Rule 20 Underground Conversions

Undergrounding Electric Lines and Equipment

The California Public Utilities Commission's (CPUC) Rule 20 sets policies and procedures for the conversion of overhead power lines and other equipment to underground facilities, a process called "undergrounding." We support undergrounding because it provides substantial aesthetic benefits to local communities.

Under Rule 20, undergrounding projects are financed by utility rate money, combined rate funds and local tax proceeds, or private funds, depending on whether Rule 20A, Rule 20B or Rule 20C provisions apply. View Rule 20 tariff, as approved by the California Public Utilities Commission.

About Rule 20A

Rule 20A projects are paid for by all our customers and ratepayers, not just those who live in locations where facilities will be undergrounded. City and county governments choose these projects, using a process that includes public participation.

To qualify for full funding through utility rate proceeds, projects must produce a benefit to the general public, not just customers in the affected area, by satisfying one or more of these criteria:

  • The location has an unusually heavy concentration of overhead facilities.
  • The location is heavily traveled.
  • The location qualifies as an arterial or major collector road in a local government's general plan.
  • The overhead equipment must be located within or pass through a civic, recreational or scenic area.

Using CPUC formulas, SCE allocates rate funds to communities for undergrounding based on previous allocations, the ratio of customers served by overhead facilities to all the customers in the community, and the fraction that customers in the community represent of all SCE customers.

Local governments use these formulas to project allocations, which allows them to prioritize projects and develop project schedules. Because funds are limited, local governments sometimes must wait and accumulate their allocations before starting an undergrounding project.

About Rule 20B

If an area is not eligible for Rule 20A or if local government cannot or chooses not to rely on the Rule 20A allocation process, Rule 20B allows rate funds to subsidize an undergrounding project.

The subsidy includes an amount equal to the cost of an equivalent overhead electric system, usually about 20% of the total undergrounding project cost, plus the cost of removing the existing overhead system, which can be 5-20% of the total cost. The remaining cost is funded by local governments or through neighborhood special assessment districts.

Rule 20B projects must be sited along public streets or roads or other locations mutually agreed to by the applicant organization and the utility.

About Rule 20C

Rule 20C enables property owners to pay for undergrounding electric lines and equipment if neither Rule 20A nor 20B applies.

At a local government's request, SCE will meet with government officials and residents to provide status on any Rule 20 project that has been approved.

  • SCE will meet with local officials every 30 days, if the local government requests it, to discuss Rule 20 project construction.
  • The Underground Planning Guide for local governments is being updated by utilities and the League of California Cities to include the how to, when, where and why's of undergrounding.
  • The utility will have a single point of contact to answer questions on Rule 20 for the general public. SCE's contact is Talisa Lee at (714) 285-4336, or at Local governments can contact their SCE region manager or Rule 20 project manager.

A second phase of Rule 20 changes is currently under study. Topics include competitive bidding, incentive mechanisms, establishing a point after which no more overhead facilities will be constructed, and cost recovery for telecommunications undergrounding projects.

What is Rule 20?

Rule 20 is a set of policies and procedures established by the California Public Utilities Commission to regulate the conversion of overhead electric equipment to underground facilities, a process called "undergrounding". Rule 20 determines the level of ratepayer funding for different undergrounding arrangements. See Rule 20ARule 20B, and Rule 20C above.

How Can I Learn If My Neighborhood Is Scheduled For Undergrounding, Or Start A Rule 20C Project?

You should contact your local city or county government offices to find out if your neighborhood is scheduled for a Rule 20 project or to learn the process used in your locality for Rule 20A and Rule 20B projects. To find out how to begin a Rule 20C project, contact Talisa Lee at (714) 285-4336.

Will Power Outages Decrease After Undergrounding? Will Outages Be Longer Or Shorter?

Our information is inconclusive. We believe, however, that in areas that experience frequent heavy winds, outages decrease when lines are undergrounded. In wetter areas, outages may tend to increase due to the effect of water seepage on underground equipment.

The information we have, while inconclusive, seems to indicate that outages tend to be longer with underground facilities, simply because it is more difficult to find problems and replace equipment underground.

Are Underground Facilities More Or Less Expensive than Overhead?

Underground facilities are more expensive to install and maintain than overhead equipment. The cost of overhead equipment is about 20% of the cost of underground. Maintenance costs for underground facilities are also higher than for overhead.

How Much Of My SCE Bill Goes To Undergrounding?

The average cost of undergrounding per residential customer per month is in the neighborhood of a nickel.

Does A Project Have To Meet All The Criteria To Qualify As A Rule 20A Project?

No. Just one.

Aren't Rule 20A Funds Really The Cities' Money?

As with all its capital spending, SCE is required to pay for undergrounding projects up front with money it raises through investor funds. The money is not collected from customers in rates ahead of time. Only after a project is completed can SCE recover the money it spent to plan and construct a Rule 20 project.

Do Allocations Not Represent Actual Funding?

The allocations do not represent actual funding. They are a planning tool for local governments. They represent a qualified right to direct assign a portion of SCE's anticipated capital budget to qualified Rule 20A projects. Some of the language in the Rule 20 tariff seems to suggest that the allocations represent actual funds, but that is not the case.

Did California's Energy Crisis Affect Rule 20?

The energy crisis and the financial crisis it created for SCE delayed undergrounding plans for up to two years. SCE was not able to fund allocations during that time. The crisis also resulted in a delay in changes to Rule 20.