tall as 200 
feet tall should be installed in such a narrow right-of-way in 
a densely populated community. The regulators should have 
adopted an alternative route, as they were warned from the very 
beginning of issues that would arise from trying to shoehorn a 
large high voltage line into a de-energized right-of-way 
intended for far smaller, lower voltage lines.
    We applaud the CPUC for reopening the proceeding and taking 
additional evidence on alternative routes, and we are very 
encouraged that it appears that there are feasible and cost-
effective underground construction techniques that will promote 
national interests and green technology and could eliminate 
many of the negative impacts of the tall towers that have 
threatened our community.
    In closing, we urge the members of the subcommittee to 
express their views to the CPUC and help us convince the 
commissioners that an alternative route should be selected. 
Thank you very much.
    [The prepared statement of Mayor Bennett can be found on 
page 44 of the appendix.]
    Mr. Miller of California. Thank you, Mayor.
    You might notice the timing system has green, yellow, and 
red lights.
    [applause]
    Mr. Miller of California. I don't think you are liked very 
much here, are you?
    Mr. Bennett. I was going to ask--
    Mr. Miller of California. Because of the significance of 
this issue, we are going to be a little more generous with the 
time.
    Mr. Bennett. I sincerely appreciate that.
    I was going to ask you, do you like my chair?
    Mr. Miller of California. I like your chair.
    [laughter]
    Mr. Miller of California. But neither one of us will run 
for your seat, so you are good.
    [laughter]
    Mr. Bennett. Okay. I am very, very comforted by that. But 
you look very nice sitting in that chair.
    Mr. Miller of California. Thank you very much.
    Mr. Bennett. And I love seeing Chino Hills behind you.
    Thank you so much, Mr. Miller.
    Mr. Miller of California. Mr. Goodwin, you are recognized 
for 5 minutes.

   STATEMENT OF ROBERT GOODWIN, PRESIDENT, HOPE FOR THE HILLS

    Mr. Goodwin. Good morning. I would like to thank Chairwoman 
Judy Biggert, Congressman Gary Miller, Congressman Ed Royce, 
Congressman Luis Gutierrez, and the members of the Subcommittee 
on Insurance, Housing and Community Opportunity for this 
opportunity to address the serious matter we have developing in 
Chino Hills.
    My name is Bob Goodwin, and I speak on behalf of Hope for 
the Hills, a community group that was founded in May of 2011 to 
carry on the work of a previous organization, CARE, the 
Citizens for Alternative Routing of Electricity, which started 
in 2007 when this project was announced and unveiled. The 
purpose of both groups was and is to bring awareness to the 
tragedy unfolding in Chino Hills relative to the TRTP project 
being constructed by Southern California Edison.
    This project, planned and built under the disguise of 
``green energy,'' is many things, but healthy and 
environmentally safe it is not. SCE promotes a policy of 
community partnership and caring, yet they have no problem with 
building and energizing 198-foot towers with 500,000-volt power 
lines within 70 feet of residences, and the lines as close as 
40 feet in some cases. This is not only a safety matter. It 
also raises health concerns relative to EMF fallout and the 
consequences associated with prolonged EMF exposure. The 
consequences highlighted in a Department of Health Services 
report from October 2002 stated that, among other things, 
prolonged exposure to this type of an EMF field leads to an 
increased risk of developing brain tumors, childhood leukemia, 
ALS, more commonly known as Lou Gehrig's disease, and an 
elevated number of miscarriages.
    When asked about this study, SCE repeatedly states that 
there is no empirical data that supports this 100 percent. I 
find that rather insulting to anyone and everyone who may have 
to live with this 24/7/365 if SCE is allowed to complete this 
portion of construction through Chino Hills.
    One can argue that there is no empirical data that says it 
does not cause these health issues either. They even advised 
against construction of our community center because cars would 
be parked under these very lines for extended periods, and they 
deemed that unsafe. Yet this company promotes ``safety is top 
priority for our ratepayers.''
    How does this relate to why we are here today? To begin 
with, health and safety are directly related to property 
values. In Chino Hills alone, average property values are down 
17 percent since this project started to become a reality in 
May of 2011. This number can be statistically proven by 
comparing the period 6 months prior to the towers going up, 
when there were 331 closed sales with an average sales price of 
$509,000. Since the towers went up, a total of 10 months, there 
have been 426 sales, with the average price of $421,452, or a 
loss of $87,549, a rate of 17.2 percent. In addition, the 
average number of sales has dropped from 55 to 42 per month. 
Many people have given up even trying to sell and some are just 
walking away from their homes. How is that possible in our 
society? How can a utility company not see that this is wrong?
    While it is true that SCE has owned this right-of-way since 
1941, no one, not even SCE, envisioned 198-foot towers on a 
150-foot right-of-way. Keep in mind, in 1941 there were cows 
and coyotes, bugs and bunnies living in this area. Homes were 
added after the fact; and yes, people bought them knowing the 
right-of-way (ROW) was there. But they were told, many by SCE 
themselves, that this ROW was dormant. With that knowledge, 
people purchased homes with peace of mind, never dreaming a few 
months or years later their homes would be deemed worthless 
when the poles went up.
    Today, we have several homes in the fall zone, where these 
towers have been erected. The average distance these homes sit 
from the towers is 71 feet. When you factor in the 60-foot 
cross arms, if the 500,000-volt lines are strung, these lines 
will be within 41 feet of some homes, 24/7/365, no reprieve, no 
break, no relief to the worry and emotional toll they will 
take.
    It seems that the only agency with enough foresight to 
protect anyone is the Department of Education. They have 
specific guidelines that State towers of this magnitude must be 
a minimum of 350 feet from a public school. Yet today, we find 
ourselves looking at towers as close as 71 feet to homes and 
children's bedrooms. Again the question has to be asked, how is 
this possible? Who will ever buy our homes with a 198-foot 
power pole outside a bedroom window? In fact, FHA will not 
approve a loan for any of the homes inside the fall zone. They 
recognize the risk of having an investment so close to a safety 
hazard such as 500,000-volt power lines on 198-foot towers.
    Chino Hills is suffering from much more than property value 
loss. From personal strain and emotional worry to physical 
illness, SCE has created a community of fear and trepidation. 
Many residents do not know what the future brings. Many have 
lost their equity and peace of mind. Many are looking for 
answers and not finding much hope.
    If you were to simply ask each homeowner to speak, every 
one of them could tell you their personal story, from a 
daughter who begged her newly widowed mother to move to Chino 
Hills to be closer to her and her grandchild, only to finally 
move here and then shortly thereafter come home from surgery to 
see a monster power pole going up outside their bedroom. Then 
there is the mother who spends every waking moment researching 
and fighting this while missing out on family outings, but not 
telling her children why because they are sick of her spending 
all her spare time on this fight instead of spending quality 
time with them, to the grandparents who have babysat their 18-
month-old grandson only once since he was born because they 
have devoted every spare minute of their life to leading a 
group of dedicated, devoted citizens in this fight.
    We come here today to hopefully be heard and taken 
seriously. How can this be happening to our City? How could 
this be happening to anyone in this country? Corporate greed 
comes to mind, ``greed energy'' versus ``green energy.'' The 
City had provided a perfectly sound alternative that would have 
avoided this travesty. Alternative 4CM would have eliminated 
the problem all parties have encountered, but SCE decided it 
was not convenient. Chino Hills also provided an underground 
alternative which SCE essentially tried to price out of 
consideration. We are still hopeful that commonsense will 
prevail and this solution, going underground, will be the 
acceptable alternative.
    SCE is adamant about going above ground at all cost. The 
amount of time, energy, cost, and legal fees they have spent to 
oppose the alternatives would have paid for the underground 
construction. We would also like to know, the estimated $3.6 
million monthly SCE collects from just the Chino Hills 
residents, where is that money being spent? Why isn't that 
portion of their income directly applied to remedy this matter? 
How can our utility dollars support a project that so adversely 
impacts our community?
    Since SCE's position is now and always has been about the 
cost, there is one question they have never answered. The 
proposed alternative through the State park would have been 
10.5 miles shorter. It would have saved 10.5 miles of 
construction costs. So why didn't they consider this an 
acceptable alternative?
    The question has been raised regarding notification from 
SCE relative to this project. Yes, people were notified. The 
approximately 300 residents along the right-of-way were 
advised. Did SCE notify all impacted residents? No. Were public 
hearings held? Yes. Was the public allowed to speak? Yes. Were 
their concerns taken into consideration? I think the results 
answer that question loud and clear, a resounding ``no.''
    I want to make one thing perfectly clear: this is not a 
NIMBY--not in my backyard--issue. We adamantly oppose any 
project such as this that rapes a community and imposes such 
hardships on residents. Any and all utility companies, 
especially SCE, should be held to a much higher standard when 
it comes to community and environment safety. Let us be 
responsible for setting the precedent that states people must 
come before profitability and growth. We are all in favor of 
green energy. However, green energy should not hurt, and this 
green energy project is killing the Chino Hills we have come to 
know and love, all at the expense of profits versus people.
    Why we are the only country that does not mandate projects 
such as this be required to go underground? Why does most every 
other civilized country construct high energy projects 
underground? Are they more technologically advanced than the 
United States? I would think not. Why does it always come down 
to having to adopt a law to do the right thing? Why can't 
companies like SCE do the right thing without being told? 
Whatever happened to commonsense? When something looks good on 
paper but takes a whole different perspective in real life, why 
doesn't corporate America choose to do the right thing? We are 
better than that. We as a community are not afraid of taking on 
Goliath. Someone has to stand up and say this is flat out wrong 
and must be corrected.
    Please help us here today, once and for all, right this 
wrong and do what is right for Chino Hills and its residents. 
Let us show corporate America that people do matter. Let's show 
the country that people and their elected officials can come 
together and make common-sense changes that will protect not 
only our future, but the future of our children and 
grandchildren.
    I thank you for your time this morning. It has been an 
honor and a pleasure to address this committee.
    [The prepared statement of Mr. Goodwin can be found on page 
55 of the appendix.]
    Mr. Miller of California. As you can see, we are being a 
little generous with protocol, but I think that it is 
appropriate.
    [laughter]
    Mr. Miller of California. Thank you, Mr. Goodwin.
    Mr. Goodwin. Thank you very much.
    Mr. Miller of California. I appreciate it. Thsoe were very 
nice words. Ms. Genis, please. You are recognized for 5 
minutes.

