20071010Sale of Transmission Easements.pdf

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201 South Main, Suite 2300
Salt Lake City, Utah 84111
October 10, 2007
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702-5983
Attn: Jean D. Jewell
Commission Secretary
Re:Sale of Transmission Easements
The purpose of this letter is to provide notice to the Commission of the planned sale of six
transmission corridor easements in Utah. The underlying property in the proposed transaction is
currently accounted for as transmission property investment and a portion of that investment has
been allocated to Idaho and included in Idaho rate base.
Center Retail Development
Rocky Mountain Power s Terminal - Ninety South 345 kV and Terminal - Midvale 138 kV
transmission corridor is located north and adjacent to the E-Center Retail Development project in
West Valley City, Utah. West Valley City has made it a condition of approval that the
developers obtain two easements from Rocky Mountain Power, one for an access road and the
other for parking access.
The company relied upon the opinion of a local broker for determining the market value of the
underlying property. The market data from the broker suggests that the land value is $9.90 per
square foot or $431 244 per acre. The company targets 70 percent as the factor for easement
transactions involving a roadway and 50 percent as the factor for easement transactions
involving parking areas. The company has calculated the total easement price for the proposed
access road and parking area to be $378 155.29 (access road: 46 260.72 square feet x $9.90 per
square foot x 0.7 = $320 586.79., parking area: 11 630 square feet x 9.90 per square foot x 0.
= $57 568.50. Total price: $378 155.29).
Proceeds from the sale of the easement will be credited to FERC Account 421., Gain on the
Disposition of Property. The location of the proposed access road and parking access will not
unduly restrict Rocky Mountain Power s access to the transmission lines. The requested
easement is consistent with others that have been approved by the company, when the requested
easement does not conflict with the corridor s primary use. Rocky Mountain Power is presently
unaware of any adverse impact to another utility that would result from this transaction.
Sale of the easement to the E-Center Retail Development will not adversely affect the company
customers because the sale recovers 70 percent of the value of the property for the access road
and 50 percent of the property value for the parking area and Rocky Mountain Power will retain
ownership of the property and safe access to its transmission lines. If the parties are unable to
consummate this transaction, the West Valley City will deny approval of the proposed E-Center
Retail Development project due to insufficient access and parking. An alternative possibility is
that the West Valley City could use its right of eminent domain to obtain the necessary
easements without the approval of this Commission.
Hidden Cove Phase Subdivision
Rocky Mountain Power s Ben Lomond - Terminal 230 kV and Ben Lomond Terminal 345 kV
transmission corridor is located west and adjacent to the proposed Hidden Cove Phase 2
Subdivision in Weber County, Utah. Roy City has approved the subdivision conditioned upon
the Hidden Cove developers, M. J. Land and Livestock, obtaining an easement from Rocky
Mountain Power to cross the transmission corridor with a public roadway.
The company relied upon the opinion of a local broker for determining the market value of the
underlying property. The market data from the broker suggests that the land value is $1.70 per
square foot or $74 052 per acre. The company targets 70 percent as the factor for easement
transactions involving a roadway. The company has calculated the total easement price for the
proposed public roadway to be $16 375.59 (13 761 square feet x $1.70 per square foot x 0.7 =
$16 375.59.
Proceeds from the sale of the easement will be credited to FERC Account 421.1 , Gain on the
Disposition of Property. The location of the proposed public roadway will not unduly restrict
Rocky Mountain Power s access to the transmission lines. The requested easement is consistent
with others that have been approved by the company, when the requested easement does not
conflict with the corridor s primary use.
Sale of the easement to M. J. Land & Livestock will not adversely affect the company
customers because the sale recovers 70 percent of the value of the property and Rocky Mountain
Power will retain ownership of the property and safe access to its transmission lines. If the
parties are unable to consummate this transaction, Roy City will deny approval of the proposed
Hidden Cove Phase 2 Subdivision due to insufficient access. Rocky Mountain Power is
presently unaware of any adverse impact to another utility that would result from this
transaction.
