[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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