        STATEMENT OF JOANNE GENIS, CHINO HILLS RESIDENT

    Ms. Genis. Good morning, and thank you, Chairman Gary 
Miller, Congressman Ed Royce, and subcommittee staff, for the 
invitation to submit my testimony to the subcommittee on the 
subject of the Tehachapi Renewable Transmission Project, also 
known as the TRTP, and referred to as ``the project'' 
throughout my testimony.
    My name is Joanne Genis. I am a mother, wife, and board 
member of Hope for the Hills, which is a community-based 
organization formerly known as CARE, Citizens for Alternate 
Routing of Electricity. I am a long-time resident of Chino 
Hills, and my husband and I moved here 23 years ago because we 
wanted to raise our family in a safe, friendly, youth-oriented 
City with a rural atmosphere. We love this City, and especially 
the beautiful view of the snow-capped mountains during the 
winter.
    This project has not only affected the City due to the 
aesthetics, property value loss, and safety and health issues, 
but has also affected my life emotionally. It will be 5 years 
next month that I have been fighting this injustice served upon 
our City, and I cannot count the hours of sleep I have lost 
over worrying about what is going to happen to my nest egg and 
the safety of my family. My stomach has been in knots, and I am 
keeping TUMS in business. It has been an emotional 
rollercoaster not only for myself, but for many others in this 
community.
    In April of 2007, SCE sent out notices to the residents 
within 250 feet of the easement, informing them about the TRTP. 
They stated they would be removing the existing 98-foot towers, 
220kV lines, which have been de-energized since the early 
1970s, and replacing them with 198-foot towers, 500kV lines in 
an easement only 150 feet wide, which is too narrow for this 
size of a project. This will place the towers as close as 70 
feet to many homes; and, yes, my home is in the fall zone of 
one of these towers. This is not safe, especially since they 
are near several earthquake faults.
    The DEIR/EIS's visual impact assessment is fatally flawed. 
The visual simulation photographs of the project did not 
provide a fair representation of the neighborhoods that have 
been impacted by the poles. On November 10, 2011, the 
commission made a comment that the towers had a visual and 
economic impact far more significant than envisioned at the 
time the Certificate of Public Convenience and Necessity was 
issued.
    In May of 2009, the City of Chino Hills requested some data 
from SCE regarding the 195-foot TSP, which is the tubular steel 
poles, and the question was has SCE ever used 195-foot TSPs for 
the installation of a 500kV transmission line? Jerry 
Amalfitano, principal engineer at SCE, answered the question 
with ``No.'' So basically, SCE will use Chino Hills as their 
lab rats or a petri dish for the testing of their towers.
    In the final EIR, it concluded that there was no 
significant impacts on property values as the result of the 
construction of the project. It went on to state that the 
impact to nearby homes is very small and typically disappears 
within 5 years. I would like SCE to tell this to my neighbors, 
the Seagraves, who listed their immaculate and newly remodeled 
home in September of 2011 for $359,000, and after they had over 
90 interested parties viewing the home and visually saw the 
tower directly behind it, these parties turned around and left. 
They have continued to drop the price, and the current listing 
is $317,000. According to the listing agent, it will probably 
drop down to the high $200,000s, which is about a 20 percent 
loss of value. And then there's the problem of trying to 
finance the loan with FHA.
    As I am standing here, testifying before you today, the 
Seagraves are moving out. They are taking their two young 
children and walking away from their dream home that they have 
worked so hard for. The emotional toll has drained them beyond 
belief and they are done putting their lives on hold. How many 
more families are going through the same? I have documents I 
have submitted with my testimony that state where another 
neighbor's house fell out of escrow because of the project. So 
for Edison to state there is no property loss, I beg to differ.
    I have addressed many more issues and concerns regarding 
EMFs, fire hazards, and additional property losses in the 
longer version of my testimony submitted to the committee. 
Yesterday, we had a terrific thunderstorm. It was reported by a 
reliable source that he actually saw the lightning strike the 
top of the tower behind Crossroads Park. Unfortunately, he did 
not catch it on film. Everything happened so fast. I have never 
seen a storm like this in Chino Hills. He was approximately 400 
feet away from the tower, and he could feel the hair on his 
arms stand on end. What would happen if the lines had been 
strung? These monstrous towers are lightning rods and accidents 
waiting to happen.
    The talk of expanding the right-of-way is not an option. I 
do not have plans or wish to move. There are over 1,000 homes 
within 500 feet of this project. So, if you buy out some, you 
are extending the problem. The street I live on, Garden Court, 
has two ways in and out, and both of these roads will have 
500kV lines run across them. We cannot avoid these lines. You 
might say we are trapped. When I entertain guests, this is 
usually the first words I am greeted with: ``What in the heck 
is that?'' And then the story begins. It's embarrassing to live 
near these towers. I see one right out my front door and a row 
of them out my upstairs bedroom window. I am surrounded.
    When the City of Chino Hills took their lawsuit to the 
Appeals Court, I still remember the comment that Judge Jeffrey 
King made to Edison's lawyer. He told him that just because the 
CPUC gives you their blessings, you think you can do anything 
you want to? That judge got the picture.
    The damage cannot be mitigated, and the emotional turmoil 
that many of the residents are facing due to losing their nest 
eggs or worrying about their families' health and safety is all 
due to SCE's need to put profit over people. I have been 
fighting for years now to try and stop this project from 
ruining so many lives and mutilating this City. I have listened 
to their heartfelt stories. I have shared tears with them. I 
have encouraged them to fight this injustice. I am standing 
before you today representing not only myself, but all of them, 
too. One good thing that came out of SCE's arrogance is that 
they truly have brought this community together. I am not 
against green energy, but when it's about the type of green 
that lines someone's pockets, that is the green I am against. 
Green energy shouldn't hurt.
    I would like to thank the committee on behalf of the 
residents of Chino Hills for coming to California to hold this 
hearing and listen to our testimony, and I apologize for my 
emotions.
    [The prepared statement of Ms. Genis can be found on page 
52 of the appendix.]
    Mr. Miller of California. Thank you very much.
    Members of the committee will each be recognized for 5 
minutes for questions in the same order as opening statements.
    Mayor Bennett, can you please tell us how the City was 
involved in the process and the ultimate decision to build the 
power lines through Chino Hills?
    Mr. Bennett. We have been involved since roughly 2007, 
shortly after we found out that the TRTP lines were going to be 
put into the--be extending that power, bring that power from 
the Tehachapi area down to Southern California.
    We initially responded to the fact that there had to be 
other alternatives. As both of these witnesses have spoken to, 
the existing right-of-way that they have chosen to put the 
power lines into contained roughly 75-foot-tall, 230kV lines 
that had been dormant for, as far as we could tell, around 30 
years. No one who lived in that area ever thought that it would 
be any different.
    Back in 2009, we thought we had come up with a viable 
alternative, Route 4CM, which would have taken the lines and 
would actually have moved them, and I cut this from my earlier 
presentation, but the preferred alternative, which was 4CM, 
would have interconnected the TRTP line to an existing 500kV 
line that crosses through the center of Chino Hills State Park. 
But by more efficiently aligning the transmission grid, there 
would have been fewer transmission lines within the park than 
there are today if 4CM had been built.
    This alternative would have also eliminated the need for 
all transmission towers within the City of Chino Hills. The 
City's alternate 4CM was supported by a variety of 
environmental groups, including the Sierra Club and Hills for 
Everyone, the group responsible for the creation of Chino Hills 
State Park.
    So we tried, to no avail, to get an alternative that would 
have skirted the City of Chino Hills, and would have created 
far less transmission lines. The thought apparently--the 
feeling we received from that was there was more concern about 
animals in the State park than there was about the residents in 
the City of Chino Hills.
    Mr. Miller of California. I'm well aware of that sentiment.
    Mr. Bennett. So I hope that answers your question.
    Mr. Miller of California. Some of the questions to the 
audience might appear repetitive based on the opening 
statements, but they are very important for us to have these 
for the record.
    Mr. Goodwin, what effect has the TRTP had specifically on 
your neighborhood?
    Mr. Goodwin. My neighborhood is not directly impacted by 
these towers. From the street that I live on, the residents--
    Mr. Miller of California. Associated neighborhoods that 
would be appropriate?
    Mr. Goodwin. It has had a significant impact on the 
neighborhoods. The neighborhoods have become less visited, 
less--people are--to Joanne's comment, when people come over, 
we end up spending the evening talking about the towers. Going 
around the neighborhoods visiting people, there are huge 
concerns--people aren't finishing construction projects, people 
are not finishing upgrading or painting. They are not making 
their home a home. They don't know what to expect. There is a 
fear of the uncertainty.
    The impact it has had on residents City-wide is one of fear 
and trepidation, as I mentioned. Anybody you talk to, anybody 
who lives along the right-of-way, anybody who is impacted by 
these lines, they really don't know what to do. Their lives are 
virtually on hold.
    Mr. Miller of California. Your opinion seems to be they 
realize the current impact placed upon them, and they are very 
concerned about putting any more money into their home because 
they don't know what the impact in the future might be?
    Mr. Goodwin. Exactly. That is a statement of fact. We know 
several friends and residents who had begun to remodel their 
homes, but they have stopped.
    Mr. Miller of California. They have stopped, yes.
    Mr. Goodwin. And again, there are residents who have 
recently had--they refinanced their homes to find exactly what 
I stated in my testimony, that appraisals that they had done 12 
to 18 months ago versus today are down 18 to 20 percent. That 
is a fact.
    Mr. Miller of California. Ms. Genis, do you know 
individuals specifically who have been impacted in trying to 
sell their house based on the TRTP?
    Ms. Genis. No. Well, I mentioned one, Tammy Seagraves, and 
my next-door neighbor who, actually the house sold for 
$283,000, and it was originally--it was in my original 
testimony, I think, for $385,000. And now, actually, it is a 
rental.
    The gentleman who bought the home knew about the project, 
and that is why it took quite a while to sell, and he actually 
came in after he saw the tower and he came up to me and he 
said, ``Joanne, what can I do to help to get that tower out of 
here?'' And that is when I told him, ``Just join us.''
    I am a fine example of not spending any money on my home. I 
have a water leak. Half of my floor is torn up in my kitchen. 
Why do I want to bother to put--what do I put in? A 5-year 
warranty? A 25-year warranty?
    Many other neighborhoods are the same as my neighbors. I am 
not going to Lowe's. The money. It is the economy. It is 
affecting Lowe's. I'm sure a lot of people are doing the same 
thing. They are holding onto the money, seeing what is going to 
happen here, do we want to invest any more, a dime? I don't 
want to put another penny into my home until I find out what is 
happening here.
    Mr. Miller of California. I understand.
    Mayor Bennett, for the record, what is the current status 
of the project, and what would you like to see done?
    Mr. Bennett. The current status is I understand that there 
are going to be some meetings very soon, within the next couple 
of weeks. We will have some additional discussions with the 
CPUC staff, and hopefully with Southern California Edison.
    We have come to the conclusion that there is really only 
one viable solution at this point in time, and that is to go 
ahead and go single circuit, single cable, or possibly even two 
cables, but single circuit underground to take care of this. 
That way, we eliminate much of the scarring that has eventually 
happened in our City.
    We have a beautiful City. As I was mentioning about the 
hillsides and everything else, just envision a 150-foot-wide 
swath going 3\1/2\ miles right through the middle of our City, 
next to parks, churches, residences, and in each one of those 
cases, no one realized the severity and the enormity of this 
whole project until those first towers went up.
    And that is the other thing. Those towers went up in a 
very, very short span of time. We really believe that because 
we had a case pending in appeals court, the idea was, let's get 
these towers up as quickly as we can before that decision comes 
down. And luckily we got one of the most hideous ones, which 
you can see right down the end of this street if you are going 
south on Peyton Drive, which is a lattice tower. That lattice 
tower is being put up on top of about a 60-foot knoll. So now, 
we are talking about 260 feet in the air if that thing were to 
be built, just because it is an angle point, because every time 
there is an angle in one of these lines, it has to have a 
lattice tower. It has totally not only physically but 
emotionally scarred this community.
    We feel at this point in time that the CPUC, when they made 
their original findings and said it was okay to put up these 
200-foot towers, no one could have perceived what it was going 
to actually be, not just visually but the impact financially 
and, again, emotionally. They have torn up our community.
    We are really at the--right now, our future depends an 
awful lot on hearings like this and the CPUC to right this 
wrong. We are not against green energy. We do not hate Southern 
California Edison. We know that they have to go and transmit 
this power. They have a mandate, as you mentioned in your 
opening statement. It is very unfortunate that a State can come 
in, create a mandate, and force a public utility. We have no 
choice in this area.
    Mr. Miller of California. I know that.
    Mr. Bennett. Southern California Edison is our provider.
    Mr. Miller of California. I know.
    Mr. Bennett. If we could put them in lieu of someone else, 
believe me, it would have happened a couple of years ago. But 
the reality is we need--
    [applause]
    Mr. Bennett. No, no.
    Mr. Miller of California. We do need to have some protocol 
in the answer. I know you agree. We totally--and I am not 
trying to be rude. We really understand that, but we need to 
have some form of order in the audience.
    Mr. Bennett. But in conclusion, it is really up to us. Our 
future is in the hands of the CPUC, and hopefully they will 
look at the reasonableness of what we believe is an alternative 
that will take away this unsightly scar that has affected us 
and go underground. So, that is our ultimate goal at this point 
in time.
    Mr. Miller of California. And many of us remember when the 
City had one way to get to the 60 freeway?
    Mr. Bennett. Yes.
    Mr. Miller of California. Plus Carbon Canyon Road, and we 
were higher back then, and how it has changed. I remember 
getting about $6.8 million to improve Peyton, and now you have 
a good view of a tower.
    Mr. Bennett. Yes.
    [laughter]
    Mr. Miller of California. That was really very nice.
    Mr. Bennett. Thank you so much.
    Mr. Miller of California. Congressman Royce, you are 
recognized for 5 minutes.
    Mr. Royce. Thank you, Mr. Chairman.
    Mr. Goodwin, Mayor Bennett testified as to the impact that 
this project has had in terms of lower home values, and one of 
the consequences of that, of course, is that it makes it very 
difficult, in some cases impossible, for people to refinance 
their homes, or even for some homeowners to sell their homes 
when you have that type of precipitous drop in value.
    The consequences of that are the consequences of a mandate 
that came from Sacramento and the way in which that mandate has 
been implemented. But we are hearing also from those who say 
that the proximity of a home to transmission lines rarely 
impacts the value.
    You have examined this issue, Mayor Bennett and Mr. 
Goodwin. I would like to give you the opportunity to respond 
for the record. When they argue that the effect on the value of 
homes is de minimis or tends to disappear over time, give me 
your observations on that. You have looked at the Tehachapi 
project. What do you say to that?
    We will start with Mr. Goodwin.
    Mr. Goodwin. I say immediately today, we know that is not 
true. We know that homes are down 17 percent in the 10 months 
since this project has been started.
    If you go back prior to the project starting, yes, home 
values were down because of the economy. Home values were down 
because of the market impact from 2008, I believe it was. But 
statistically, in the 10 months since the towers have been 
built, we know for a fact home values are down 17 percent. That 
is on average. We have some homes that would sell in the 
millions of dollars. We have some homes that would sell for 
$300,000, $400,000, $500,000. So, 17 percent is a relative 
number. But when you are talking about a family who has 
invested 20 years in the City, bought when the prices were 
lower, this was their retirement, and they they are now out of 
pocket an average of $85,000, that is a huge hit.
    Ultimately what happens in cities like this, if 
homeownership diminishes, if it is looked at as an investment 
community or an investment opportunity, we go from a City like 
we are today to a much lower economically scaled community. 
That not only impacts the City finances, it impacts local 
sales, it impacts local shopping areas, it impacts the entire 
county, and ultimately, there are less tax dollars for the 
State.
    So in the big picture, the perception that over time this 
goes away, this will not go away. You will not see a dramatic 
increase in property values if the market turns around, when 
the market turns around, to where it was 10 months ago, or even 
18 months ago, before this project began. It is a huge impact. 
We see it. We talk to people. We know about it from personal 
stories. It is not pie in the sky science. It is factual 
situations that can be proven and shown. We have REALTORS who 
can produce this data immediately.
    Mr. Royce. And I will ask Mayor Bennett, the assertion 
here, are homes nearest to the towers adversely impacted? Do 
you agree with the assessment there of your colleague?
    Mr. Bennett. Yes. Most definitely, the properties that are 
adjacent to this right-of-way are most severely impacted. But 
as we have heard in the testimony so far today, this is a value 
issue that is actually going across-the-board, across our 
entire community. People are not going to want to live in an 
area, come to a new area that used to be able to entice so many 
people because of the rural atmosphere and all of the wonderful 
things that we have, the fine schools, the shopping, all of 
those issues. Many years ago, after incorporation, we were 
considered a bedroom community and we couldn't get developers 
to come here.
    We subsequently--people woke up to the fact that our 
demographics, being the 6th highest median income in the United 
States, there are over 75,000 people, that we had the fiscal 
wherewithal to support most any business that wanted to come to 
town.
    With business, you usually add rooftops. Developers, not 
only just because of the economy right now, but no one is 
building in this area. That is one thing. So you would think, 
okay, if there is no building, and supply and demand, people 
still want to move into the community, you would think there 
would be a higher price that would be brought for any sale or 
any home that is selling. But that is not happening.
    It is not just because of the economy. How many times--look 
back at the interest rates. I have been in the property tax 
field for 41 years. Values right now should be on the rise 
because look at what has happened to the interest rates. We are 
at absolute historic low interest rates. People back in 1983 
were paying 13, 15, 16 percent interest rates. Obviously, that 
was an impact on people buying and selling homes. Right now, 
people who were in apartments are moving out again and buying 
houses because the interest rates are so low.
    So, yes, it is impacting not just the properties adjacent 
to the right-of-way.
    One thing I would like to do, if I may have liberty, 
Congressman Royce, is I will put on my professional hat for a 
moment. I have been doing property tax work for 41 years. I 
testify in State and Federal court dealing with property tax 
valuation. Property tax valuation and market value, we have to 
find what is the market value of each one of those lien dates. 
There are three ideals and three things that affect value of 
property. There is economic, there is functional, and there is 
physical deterioration.
    Economic obsolescence is factors outside of a property that 
have an adverse effect on the property. I am getting reductions 
from many of my clients right now. Because of the economy, 
their production is down based upon capacity. But in the case 
of single-family residential, things like this, anything that 
affects the value of a property or the perception, the 
perceived value of a property by virtue of the fact that this 
is a negative thing is economic obsolescence. Everybody knows 
it exists. The hard part is quantifying it.
    But the long answer to your question is most definitely 
that these towers have had a very, very negative impact on the 
values. Who knows just what the total quantification will be. 
Their values are not going to go up anytime soon. If those 
towers start being built again and lines go up, the value is 
going to be cut even worse.
    Mr. Royce. I have one last question for Mrs. Genis. Let me 
go back to your testimony. You mentioned that you were within 
the fall zone of the towers, and HUD says the engineered fall 
zone is not necessarily the height of the towers. Do you have a 
sense of whether your home is within the engineered fall zone 
of the towers? The reason it is important is because the 
potential fall zone can determine whether the FHA will--
    Ms. Genis. This is my house. If this tower falls, it will 
land on my property.
    Mr. Miller of California. That answers the question.
    Mr. Royce. And how close is that tower to your house?
    Ms. Genis. It is approximately 125 to 130 feet.
    Mr. Royce. And how tall is the tower?
    Ms. Genis. Two hundred feet.
    Mr. Royce. Thank you very much.
    I yield back, Mr. Chairman.
    Mr. Miller of California. Thank you, Mr. Royce.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 30 days for Members to submit written questions to these 
witnesses and to place their responses in the record.
    I want to note that we do see the tears in the audience. So 
when we do try to preserve protocol, we want you to know that 
we do recognize that and we are not trying to be insensitive to 
that.
    I want to thank our first panel.
    Mr. Bennett. Thank you very much.
    Mr. Goodwin. Thank you.
    Ms. Genis. Thank you.
    [applause]
    Mr. Miller of California. Our second panel will please come 
forward.
    Ms. Bobbi Borland is the Acting Branch Chief of the Santa 
Ana Homeownership Center under the purview of the U.S. 
Department of Housing and Urban Development. She is a real 
estate appraiser.
    We had originally requested Mr. Paul Clanon, the executive 
director of the California Public Utilities Commission, to 
attend. He sent Denise Tyrrell as a representative to be with 
us today.
    I ask the witnesses to come forward.
    Ms. Borland, thank you for being with us today, and also 
Ms. Tyrrell. Without objection, your written statements will be 
made a part of the record. You will each be recognized for a 5-
minute summary of your testimony.
    I recognize Ms. Borland for 5 minutes.