West Valley City Storm Water Easement
West Valley City owns and maintains an existing storm water drainage ditch that traverses in a
northwesterly direction under Rocky Mountain Power s Terminal - Ninety South 345 kV and
Terminal - Midvale 138 kV transmission lines in West Valley City, Utah. The drainage ditch
has been in existence in its present location for the past 50 years or more and is considered an
integral part of the city's storm water drainage system. After many years of erosion and wear
the ditch bank has grown deeper and wider than its original configuration thus creating an
encumbrance within Rocky Mountain Power s transmission corridor. A search of available
records in the Salt Lake County Recorder s Office has failed to locate any documents conveying
an easement to West Valley City for the drainage ditch.
West Valley City has offered to realign the ditch and construct a below-grade 3 feet x 7 feet
concrete box culvert in an effort to increase storm water flow capacity through the ditch and to
reduce City maintenance costs on the ditch. In addition, the proposed box culvert will reduce the
impact on Rocky Mountain Power s transmission corridor due to erosion and expansion of the
existing ditch.
West Valley City claims it has a prescriptive right to the drainage ditch under Utah statute and
that the ditch was in existence prior to the construction of the company s transmission corridor.
West Valley City also asserts that an easement for the drainage ditch should have been granted to
the city when the transmission corridor was originally acquired. West Valley City requests that
Rocky Mountain Power grant the its request for a drainage ditch easement without compensation
to Rocky Mountain Power in order to mitigate the expense that the City will incur for
realignment of the ditch and for constructing the concrete box culvert.
The location of the proposed storm water drainage easement will not unduly restrict Rocky
Mountain Power s access to the transmission lines. To the contrary, the company s access to the
transmission corridor will likely improve as a result of the City's replacement of the ditch with a
buried concrete box culvert. The requested easement is consistent with others that have been
approved by the company, when the requested easement does not conflict with the corridor
pnmary use.
Conveying this easement to West Valley City will not adversely affect the company s customers
because the easement and proposed infrastructure improvements increase the value of the
property and Rocky Mountain Power will retain ownership of the property and will likely
improve safe access to its transmission lines. If the parties are unable to consummate this
transaction, West Valley City has the option to pursue acquisition of this easement through
eminent domain. Rocky Mountain Power is presently unaware of any adverse impact to another
utility that would result from this transaction.
Mesquite Presidio
Mesquite Presidio, LLC has requested an easement to be located east of Rocky Mountain
Power s Spanish Fork substation and within the company s transmission corridor, which consists
of two 345kV lines and two 138kV lines. The proposed easement is necessary for the
development of the Mapleton Village subdivision in Utah County, Utah. The easement will
include 3 forty-foot wide roadway easements as well as a ten foot public utility easement on each
side of the three roads, for a total of 2.13 acres or 93 131 square feet. Mapleton City has
approved the subdivision plat for the Mapleton Village subdivision, pending tIDal approval from
Rocky Mountain Power.
The company relied upon the opinion of a local broker for determining the market value of the
underlying property. The market data from the broker suggests that the land value is $1.30 per
square foot or $56 628.00 per acre. The company targets 70 percent as the factor for easement
transactions involving a roadway, with lower factors used in extenuating circumstances or when
circumstances exist that impact negotiations between the parties, such as the particular location
of the subject property, the potential future use of the property and its surrounding area, and the
counterparty's ability to obtain an easement through condemnation. As such, the company has
determined the value of the combined roadway and public utility easements to be $84 749.
(93 131 square feet x $1.30 per square foot x 0.70 = $84 749.21).
Proceeds from the sale of the easement to Mesquite Presidio, LLC will be credited to FERC
Account 421.1 Gain on the Disposition of Property. The location of the proposed easements will
not interfere with Rocky Mountain Power s current or future use of the transmission corridor.
The requested easement is consistent with others that have been approved by the company, when
the requested easement does not conflict with the corridor s primary use.
Sale of the easement to Mesquite Presidio, LLC will not adversely affect the company
customers because the sale recovers a percentage of the value of the property and Rocky
Mountain Power will retain ownership of the property and safe access to its transmission lines.
Rocky Mountain Power is presently unaware of any adverse impact to another utility that would
result from this transaction.
