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° r RIVERSIDE PUBLIC UTILITIES Board Memorandum P LY L 1 11 T 1 L I I I L 5 BOARD OF PUBLIC UTILITIES DATE: November 18, 2011 ITEM NO: 12 SUBJECT: NEW POLE ATTACHMENT FEES PER CALIFORNIA ASSEMBLY BILL 1027 ISSUE: That the Board of Public Utilities approval the new pole attachment FEE per California State Assembly Bill [AB] 1027, RECOMMENDATIONS. That the Board of Public Utilities recommend that the City Council: 1. Approve the new pole attachment fee of $23.50 per attachment annually, in accord with AB 1027; and 2, Approve the Pale Attachment and Conduit License, and authorize the Public Utilities General Manager to execute an agreement with communication providers that apply for such agreement. BACKGROUND: The majority of wood poles throughout California and the United States are owned and operated by an electric utility company. In an effort to avoid a proliferation of utility poles, the electric utility industry has leased available space on existing poles to communication providers such as telephone and cable television providers (CATV). Riverside Public Utilities (RPU) has allowed various communications providers to attach their facilities to its poles through an approved Pole Attachment and Conduit License Agreement executed with each company. The communications providers are charged an annual "per attachment' leasing fee based on a formula using the cost of installation of a typical pole, as well as the depreciation of that pole. Due to inflation and other factors, that rate is periodically reviewed and has increased several times over the past 10-15 years. Several companies, who have contracts dating back 10 years or more, are currently billed at an annual rate of $25 per attachment. Several new providers have executed agreements within the past several years and are billed at the more current annual rate of $40 per attachment. On October 8, 2011, Governor Brown signed into law AB 1027 which provides that each Publicly Owned Electric Utility's annual fee charged for the use of their utility pole shall not exceed "the annual costs of ownership of the pole multiplied by 7.45% of the total usable space of that pole". The annual costs of ownership includes capital, operation and maintenance, depreciation costs and other factors. Applying the new formula results in an annuai pole attachment fee of $23.50, As illustrated below, communication companies with existing contracts that have expired and any new companies requesting attachment rights will charged the new rates specified by AB 1027 beginning January 1, 2012. Companies with more recent contracts will continue paying their currently agreed upon rate until their contracts expire, at which time they will be updated to the new rates.