  STATEMENT OF BOBBI BORLAND, ACTING BRANCH CHIEF, SANTA ANA 
  HOMEOWNERSHIP CENTER, U.S. DEPARTMENT OF HOUSING AND URBAN 
                          DEVELOPMENT

    Ms. Borland. Representative Miller, Representative Royce, 
and members of the subcommittee, thank you for the opportunity 
to testify today on the impact of overhead high voltage 
transmission towers and lines on eligibility for Federal 
Housing Administration (FHA) insured mortgage programs.
    I would like to take the opportunity to explain FHA's 
guidelines regarding FHA insurance of single-family properties 
located near utility transmission lines.
    In this case, based on FHA's current knowledge regarding 
the towers, and FHA's requirements applicable to this matter, 
properties that are near or abut the high tower transmission 
line easements would be eligible for FHA insured financing.
    To the extent that homes are sited on or within the 
easement, the lender must obtain clearance from the utility 
that the home is not within the tower's fall zone.
    The Homeownership Center Reference Guide provides the 
requirements which must be met in order to ensure eligibility 
for FHA mortgage insurance with regard to a number of issues, 
including proximity to overhead high voltage transmission 
towers and lines.
    It may be helpful for me to cite explicitly relevant 
sections.
    With regard to new FHA originations, the guide provides 
that ``the appraiser must indicate whether the dwelling or 
related property improvements are located within the easement 
serving a high-voltage transmission line, radio/TV transmission 
tower, cell phone tower, microwave relay dish or tower, or 
satellite dish,'' which is radio, TV cable, etc.
    ``If the dwelling or related property improvement is 
located within such an easement, the DE Underwriter must obtain 
a letter from the owner or operator of the tower indicating 
that the dwelling and its related property improvements are not 
located within the tower's engineered fall distance in order to 
waive this requirement.
    ``If the dwelling and related property improvements are 
located outside the easement, the property is considered 
eligible and no further action is necessary. The appraiser, 
however, is instructed to note and comment on the effect of 
marketability resulting from the proximity to such site hazards 
and nuisances.''
    ``In addition, if a property already had an FHA-insured 
mortgage and high voltage towers were subsequently installed, 
FHA insurance of the mortgage would continue.''
    Within the 91709 zip code, which comprises most of Chino 
Hills, approximately 3 percent of homes have mortgages insured 
through FHA. We do not have data to indicate the proximity of 
these homes to the transmission towers.
    It has also been suggested that these transmission towers 
pose some risk to FHA. FHA insured mortgages are based on the 
appraised value of the property at the time of origination, as 
determined by an independent fee appraiser who appears on the 
FHA Roster and in accordance with FHA guidelines. And, as I 
noted, the appraiser must note whether the property is located 
within the transmission tower easement.
    FHA does collect a limited amount of appraisal data but 
does not track valuation or home price trends to the zip code 
level.
    In terms of assessing risks to FHA as a result of the 
transmission lines, it is important to note that payment 
default may have many causes, and there is simply no easy way 
to identify whether a default was driven by property value 
declines attributed to nearby transmission lines.
    Thank you again for the opportunity to testify today. FHA 
is pleased to serve as a resource to help homeowners and real 
estate professionals understand FHA policy in this area, and I 
would be happy to answer any questions you may have.
    [The prepared statement of Ms. Borland can be found on page 
49 of the appendix.]
    Mr. Miller of California. Thank you.
    Ms. Tyrrell, you are recognized for 5 minutes.