Country Pines Phase II
Country Pines Phase II, LLC has requested an easement from Rocky Mountain Power located
within the company s Ben Lomond - Terminal 345 kV transmission corridor. Country Pines has
had a parking lot lease agreement with Rocky Mountain Power since 1997 in the same location
as the requested easement. The lease agreement has been executed in three-year terms with
annual payments to Rocky Mountain Power. Country Pines has requested that the lease be
converted to a perpetual easement for Country Pines employee parking at the Country Pines
Retirement and Assisted Living Community in Davis County, Utah. The easement will include a
50 foot wide parking lot easement and access to the parking lot, for a total of 0.59 acres.
The company relied upon the opinion of a local real estate broker to determine the market value
of the underlying property. The market data from the broker suggests that the land value is
$5.00/square foot or $217 800 per acre. The company targets 50 percent as the factor for
easement transactions involving a parking lot, with lower factors used in extenuating
circumstances or that result from other considerations that might impact negotiations between the
parties, such as the particular location of the subject property, the potential future use of the
property and its surrounding area, and the counterparty's ability to obtain an easement through
condemnation. The company has calculated the total easement price for the proposed parking lot
to be $64 787.50 (25 915 square feet x $5.00 per square foot x 0.50 = $64 787.50).
Proceeds from the sale of the easement to Country Pines Phase II, LLC will be credited to FERC
Account 421., Gain on the Disposition of Property. The location of the proposed easement will
not interfere with Rocky Mountain Power s current or future use of the transmission corridor.
The requested easement is consistent with previous corridor easements that have been approved
by the company, when the requested easement does not conflict with the corridor s primary use.
Sale of the easement to Country Pines Phase II, LLC will not adversely affect the company
customers because the sale recovers a percentage of the value of the property and Rocky
Mountain Power will retain ownership of the property and safe access to its transmission lines.
Rocky Mountain Power is presently unaware of any adverse impact to another utility that would
result from this transaction.
Salt Lake County
Salt Lake County has requested an amendment to its previously recorded easement that was
granted in 1993 as part of the Jordan River Trail system that is located adjacent to the company
Midvalley substation and within a transmission corridor consisting of two 138kV transmission
lines. The county's request for an amendment to its existing easement is the result of a public
safety partnership among various community agencies and local business interests to clean up
the trail system in this area to promote public safety. As such, the amended easement will
enlarge the easement area as well as assign responsibility to the county for patrolling and
managing any unlawful activities within the easement, as well as managing the vegetation
overgrowth and weed control. Salt Lake County's trail easement will be variable in width, but
generally increases from approximately 100 feet wide to 150 feet in width throughout the trail
system.
Public trails have a minimal impact to the transmission corridor. In most cases, the corridor
stays the same with the exception of the walking path, most of which are constructed of asphalt
or gravel. The value of the easement is not based on property value, but rather the company has
historically charged an administrative fee of $1 500 per acre as the fair and reasonable
compensation to cover the company s administrative expenses for such public recreation
easements. The existing easement encumbers 7.4 acres and the amended easement will encumber
67 acres, for a difference of 1.27 acres. The transaction amount of this easement as determined
by the company is $1 905 (1.27 acres x $1 500.00 per acre). Proceeds from the sale of the
easement will be credited to FERC Account 421.1 , Gain on the Disposition of Property.
The location of the proposed easement will not interfere with Rocky Mountain Power s current
or future use of the transmission corridor. The requested easement is consistent with previous
corridor easements that have been approved by the company, when the requested easement does
not conflict with the corridor s primary use. Sale of the easement to Salt Lake County will not
adversely affect the company s customers because the sale recovers a percentage of the value of
the property and Rocky Mountain Power will retain ownership of the property and safe access to
its transmission lines. If the parties are unable to consummate this transaction, Salt Lake County
has the option to pursue acquisition of this easement through eminent domain. Rocky Mountain
Power is presently unaware of any adverse impact to another utility that would result from this
transaction.
The company will meet all requirements regarding these transactions required by other public
utility commissions having jurisdiction over the company s retail operations. A copy of filings
made with other commissions will be provided to the Commission, if requested.
Communications regarding these transactions may be directed to:
Brian Dickman
Manager, Regulation
201 South Main, Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
E-mail: Brian.Dickman~PacifiCorp.com
Justin Lee Brown
Senior Counsel
201 South Main, Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
E-mail: Justin.Brown~PacifiCorp.com
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Jeffrey K. Larsen
Vice President, Regulation