STATEMENT OF DENISE TYRRELL, ON BEHALF OF THE CALIFORNIA PUBLIC 
                      UTILITIES COMMISSION

    Ms. Tyrrell. Good morning. First of all, thank you very 
much for allowing us to participate.
    Mr. Miller of California. Could you hold the microphone a 
little closer? I think we are having difficulty hearing you.
    Ms. Tyrrell. Is that better?
    Mr. Miller of California. Thank you.
    Ms. Tyrrell. I wanted to apologize and explain for my 
organization. We did speak to a Mr. Chase Burgess at your 
office on April 11th, and we did inform Mr. Burgess by email 
and phone that I would be coming in the executive director's 
stead.
    My name is Denise Tyrrell. I am a Southern California 
representative for the Public Utilities Commission, and I 
received this invitation on the 11th. The materials I have are 
dated the 11th of April. So I apologize for any 
misunderstanding that may have taken place.
    Mr. Miller of California. There must have been a 
communication error on your side because we have been 
repeatedly--I don't want to take up your time, but we 
repeatedly requested.
    Ms. Tyrrell. I apologize for that, sir.
    Mr. Miller of California. That's fine. I didn't mean to 
interrupt you.
    Ms. Tyrrell. For my case, I found out about it on the 11th. 
So I am here, and I am gladly here, and I do agree that Chino 
Hills is an exceptionally beautiful community.
    I do need to point out to you that we have an application 
for re-hearing, and several petitions for modification of D09-
12044 have been filed with the Commission that seek changes in 
the portion of the line that runs through Chino Hills, and the 
commissioners have stayed construction of the segment of the 
transmission lines. I point this out to you because it 
restricts--I cannot speak to that area because it is still 
under consideration by the commissioners.
    I would like to give you a little background on what this 
whole entire project is about. The need for the transmission 
line arose from the mandates of the California Renewables 
Portfolio Standard, which at the time required investor-owned 
utilities to procure 20 percent of their total retail sales 
from renewable energy. That has since gone up to 33 percent.
    New transmission facilities are required to interconnect 
remote areas of high renewable power generation, such as the 
Tehachapi Wind Resources Area, to areas of high load in order 
to assess the ability of the wind power to contribute toward 
meeting the State's mandated RPS goals.
    The CPUC ordered the formation of the Tehachapi 
Collaborative Study Group to develop a comprehensive 
transmission plan. The decision also required SCE to file a 
certificate of public convenience and necessity.
    SCE identified a phased development plan, called the 
Tehachapi Transmission Project. The TTP was implemented in 
separate phases. The three primary objectives are to provide 
the electrical facilities necessary to reliably interconnect 
and integrate in excess of 700 megawatts and up to 
approximately 4,500 megawatts. To put that in perspective, that 
would be the equal of approximately nine power plants. Further, 
to address the reliability needs of the California Independent 
System Operator, CAISO, controlled grid due to projected load 
growth in the Antelope Valley; and address the South of Lugo 
transmission constraints, an ongoing source of concern in the 
Los Angeles Basin.
    SCE's application to the CPUC routed a portion of the 
segment through Chino Hills, taking advantage of an existing 
transmission right-of-way that traversed the City. The PUC 
worked diligently to develop and assess the alternatives, 
including a partial underground alternative through Chino Hills 
and various re-routes through Chino Hills State Park.
    The EIR presented a clear comparison of these alternatives 
to SCE's proposed project and formulated mitigation to reduce 
the impacts of each alternative. In reaching its decision, the 
CPUC considered all information presented in the EIR and 
information presented during the proceedings, including 
testimony provided by the City of Chino Hills and other parties 
to the proceeding. In addition, public comments, including 
opposition expressed by Chino Hills residents, were given 
thoughtful consideration by the PUC.
    The PUC's decision followed a long and extensive 
investigative process and was based on the results of 
substantial data collection and analysis. The commissioners 
considered a wide range of issues, including technical, 
environmental, social, and economic factors. As commonly 
occurs, not everyone agreed with the decision, but it was 
clearly based on careful consideration of a significant amount 
of information, analysis, and testimony.
    [The prepared statement of Ms. Tyrrell can be found on page 
71 of the appendix.]
    Mr. Miller of California. Thank you very much.
    For the record, and to clear up any confusion, the staff 
started contacting the CPUC at the beginning of the month, and 
it has nothing to do with you, Ms. Tyrrell. You are just here 
to testify. We sent repeated emails. We never received a 
response. We even sent a formal letter. We never received the 
truth-in-testimony form to let us know who was going to testify 
before us, as required by the committee rules. So just for the 
record, I needed to state that.
    I have always had problems with unfunded mandates by 
government. That is when government passes a law or makes a 
rule or enforces some requirement on the private sector, 
whether it be a business or homeowners. When they do that, and 
they don't bear the cost and the burden placed on those 
individuals, I know Congressman Royce and I both have a real, 
real problem with that.
    The question for FHA, Ms. Borland, we talked about the fall 
zone and the easement. If a home is outside of the easement 
area but within the fall zone, does that have an impact on 
FHA's ability to loan?
    Ms. Borland. Our guidelines state that it does not impact 
the FHA loan. It would be up to the individual lender. We have 
our guidelines, and they have overlays that they may place on 
our guidelines. But as far as our guidelines, that would not--
    Mr. Miller of California. It doesn't stop you from making 
the loan?
    Ms. Borland. Right.
    Mr. Miller of California. But in your testimony, I think 
the problem you have to acknowledge is the appraiser from FHA 
is going to go out there, and they have to recognize that 
tower, and they have to also recognize if it is in the fall 
zone, what impact that might have on the home. Is that a fair 
statement?
    Ms. Borland. That is a fair statement. It would be an FHA 
roster appraiser, and they would have to discuss in their 
appraisal report any and all impact that would have on the 
property.
    Mr. Miller of California. So even though there might not be 
a legal preclusion from FHA making a loan, there is most likely 
a high probability of it having an impact on the value of that 
home, and the impact then would transfer to the lender, who is 
also going to look at that, and their appraisers might also 
place additional impact. That is not an attack. Is that a 
factual statement?
    Ms. Borland. I can't really comment on the lender's--
    Mr. Miller of California. Is that a possible serious--
    Ms. Borland. It is possible. And I do want to clarify that 
FHA does not make loans. We insure loans.
    Mr. Miller of California. I understand that.
    Ms. Borland. Okay.
    Mr. Miller of California. You are insuring the loan that is 
made by a lender.
    Ms. Borland. Correct.
    Mr. Miller of California. But the process--perception 
becomes reality in many cases with an appraiser. So, an 
appraiser goes onsite, and they look at this monster that 
should be out of some science fiction movie behind a house, and 
they say that if something might occur--maybe it hasn't, maybe 
they have no record of that ever in the past, but things do 
happen. If that monster were to tip over, or you had a high 
wind in an area that caused the line to detach and that would 
be also in the swing or fall zone, that probably is going to be 
taken into consideration by some appraiser if they are a 
qualified appraiser. Is that a fair assumption?
    Ms. Borland. That is a fair assumption.
    Mr. Miller of California. Okay. So although we might say 
that FHA is trying to do their job because they are trying to 
service the citizens of this country, but also then they have a 
liability associated with any loss that might occur to the 
citizens who pay taxes, and if a loan defaults, the insurance 
has to come forward, and if there is a situation that is 
occurring today in the housing market where home buyers have 
gone down, and even though FHA has the lowest default rate of 
any institution, whether it is Fannie or Freddie, or the 
private sector, the default rate isn't much lower, there still 
is an impact today occurring because of just the decline in the 
market.
    So it makes me believe that the individuals in this room 
and in many other cities around California and other States 
have also experienced a decline in their home values. Now, when 
we go out to have a lender make a loan, the lender goes out 
with their appraiser and they say this house has already lost 
``X'' amount of value due to market decline, and then we are 
going to look at these towers and ask, what additional impact 
on the home value will that tower have on this home? Is that a 
fair statement, would you say?
    Ms. Borland. The appraiser would have to determine what 
type of impact the high tension towers would have on a home, or 
anything, backing into a railroad track, siting to a freeway, 
any external obsolescence they would have to comment on in 
their appraisal report.
    Mr. Miller of California. Does FHA require more information 
about easements up-front to ensure that future changes don't 
impact U.S. taxpayers?
    Ms. Borland. We do require that the appraiser specifically 
comment on whether or not the property is located within the 
easement. We do require that the appraiser comment on the 
impact. I am not sure how Fannie Mae and Freddie Mac are doing 
things, but I can only speak for FHA.
    Mr. Miller of California. Yes.
    Ms. Borland. And we do.
    Mr. Miller of California. You can only speak for FHA. I 
remember, Mr. Royce, when an individual from New York decided 
they wanted to change FHA standards, and I introduced an 
amendment in committee. We were in the Minority back then for a 
few years, and we lost, and it put a regional standard for 
appraisers where you really didn't have any local appraisers. 
The banks were not allowed to use their appraisers, who really 
know an area. I think I introduced a bill 5 months later 
showing the disaster that had caused, and Ed and I, my good 
colleague, voted with me on that and we changed the law.
    But the problem you have is you have local appraisers who 
are qualified appraisers who understand the marketplace and who 
understand the individuals who own those homes and the value of 
that neighborhood. And the reason this room is full and the 
standing room outside is full is because those appraisers go 
out to these homes and the first thing they do is, like when 
you drive down Peyton and there is this monster tower and you 
say, oh my gosh, and an appraiser is going to go out to this 
home and they are going to stand in front of the house, and 
this tower is going to overpower the house that is right behind 
it, and I just don't believe any reasonable person would assume 
that appraiser is not going to take that into consideration.
    That is not impugning FHA because you are trying to do your 
job, and you are trying to provide loans for these good people 
and make sure the economy can recover. Until the housing market 
in California starts to turn around, the economy in California 
is not going to turn around.
    So we are looking at an impacted economy, and we are 
looking at the individuals who have specifically been 
impacted--and I am going to use a little license here as 
Chair--by stupidity from individuals in Sacramento. That is my 
license, and that does not impugn my good friend, Mr. Curt 
Hagman.
    [applause]
    Mr. Miller of California. There are some champions out 
there like Curt. I am going to point him out. I have known this 
man since I endorsed him to run for City Council here in town, 
so he is a friend of mine, and I know his heart, and I know his 
actions and his deeds, and he is trying to help these people in 
the City. The reason Mr. Royce and I are here is that we feel 
the same way.
    I am not going to sit up here and bash Southern California 
Edison, although I don't agree with what they are doing. But it 
is an unfunded mandate by government that forces the private 
sector to do something that impacts these good people, and I am 
sitting up here with Congressman Royce seeing the tears. I am 
seeing the passion, and I am seeing people try to control 
themselves in the hearing because they understand we are trying 
to deal with reasonable protocol, and it is very hard on them 
because it is a very passionate issue.
    I think it is appropriate that we have this on the record 
today that, yes, they can make a loan, but is the appraiser 
going to have an impact on the value? I think the conclusion is 
without a doubt.
    I have far exceeded my 5 minutes, and I would be happy to 
yield to my colleague, Mr. Royce, for 5 minutes.
    [applause]
    Mr. Royce. Thank you, Mr. Chairman.
    I would like to start with a question of Ms. Tyrrell. We 
heard the argument put forward by Mayor Bennett as he explained 
that the SCE transmission route places 195-foot towers--
actually, I think 198 was the figure I got from you in your 
testimony--in a narrow right-of-way that is set for 150 feet. 
Why was it set for 150 feet? Because the original towers, the 
220kV towers, were 75 feet high. That is why the right-of-way 
was 150 feet, right?
    Ms. Tyrrell. Yes, sir.
    Mr. Royce. And so clearly in this case, if the right-of-way 
had followed previous protocol, that right-of-way would have 
been double 200 feet; it would have been 400 feet. It was not.
    I am going to go through the specific argument he made. He 
said the narrow right-of-way was designed for 75-foot-high, 
230kV structures which have not been energized in this 
community in decades. No other utility in the United States has 
placed 500kV towers this tall in such a narrow right-of-way. Is 
that factually correct, to your knowledge?
    Ms. Tyrrell. My understanding is that there are towers of 
this nature in a smaller right-of-way in Georgia.
    Mr. Royce. In Georgia, there is a situation.
    Mr. Miller of California. Another good State.
    Mr. Royce. With 500kV towers this close to people's homes?
    Ms. Tyrrell. That is my understanding, yes.
    Mr. Royce. Okay. Let me ask you another question, because I 
am going to go to the testimony we just received, and you say 
in that testimony, ``While many citizens of Chino Hills 
preferred the alternative 4C route, constructing the line to 
the park and through the park presented various challenges and 
environmental impacts. For example, the line would have had to 
depart from the project right-of-way and make use of a new 
right-of-way and cross several areas of sensitive animal and 
species habitat on its way to and through the park.''
    Let me ask you a question. Was there consideration of the 
impact on home values? We have the consideration here in terms 
of the impact on the species that would be underneath the power 
lines. Was there consideration of the impact on home values--
    [applause]
    Mr. Royce. --in this calculus?
    Ms. Tyrrell. The environmental impact report does take into 
account the impact on home values.
    Mr. Royce. It does?
    Ms. Tyrrell. Yes, it does.
    Mr. Royce. Let me ask you another question, then. Does it 
do a cost/benefit analysis in order to weigh what that impact 
would be on the community? We have heard the testimony as to 
the 17 percent drop overall in the community in home values. 
The impact of that on the tax basis here, on the tax base in 
the City and what the consequences of that would be in terms of 
revenues into the coffers of the State and local government, as 
well as the impact on the citizens here, how is that cost/
benefit analysis calculated when you are taking the impact on 
the endangered species or, what did you say, on sensitive 
animal and species habitats, as opposed to people's backyards 
on rights of way that were originally designed for towers which 
were 75 feet high? In case something happened to those towers, 
that right-of-way would be 150 feet high. Now, you have the 
right-of-way on towers which are 200 feet high.
    Ms. Tyrrell. Economic impacts in that detail are not part 
of the EIR.
    Mr. Royce. They are not part of the EIR. Then, let me ask 
you another question. Since we are going to cost, and you say 
cost was taken into account--
    Ms. Tyrrell. Yes.
    Mr. Royce. In order to avoid the principle that the 
shortest distance between two points is a straight line, in 
order to avoid going through the State park, which, as I 
understand it, was donated originally by this City to be a 
State park, it then required an additional 10 miles in order to 
navigate through the community, an additional 10 miles. What 
would the cost be in totality for an additional 10 miles, not 
considering what the liability costs might be ultimately for 
such a decision?
    Ms. Tyrrell. I would like to point out to you further in 
the testimony that the line that would depart from the project 
west of Chino Hills is preferred by the Chino Hills population. 
It makes use of a new right-of-way across several areas of 
sensitive animal species habitat on its way through the park. 
The line would have to use a new right-of-way to cross private 
lands that contain hazardous and dangerous materials. That's 
the Aerojet property.
    Mr. Royce. But there is a question, because in the totality 
of cost, the issue of addressing cleaning up the Aerojet 
property would seem to be de minimis relative to the cost of 
the impact on the community as a whole and the consideration 
that 1,000 homes are going to be within 500 feet.
    [applause]
    Mr. Royce. And that would be 4,000 people. So you would 
have on one hand the cost of cleaning up that site in order to 
go through that private property versus the impact on 4,000 
people.
    Ms. Tyrrell. There is also the electrical switching station 
that would have to be located on the side of a hill and undergo 
significant engineering support for that structure.
    Mr. Royce. There probably are some engineering costs 
involved in putting something on the side of a hill.
    Ms. Tyrrell. Significant engineering costs, and the Aerojet 
property is a severe hazardous waste site. It has actual bombs 
on the property.
    Mr. Royce. It is time to clean it up, and it would be time 
to apply some of the savings--
    [applause]
    Mr. Royce. It would just seem logical. It could be 
considered that maybe for posterity, it would be time to 
address that and clean that up, and maybe in the interest of 
cost, even though it might cost more to engineer the power 
station on the slope on the hill, the resultant savings in not 
having to go through an additional 10 miles with the attendant 
costs to the community and with the liability issues given the 
fact, again, to return to the fact that originally this right-
of-way was 150 feet, now that would imply that the right-of-way 
should now be 400 feet.
    So to return to the Garamendi Principles, as you do in your 
testimony, and talk about use of existing right-of-way, I think 
the basic premise might be flawed here. The basic premise is 
that you had an existing right-of-way. You did, for a 75-foot 
tower. But the Commission approved it for a 200-foot or, to use 
your number, a 198-foot tower.
    Do you think that might be problematic?
    Ms. Tyrrell. My understanding is the engineering of the 
towers--I'm sure SCE can speak to this a little better than I 
can--is such that if the tower were to fail, the base of the 
tower goes 50 feet into the ground. But if the tower were to 
collapse, it would collapse inward, and the engineering has 
improved since the original towers were built.
    Mr. Royce. I appreciate your testimony here. We will have 
an opportunity to ask about that.
    Mr. Chairman, I yield back. I thank the witnesses for being 
here today.
    Mr. Miller of California. Now that I know it is going to 
fall straight down, I feel a lot better. How about you, 
Congressman Royce?
    [laughter]
    Mr. Miller of California. Ms. Tyrrell, none of my comments 
were personal to you.
    Ms. Tyrrell. Yes, sir.
    Mr. Miller of California. We are all a little frustrated.
    Ms. Tyrrell. I appreciate the frustration, I really do. I 
am frustrated myself because I know that there are ongoing 
hearings that are taking place on this issue, and I can't speak 
to it, and I wish that I could share that information with you.
    Mr. Miller of California. Hopefully, you will go back and 
talk to people. Am I correct?
    Ms. Tyrrell. Yes, we will.
    Mr. Miller of California. You will maybe give them some 
kind of an idea of a concern that Members of Congress might 
have who have jurisdiction over certain things, and that we 
hope commonsense prevails.
    The frustration I have over dealing with the statement on 
the State park is that we have been trying for years to get the 
71 connector to the 91 done.
    [laughter]
    Mr. Miller of California. We even snuck language in, and we 
can't get the State to give us an easement on the edge of the 
park to just connect the 71 to a westbound connector to the 91. 
So when all of you get on the freeway and you wonder why is it 
all of a sudden a collector instead of a freeway with four 
lanes, two on each side, and a weird way to get onto the 91, 
thank the State of California, because the Federal Government 
was willing to fund it.
    Anyway, the Chair notes that some Members may have 
additional questions for this panel, which they may wish to 
submit in writing. And I would also ask that you submit your 
testimony electronically to us ASAP so we can make it a part of 
the record. That is not impugning you. I am just officially 
requesting that to take place.
    Without objection, the hearing record will remain open for 
30 days for Members to submit written questions to these 
witnesses, and I would like to thank all of you.
    Ms. Borland, you were very informative, and I think you 
have addressed some of the concerns that the community has, and 
maybe confirmed some of the concerns the community has, and the 
panel is dismissed. Thank you very much.
    Ms. Borland. Thank you, Congressman Miller and Congressman 
Royce.
    Mr. Miller of California. Thank you.
    Panel 3, would you please come forward?
    Before I introduce the witnesses on this panel, I would 
like to point out that there was one witness scheduled to 
testify who was unable to attend today. Unfortunately, Stuart 
A. Gabriel, professor of finance at the UCLA Anderson School of 
Management, will not be able to join us today. He had an 
accident. Professor Gabriel was going to present information on 
the recent trends in the Southern California housing market, 
potential adverse residential property values, and effects on 
proximity to high voltage transmission lines. We wish Professor 
Gabriel a speedy recovery. We really appreciate the time he 
spent, and he did prepare work for this hearing today. Without 
objection, I would like to insert Professor Gabriel's written 
testimony in the record.
    Without objection, it is so ordered.
    I regret that he will not be here to testify. I know that 
Members would have really benefitted from his testimony.
    Ms. Les Starck, senior vice president of regulatory affairs 
for Southern California Edison, is with us. Ms. Starck 
represents SCE's--pardon? Mr. Starck? You just cut your hair, 
didn't you?
    [laughter]
    Mr. Starck. Yes, I did.
    Mr. Miller of California. Mr. Starck. I have been dealing 
with women all day. What can I tell you? I have them to the 
right of me, and two there.
    Anyway, first, Mr. Starck, senior vice president of 
regulatory affairs for Southern California Edison. Mr. Starck 
represents SCE before the Public California Utilities 
Commission and the California Energy Commission. Mr. Starck has 
over 30 years professional experience with SCE, and I will 
state for the record that both Mr. Royce and I have had to call 
Southern California Edison in the past on issues in our 
districts that were important, and they have always been very 
timely and responsive to our concerns, and I am not trying to 
make them look good. I am just saying that when we called them, 
they have always been available. When we asked them to testify, 
they were absolutely forthright, and they returned a response 
immediately saying they would be here.
    Second, Mr. Fred Kreger, certified mortgage consultant, is 
a branch manager for American Family Funding. He is an active 
member of the National Association of Mortgage Brokers, NAMB, 
as well as the California Association of Mortgage Brokers, 
CAMB. He is the president-elect and chairman of government 
affairs for CAMB.
    Third, Ms. Marion Proffitt--I got that right this time--is 
the State director for the California Association of REALTORS 
and past president of Tri-Counties Association of REALTORS. 
Ms. Proffitt has over 20 years of professional experience in 
home office and ERA Prime Properties.
    And fourth, Mr. James L. Henderson is founder of J.L. 
Henderson and Company. Mr. Henderson has 20 years of 
professional appraisal experience. He holds an SRA designation 
from the Appraisal Institute. Mr. Henderson has given testimony 
in the field of real estate property valuation in both Federal 
and State court.
    Without objection, your written statements will be made a 
part of the record and we will recognize each of you for 5 
minutes.
    Mr. Starck, you are recognized first.

     STATEMENTS OF LESLIE STARCK, SENIOR VICE PRESIDENT OF 
 REGULATORY AFFAIRS, SOUTHERN CALIFORNIA EDISON, ON BEHALF OF 
           THE CALIFORNIA PUBLIC UTILITIES COMMISSION

    Mr. Starck. Good morning, Chairman Miller and Congressman 
Royce. Thank you for inviting me to participate in today's 
field hearing. I appreciate the opportunity to share Southern 
California Edison Company's perspective on the Tehachapi 
Renewable Transmission Project, segments 4 through 11. My name 
is Les Starck, and I am senior vice president of regulatory 
affairs for SCE, an investor-owned utility that has been 
providing electric service to this region for 125 years. Edison 
serves nearly 14 million people and over 500,000 businesses in 
Southern and Central California. Edison's investment in 
transmission facilities has increased significantly in recent 
years due to the need to improve system reliability and to 
increase access to clean, renewable energy resources, and this 
is expected to continue well into the future.
    The Tehachapi project is the Nation's largest renewable-
related transmission project. The approved route crosses 
through dozens of cities and numerous counties in Kern, Los 
Angeles, and San Bernardino Counties. The project, which is 
currently under construction, spans over 170 miles and will 
include approximately 850 transmission towers or poles and 4 
new substations. When complete, the project will be capable of 
delivering 4,500 megawatts of electricity, which is enough to 
power 3 million homes.
    My written testimony goes into great detail about the 
extensive outreach, planning, and CPUC approval process 
associated with the Tehachapi project. In the brief time that I 
do have, I would like to highlight a few key aspects of the 
outreach, the planning, and the approval process.
    First, consistent with State policy, this project utilizes 
already-existing transmission corridors to the extent possible. 
In Chino Hills, transmission towers and lines have been in the 
right-of-way since the 1940s.
    Second, both Edison and the CPUC conducted extensive public 
outreach. The interests of communities like Chino Hills were 
carefully considered. In fact, the CPUC considered 11 
alternatives for the project, and 6 of these related to the 
route in Chino Hills.
    And finally, the CPUC comprehensively assessed the impact 
on community and property values, they weighed environmental 
considerations, including land use and safety, and considered 
the overall need for this project. The Commission found that 
the Tehachapi project was needed to make State goals and 
selected the current route as preferred and environmentally 
superior.
    FHA issues were not specifically addressed in the Tehachapi 
review process, and I will defer discussion on FHA policies to 
the FHA representative testifying before this subcommittee. 
However, it is important to understand that the Tehachapi 
project would not create a new impediment to FHA loan 
eligibility. Like the newly-constructed towers, the height of 
the old transmission towers exceeded the distance between the 
base of the towers and the edge of the right-of-way. High 
voltage transmission lines and structures are routinely located 
in close proximity to residential neighborhoods throughout 
California. Chino Hills is no different.
    In closing, if we want to expand and modernize the existing 
electricity grid to ensure reliability, provide access to 
renewable energy and other forms of generation, and reduce 
reliance on foreign oil, we must have the transmission system 
needed to deliver the energy to customer load centers. In some 
cases, this means projects like Tehachapi must traverse urban 
areas, and not everyone will be happy with the choices that are 
necessary to make that happen. But we must ensure that when 
projects emerge from the rigorous approval process, 
transmission construction can promptly move forward to meet the 
energy needs of California's rate payers.
    I am happy to take any questions that the subcommittee may 
have today. Thank you for the opportunity to speak.
    [The prepared statement of Mr. Starck can be found on page 
65 of the appendix.]
    Mr. Miller of California. Thank you very much.
    Mr. Kreger, you are recognized for 5 minutes.

 STATEMENT OF FRED KREGER, CMC, PRESIDENT-ELECT AND GOVERNMENT 
AFFAIRS COMMITTEE CHAIRMAN, CALIFORNIA ASSOCIATION OF MORTGAGE 
                         PROFESSIONALS

    Mr. Kreger. Thank you. Good morning, Chairman Miller, Mr. 
Royce, and staff members. My name is Fred Kreger, and I am the 
president-elect and the Government Affairs Committee chair of 
the California Association of Mortgage Professionals, and a 
licensed mortgage loan originator in Santa Clarita, California. 
The California Association of Mortgage Professionals represents 
almost 2,000 mortgage professionals throughout California. 
Because of the large impact that the Federal Housing 
Administration, or FHA, insured mortgage programs have on our 
profession and our customers, we take special interest in 
anything that may affect the eligibility of these mortgage 
programs.
    I was asked here today to address the impacts of high 
voltage transmission towers and lines on the eligibility of FHA 
insured mortgage programs. As background, the FHA loan limit in 
San Bernardino County is $500,000, and encompasses a large 
number of home mortgages within this particular region.
    To be specific, in Chino Hills, the median listing price is 
around $419,000. With that being said, if the eligibility for 
FHA insured mortgage programs were to be affected within the 
Chino Hills area, the potential for a large impact to be felt 
within the real estate market could be great and worthy of 
discussion.
    However, through my 10 years of experience as a mortgage 
professional, I can safely say that the impact of high voltage 
transmission lines on property values and FHA eligibility has 
been somewhat minimal. On a monthly basis, I originate many 
loans within the surrounding cities and counties, of which FHA 
loans serve an important role for my particular clients. I have 
yet to have a customer encounter difficulties with their FHA 
eligibility due to high voltage power lines.
    The specific homes located near the Tehachapi Renewable 
Transmission Project are located outside of the project's 
easement, which according to the U.S. Department of Housing and 
Urban Development Homeownership Center Reference Guide for new 
FHA mortgage originations, these properties are considered 
eligible and no further action is necessary. The appraiser, 
however, is instructed to note and comment on the effect on 
marketability resulting from the proximity to such sites and 
nuisances.
    In my experience, the appraisers will note the presence of 
high voltage transmission lines. However, the effect on the 
marketability of the home value is minimal, if any. Over years 
of research and study, I have concluded that although community 
members and homeowners have negative feelings towards high 
voltage power lines, their presence is apparently not given 
sufficient enough weight by buyers and sellers of real estate 
to have any consistent, material effect on market value.
    In fact, 20 years ago, I bought my first home in Santa 
Clarita that was located adjacent to power lines. I preferred 
this home to others because I was informed that the land 
surrounding the power lines could not be developed, meaning I 
had no neighbors in back of me or near the side of me. This 
opinion is also shared by some independent home appraisers who 
at times adjusted some of these property values up due to the 
undeveloped land that was adjacent to the buyer's property.
    When discussing this issue with some home appraisers, I 
have learned about a study that was done actually in Santa 
Clarita of 9 housing tracks stemming from 2004 to 2008, 
encompassing about 864 homes that were sold within this time 
period. The study found that there were no valuation 
differences in those homes that were adjacent to the power 
lines from those that were not adjacent.
    In closing, I believe that there is a lot of concern out 
there, but I see no problems in terms of eligibility of FHA 
insured mortgage programs. Thank you for your time, and I am 
open to any questions that the committee has here. Thank you.
    [The prepared statement of Mr. Kreger can be found on page 
60 of the appendix.]
    Mr. Miller of California. Thank you.
    Ms. Proffitt, you are recognized for 5 minutes.

STATEMENT OF MARION O. PROFFITT, PAST PRESIDENT OF TRI-COUNTIES 
     ASSOCIATION OF REALTORS, ON BEHALF OF THE CALIFORNIA 
                    ASSOCIATION OF REALTORS

    Ms. Proffitt. Chairman Miller, Representative Royce, and 
members of the subcommittee, my name is Marion Proffitt. I have 
been a REALTOR for 20 years. I am a broker associate for ERA 
Prime Properties here in Chino Hills, and I am past president 
of the Tri-Counties Association of REALTORS.
    I am here to testify on behalf of the more than 150,000 
members of the California Association of REALTORS (CAR). We 
thank you for the opportunity to present our views at today's 
hearing on high voltage transmission towers and Federal Housing 
Administration, FHA, financing. It is an honor to be able to 
testify to the subcommittee on this important issue that will 
have a profound impact on so many homeowners and home buyers 
here in Chino Hills.
    For 20 years, I have practiced real estate in this 
community, and while I do some work with investors, my primary 
clients are principal home buyers. This has provided me the 
opportunity to witness how the Chino Hills housing market is 
impacted by the availability and the absence of FHA financing. 
Over that time, I have also seen the impact that a home's 
proximity to the power lines can have on marketability and 
price.
    I would like to start by addressing the question on what 
the impact would be if FHA financing were not available to 
certain neighborhoods in Chino Hills. Simply put, if FHA 
removes the ability of home buyers to utilize FHA financing on 
properties near the easements in question, those homes will be 
forced to sell at a discount to similar nearby properties that 
do qualify for FHA financing. My fellow agents and I know this 
to be a fact because we see it every day in the current condo 
market where many condo complexes have chosen not to become FHA 
approved because of burdensome and costly new FHA rules. The 
homeowners selling their condos in non-FHA approved complexes 
must sell their units for less than those in FHA approved 
complexes. Sellers of homes near these easements will face a 
similar fate should FHA remove eligibility.
    We also believe other homeowners and sellers will suffer 
because these non-FHA approved homes may now be used as 
comparables for all homes in the area. Other fallout from the 
removal of FHA financing on a property would be to all but 
eliminate the ability of first-time home buyers to purchase 
that property, as FHA loans are now the preferred choice of 
financing for first-time home buyers.
    A final point I would like to touch upon regarding FHA 
financing in Chino Hills is our loan limits. First, I would 
like to thank the Members here today and others in Congress for 
extending the FHA loan limits again. However, you may be 
surprised to know one of the struggles we face here in Chino 
Hills is our low FHA loan limit of $500,000. While more than 
adequate for some communities, the fact is home buyers looking 
in Chino Hills also look in Diamond Bar, located in Los Angeles 
County, and Brea, located in Orange County, and both benefit 
from a loan limit of $729,750. The higher loan limit is 
important because FHA is no longer just for first-time home 
buyers or people with less than stellar credit. Many move-up 
home buyers who otherwise would have used the equity in their 
current home as a downpayment on their next home now find 
themselves with little to no equity. FHA is the last safe and 
affordable low down-payment option for buyers.
    Lastly, while CAR does not possess statistics to show what 
the impact on pricing may or may not be due to a home's 
proximity to the power lines, I can tell you from my 20 years 
of experience that for some home buyers, it does matter. Just 
recently I took an investor to see a property that backed up to 
an easement, and its mere location next to that easement was 
enough for them to say no. However, this isn't the case for 
every buyer. Many have no problem living next to the power 
lines, but there are many buyers I have worked with who require 
a discounted sales price or who will refuse to buy one of the 
properties. I have spoken with many other REALTORS in Chino 
Hills and they have shared similar experiences to mine.
    I would like to close by emphasizing that Chino Hills is 
first and foremost a community that many families seek out 
because of its safe neighborhoods, excellent schools, and 
family-friendly atmosphere. My family has been fortunate to 
call Chino Hills home for the last 25 years, and we hope that 
the FHA and Congress will recognize how important safe and 
affordable home financing options like FHA are in maintaining 
this beautiful community.
    Thank you again for holding these hearings and for inviting 
me to speak. I look forward to answering any questions the 
subcommittee may have.
    [The prepared statement of Ms. Proffitt can be found on 
page 62 of the appendix.]
    Mr. Miller of California. Thank you very much.
    [applause]
    Mr. Miller of California. Mr. Henderson, you are recognized 
for 5 minutes.

STATEMENT OF JAMES L. HENDERSON, SRA, J.L. HENDERSON & COMPANY, 
 ON BEHALF OF THE APPRAISAL INSTITUTE AND THE AMERICAN SOCIETY 
             OF FARM MANAGERS AND RURAL APPRAISERS

    Mr. Henderson. Thank you, Chairman Miller, Congressman 
Royce, and members of the Subcommittee on Insurance, Housing 
and Community Opportunity. I thank you for the opportunity to 
share the perspectives of professional real estate appraisers 
on the valuation issues relating to residential properties with 
high voltage transmission lines on behalf of the 25,000 members 
of the Appraisal Institute and the American Society of Farm 
Managers and Rural Appraisers.
    Appraisals of properties with transmission lines are 
similar to other appraisal assignments, but can be more 
complex. When an appraiser identifies and observes a high 
voltage transmission line, it is important to report to the 
client its existence and analyze any potential effects on 
value. This is consistent with the important role of real 
estate appraisers in assessing lender collateral risk.
    Like many factors in real estate, the proximity of the line 
to dwellings and the impact on view will be case-by-case and 
market-specific. Proximity is a critical factor. When 
transmission lines are extremely close to the residence, the 
impact on marketability will be more severe.
    Alternatively, some markets may show little to no 
resistance at all, or even place a premium if it creates open 
space or a greenbelt in the backyard. In other situations, the 
resistance may depend on the type of power line corridor that 
is involved. There are many potential factors such as the size 
and type of tower, and the line capacity, just to name a few.
    When analyzing potential market impacts, a common method is 
paired sales analysis. The paired sales approach attempts to 
match the characteristics of a subject property sold within a 
claimed area of impact, the subject area, with individual sales 
of similar properties sold outside the claimed area of impact, 
the control area. The issues here center on the availability of 
sales and the ability to identify sales that can be considered 
a match to the subject property.
    Other methods, such as multiple regression analysis, can be 
utilized by appraisers and may be well suited to identify the 
independent effect of transmission lines, holding the other 
value-determining factors constant. However, this is only 
possible with a relatively large number of subject area and 
control area sales, which is often not available.
    The Federal Housing Administration has specific policies 
relative to appraisals of properties with high voltage 
transmission lines. These policies are generally consistent 
with standard appraisal practices, but specifically require the 
appraiser to indicate whether the subject site, dwelling, or 
related improvements are located within the easement serving a 
high voltage transmission line. If the subject site, dwelling 
and improvements are located outside the easement, the property 
is considered eligible for funding and no further action is 
necessary. If the easement encroaches upon the subject 
property, it becomes the requirement of the lender to obtain a 
letter from the owner or operator of the tower stating that the 
subject improvements are not within the engineered fall 
distance of the tower. We note: this is not an appraisal issue, 
but one of agency policy and lender decision.
    In either case, the appraiser is instructed to note and 
comment on the effect on marketability resulting from the 
proximity to the hazard. The appraiser's function is to provide 
information to the lender, and it is the lender and HUD that 
make the decision to reject if the situation warrants it. 
Otherwise, the appraiser accounts for the influence of the high 
voltage transmission line in the valuation of the property.
    Currently, Fannie Mae and Freddie Mac will accept loans 
with transmission line proximity so long as the appraiser 
discloses the influence and provides comment if there is an 
adverse influence and loss in value. These policies are found 
in the Seller/Servicer Guidelines. However, one must also 
recognize that the FHA has a slightly different mission than 
Fannie Mae and Freddie Mac that includes health and safety 
considerations. These policies can be found in Handbook 4150.2 
and the agency's Valuation Protocol, Appendix D.
    Lastly, in regards to the Tehachapi Renewable Transmission 
Project and the question of whether or not property values of 
homes near the project have decreased, I recommend hiring a 
local, professional, designated appraiser, specifically one 
with residential experience relative to properties that have 
transmission line influence, to determine how much of a loss in 
value there is as a result of the power lines.
    It's easy to assume that your property values will lose 
major value, but an unbiased, professional appraiser can 
analyze the market thoroughly to determine whether that is 
actually the case.
    I thank you for the opportunity to testify today, and I am 
happy to answer any questions that you may have.
    [The prepared statement of Mr. Henderson can be found on 
page 58 of the appendix.]
    Mr. Miller of California. Thank you very much.
    I'm going to recognize the members of the committee for 5 
minutes each for questions based on the order of opening 
statements.
    Mr. Starck, I noticed the brevity of your statement. But I 
think your opening comments probably speak louder than anything 
else I could say. You said ``consistent with State policy.'' I 
think the Members attending this hearing need to understand 
what that really means. They don't have a choice. But the 
difference in saying that there is a tower there now--and I 
acknowledge that, based on the base of the tower, if it did 
fall, it would hit outside the fall zone. But there is a 
difference between a tower hitting my rear wall and one falling 
on my home, ending up in my front yard, and I think you 
recognize that.
    I know you are stuck, and there is not much you can say. 
But, yes, the original tower might fall outside of the 
easement, and I might lose my rear fence, but I didn't lose my 
house, and it doesn't stare at me in my front yard when people 
across the street see it hitting.
    So that is a huge difference, in my opinion--75 feet versus 
200 feet is an enormous difference.
    I would like to ask you what led to the final determination 
to have these power lines located near the homes in Chino 
Hills. Was it the State mandate? Do you think you would be 
putting a 200-foot tower there right now if the State had not 
mandated that you bring the power from the Tehachapi? That is a 
pretty simple question.
    Mr. Starck. Congressman Miller, the State adopted the 33 
percent RPS standard.
    Mr. Miller of California. I know that. I am saying, had 
they not done that, do you really think we would be putting 
200-foot towers out there right now? You weren't even using the 
75-footers.
    Mr. Starck. Please understand that this line, while it is 
required to deliver the renewable energy out of the Tehachapi 
area, is also needed to provide additional reliability to the 
grid. I think if you take a look at the record, we have a 
transmission--it is not a shortage so much, but we have some 
limits coming from our South of Lugo system that is down at 
Home Pass, and by putting in this additional double-circuit 
500,000-volt line, that additional wire in the air provides a 
better--
    Mr. Miller of California. No, I understand.
    Mr. Starck. --better liability, and that is what one of the 
purposes of the project is.
    Mr. Miller of California. I recall back in the legislature 
in the 1990s, we discussed the cost of wind-generated power 
versus the cost of nuclear and other power and how much more 
expensive it was. Southern California Edison is a business, and 
no business is going to go out and spend far more money for 
something that they could provide the same product for at a 
lesser rate.
    So to assume that you would be doing this--you are in a 
very bad position. I wouldn't want to be in your chair right 
now, because you have those people in Sacramento listening to 
those people talking in Washington. That puts you in a very bad 
situation. So you don't really want to necessarily sit out 
there and say, ``The suckers made me do it.'' That is really 
rather crude, but they made you do it.
    That is a fact of life, and it is really sad when I talked 
about unfunded mandates. It reminds me of what we did--we tried 
to extend the 241 toll road down to South County. It ends up 
right now in Rancho Santa Margarita, and we wanted to have it 
go to San Clemente and all the way down so we could remove the 
impact on the 5 freeway because there is a bottleneck when you 
have the 91 and all these freeways leading into the 5. The 
lower you get down into San Diego and South County, if you are 
going in that direction from L.A., the easiest way is to go in 
that direction. But there is a huge bottleneck.
    What we did a few years ago is, because we owned a Marine 
base down there, the Federal Government, we thought it would be 
nice to give an easement to the State of California to have a 
State park down there. So when we wanted to run the 240 toll 
road down, guess who wouldn't give us an easement through the 
State park that we let the State use? The State of California.
    And when it came to the Chino Hills Park, the Federal 
Government also funded that with a grant. So, we have been bit 
2 times for trying to do the right thing in California, and the 
citizens of this State seem to be suffering for it, and it is a 
sad statement.
    But your opening statement speaks for itself and I will not 
question you any further because you are in a very difficult 
situation, consistent with State policy, and luckily we have an 
individual like Curt Hagman to fight for the people that they 
represent.
    Mr. Kreger, do the people adjacent to the overhead high 
voltage transmission lines have difficulty maintaining 
mortgages, particularly with FHA, compared to people who aren't 
adjacent to those lines?
    Mr. Kreger. In my previous testimony, what I said is that 
according to FHA standards, as long as it is outside of the 
easement, they do not. But again, it is up to the appraiser to 
basically comment on the marketability aspect.
    Mr. Miller of California. Don't you think that appraiser is 
going to look at that and say, ``Oh my gosh!''
    Mr. Kreger. Absolutely.
    Mr. Miller of California. Okay, that is what I thought.
    Mr. Kreger. Right.
    Mr. Miller of California. Because you got kind of hissed at 
a little bit when you were just trying to make a statement, and 
I don't think we gave you enough time, but I think you were 
trying to get to that point, that there might not be a 
regulation against it or a requirement against it, but is there 
going to be an impact? Without a doubt. Is that a fair 
statement?
    Mr. Kreger. Absolutely.
    Mr. Miller of California. Okay, that is what I thought you 
might say. Thank you for that comment.
    Ms. Proffitt, describe your experience with FHA in Chino 
Hills and the California market in general. How does FHA insure 
individuals and take advantage of the FHA insurance mortgage 
program? Is it quite common?
    Ms. Proffitt. I feel it is very common. I don't have the 
facts and figures in front of me, but I would be happy to get 
back to you with that.
    In my personal experience, I work with a lot of first-time 
home buyers, and I am also currently working with parents who 
are helping their children buy homes, and many times that FHA 
financing is what is making the difference between them being 
able to buy and not being able to take advantage of today's 
market.
    Mr. Miller of California. In today's marketplace, it is 
absolutely crucial to have that available.
    Ms. Proffitt. Absolutely.
    Mr. Miller of California. Mr. Henderson, you go through 
processes in appraising homes that are located near overhead 
high voltage lines. A 75-foot tower versus a 200-foot tower, 
give me your opinion of what the difference would be.
    Mr. Henderson. I can't really give you an opinion as to 
value, which is what my opinion would be worth. But 
unfortunately, without seeing the data, it would be very 
difficult to give an actual value opinion.
    Mr. Miller of California. Let me make it easier for you.
    Mr. Henderson. But I would think that it would be 
significant.
    Mr. Miller of California. If you went out to appraise a 
home and you looked at a 150-foot right-of-way, and there was a 
75-foot tower back there, and it is going to fall pretty much--
the top of it might hit the back fence, but it is pretty much 
going to be where it's at, and everybody knew that tower was 
there when they bought, and people coming in to buy probably 
have peace of mind that in their backyard, there is nobody 
looking over their fence, but the tower is at a safe distance.
    But if you look and you think there is a 200-foot monster 
staring at you, would that influence your appraisal in any way, 
do you think?
    Mr. Henderson. It would, yes, and let me try to--I have 
more than a minute, right?
    Mr. Miller of California. Go right ahead.
    [laughter]
    Mr. Miller of California. I was the Chair last time I 
checked, so we are good.
    Mr. Henderson. Okay. It would cause me to do more diligence 
on looking at the market to determine what the effect would be 
on that, probably more so than a 75-foot tower. I would do more 
research to see what the impact would be. I think any 
responsible appraiser would do that.
    As far as what the number would be, I have no idea. But 
obviously it would be--and it would probably be more prominent 
in my report than it might be if it is a 75-foot tower. I am 
going to tell somebody that it is there. I am going to show 
them in photographs that it is there so that they are aware of 
it.
    Mr. Miller of California. I thank you for that.
    Congressman Royce, you are recognized for 5 minutes.
    Mr. Royce. Thank you. I was going to ask Mr. Starck a 
question.
    Many have noted that under the current law, transmission 
lines--and we had that whole discussion that I brought up about 
the precedent of basically expanding an easement over the 
original 150-foot easement, or utilizing that 150-foot 
easement. Many have noted that transmission lines of this 
magnitude are not allowed within, I think, 350 feet of a public 
school, and that may even be for 230kV that they are not 
allowed within 350 feet of a school.
    Is there conclusive evidence disproving any potential 
health risk?
    Mr. Starck. Congressman, you mentioned the Department of 
Education's guidelines. There is no mandate that schools need 
to be set back 350 feet away from a power line. They are merely 
advisories, okay? And, in fact, schools that do have sites that 
are near power lines are allowed to construct their schools 
there, but there are requirements that they have to go up and 
file electromagnetic field mitigation plans related to it, but 
there is no prohibition.
    Mr. Royce. I must have mis-read that in terms of the 
requirements. But you are saying that what they have to do 
instead is, if they are within 350 feet, they have to file 
these mitigation plans. Why do you think they have to file 
these mitigation plans? What is the point?
    Mr. Starck. I think the PUC and other scientists are really 
having--there is no agreement, I guess I should say--
    Mr. Royce. I understand that.
    Mr. Starck. On the scientific impact on people.
    Mr. Royce. There may not be here. In Europe, high voltage 
power lines are usually buried. Maybe certainly in communities 
this close to homes, I think they are always buried, which 
brings me to another point. When it came to Anza-Borrego Desert 
State Park and the question of what to do about the power lines 
there that would run through the park, the decision was made to 
bury the lines in some areas. What do you think the impact was 
on the local community and the home values as a consequence of 
that alternative of making the decision to bury the lines, 
because one of the questions that came up was the totality of 
the impact?
    This is the issue the City raises. What is the cost to the 
citizens in terms of the lost property value, to the City in 
terms of the lost revenue, to the State from the same calculus?
    At some point in time, you begin to understand why maybe 
the Europeans made the calculation that, in urban areas, we are 
going to do the tradeoff and bury the power lines because of 
the other costs that would need to be taken into account.
    Mr. Starck. The Anza-Borrego project that was undergrounded 
is not a 500kV project. That is, I think, a 220kV project that 
was undergrounded.
    Mr. Royce. Okay.
    Mr. Starck. I think it was in and around a State park, 
okay? But with respect to undergrounding 500kV lines here in 
Chino Hills, I would just like to add that there are no 500kV 
underground projects in the United States today. There are only 
two in the world. One is in Shanghai, and the other is in 
Tokyo. Another is being built in Moscow.
    Mr. Royce. And what is being done with those lines?
    Mr. Starck. Those are being undergrounded.
    Mr. Royce. So in Shanghai, they are going to underground 
this. And in Moscow, they are going to underground it.
    Mr. Starck. Two are in operation, Shanghai and Tokyo, and 
Moscow is being built.
    Mr. Royce. I see.
    Mr. Starck. We are not saying it can't be done. It really 
can be done.
    Mr. Royce. Right.
    Mr. Starck. The technology is there.
    Mr. Royce. Obviously, it has been done there.
    Mr. Starck. Yes, it has been.
    Mr. Royce. And it has been done in Anza-Borrego.
    Mr. Starck. And we are not going to say that it can't be 
done. It would be something that would be a very expensive 
proposition for the State. And again, the thing that we have to 
worry about, I think, is in the future we believe there is 
going to be a lot of new transmission in Southern California. 
You take a look at the load growth in California, we believe 
there will be additional 500,000-volt lines coming in Southern 
California. And if the State decides to underground here in 
Chino Hills, then we believe it will be very likely that there 
will be other communities looking to underground, and it will 
result in millions and millions of extra dollars and--
    [applause]
    Mr. Royce. Let me ask you about that. What we are talking 
about is not undergrounding for the length of the project. 
Indeed, as it was discussed, there is a little over 10 miles 
that could have been saved had you gone directly through the 
State park here, in terms of construction cost. What we are 
talking about is in situations where the power lines are in 
people's backyards.
    In those circumstances, where you are going to use an 
existing right-of-way and argue that though it was built for a 
75-foot tower and you are now going to put up a 200-foot tower, 
we are talking about burying those lines given the fact that 
maybe the science is questionable. Maybe we give the benefit of 
the doubt here in terms of the impact. But what you are saying 
is that we have never had power lines carrying this amount of 
voltage, certainly not in the backyards of a community. There 
may be one in Georgia that has gone up, all right?
    What you are also saying is that in other countries, in 
Russia and China, the decision has been made to bury it in 
these circumstances. We are also hearing that in San Diego, the 
decision was made, given the impact that it would have, to go 
ahead and do the tradeoff and bury the lines.
    I just would ask you, what would the cost savings have been 
had you, for example, taken the 10 miles savings in distance 
and gone through the State park in terms of lower cost there? 
That would have been an alternative, an alternative that could 
have been maybe pushed more vigorously, or to go ahead with 
duplicating what is being done in Europe and elsewhere.
    Mr. Starck. We looked very hard at the State park 
alternatives. In fact, there were five alternatives evaluated. 
And under the commission's rules and processes, we evaluated 
the environmental impacts of the State park alternative, and we 
looked at biological impacts. There were problems with the 
DTSC. That's the Department of Toxic Substance Control. We 
reviewed the issues with respect to unexploded ordnance in the 
area. There were problems with the State park. We were 
concerned that we would not be able to get the State park to 
change the general plan. There were just a number of hurdles 
with this project. The geo-technical situation in that 
particular area, building the substation that was required, the 
switchyard, was going to be very challenging in this geological 
area.
    And the commission at the end, after evaluating cost, 
biological impacts, all of these various factors, decided that 
it was the environmentally inferior route and decided that 
going and using the existing right-of-way, which was an already 
disturbed corridor, that was the environmentally superior 
route. And so, it was a very thorough evaluation, and that is 
how it was decided.
    Mr. Royce. Let me just get back to the question I asked 
about the 10 miles.
    Mr. Starck. Okay.
    Mr. Royce. How much would it have saved just in terms of 
construction cost, so I just have some idea of what I could 
weigh against the cost of the additional engineering for the 
power station on the hillside?
    Mr. Starck. Our estimate at the time--I don't have the 
numbers here in front of me, but when we estimated the cost of 
going through the State park, it was a higher cost than going 
with the existing right-of-way. The primary reason for that was 
you have to build that switchyard in the middle of the State 
park, and you were going to have to excavate tremendous amounts 
of dirt in building a GIS substation, that is a gas-insulated 
substation, which is very expensive, and that really increased 
the cost of the project. So it wasn't a cost savings to go 
through the State park.
    Mr. Royce. This is interesting to me. The issue you make is 
about the property that had been contaminated and the cost that 
it would take.
    Mr. Starck. Yes.
    Mr. Royce. I am certain that at the point in time that the 
decision was made not to do the due diligence that would have 
been required, maybe because of cost, in order to prevent that 
contamination, probably at that point in time not as much was 
known about the contamination of groundwater and everything 
else that can occur.
    I wonder if we are in potentially the same circumstance 
today, where just as several decades ago, several generations 
ago, we might not have anticipated the long-term costs that 
would accrue and would impact the society if we didn't at the 
time put in place standards as to how we would handle hazardous 
waste. As a matter of fact, in this particular case we are 
saying just to go back and try to handle it and fix it today 
would be too costly.
    Is it possible that our friends in Europe or in Russia or 
in China are anticipating that maybe it is worth the tradeoff 
given what we don't know about electromagnetic fields and the 
consequences of that in the future?
    [applause]
    Mr. Royce. If we were just to weigh the scales here, 
looking back in time, thinking about what we didn't anticipate 
in terms of that hazardous waste, and then looking at what we 
don't know today about the science. As you say, it is arguable. 
But we do know that other societies are reaching a different 
conclusion than we are on this. Is it possible that should be 
weighed in the balance in order to protect and lower the costs 
long term? And could that still be done in consultation, 
mediation, and in an effort to work with the City in order to 
resolve the problem?
    Mr. Starck. The commission evaluated a number of factors 
and came to the decision that it did. I would only add that 
with respect to undergrounding, if the State decides that 
undergrounding is the way to go, we would want them to 
recognize that the cost of doing that policy will not be 
restricted here to Chino Hills if we do it here. It will go in 
a lot of other places throughout Southern California, at great 
expense, and as you know, California--
    [applause]
    Mr. Starck. California has some of the highest rates.
    Mr. Miller of California. I ask that you hold your 
applause. We will get it.
    Mr. Starck. California has the highest electricity rates in 
the United States, and we believe prosperity in California is 
dependent upon affordable energy. And so, that is why we are 
concerned about doing things that will really raise rates.
    Mr. Royce. Let me just close with this. One of the reasons 
California has the highest electrical rates is because of 
mandates like the one that the chairman alluded to that have 
been imposed upon this State that requires that this be done in 
a manner which is so much more costly. I think that should be 
recognized as well.
    But at the end of the day, when we anticipate costs, I 
think we are failing to factor in an additional issue here that 
is going to make it, as we heard from the testimony here in 
terms of the home values, very difficult for people to get 
refinancing for their homes if they are proximate to these 
towers. We are going to have lower values there.
    But long term, we also have that cost of the potential 
liability, and that could be addressed today by burying the 
lines or running them through an uninhabited area where it does 
not impact the citizens here.
    I yield back, Mr. Chairman.
    Mr. Miller of California. Thank you.
    Hopefully, based on the confusion we have had in the past, 
there has been some clarity on this issue. We have established 
a record, I believe, that hopefully will help resolve this 
issue in a positive way.
    I want to thank the City for opening their great City Hall 
up to us, and the City Council for the testimony and for your 
generous, generous help and contribution in this, and I want to 
applaud you for representing the City who elected you.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 30 days for Members to submit written questions to these 
witnesses and to place their responses in the record.
    This hearing is adjourned.
    [Whereupon, at 12:40 p.m., the hearing was adjourned.]
                            A P P E N D I X



                             April 14, 2012
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