Unequal Taxation?

Unequal Taxation?

Below is a Florida Public Service Commission paper on the deficiencies of burying power lines. It's worth a read to get a better understanding of what the Longboat commission is proposing. The commission is asking voters to agree to tax themselves 25 million dollars to bury power lines on just Gulf of Mexico Drive.

My two major complaints concern unfair and inequitable tax apportionment and the economic inefficiencies of the commission plan. 

The commission's special tax assessment for undergrounding power lines along GMD, has the great majority of taxpayers paying an identical amount, no matter where your property is located.

The town's two special beach maintenance taxing districts acknowledges that those properties lying west of GMD receive greater benefit, from maintaining beaches, than those properties located east of GMD. This includes financial benefits in the form of property values. 

Under the current commission special assessment referendum, the commission ignores their own beach taxing rational and asserts that all properties on the island will enjoy identical benefits from undergrounding GMD. I do not believe that anyone, besides the commissioners, thinks that properties on GMD will not experience increased property values as a result of burying power lines in front of their homes.

Likewise, I do not believe that many residents believe that the various neighborhoods will be able to facilitate undergrounding projects in individual areas where there are existing overhead power lines, after GMD is undergrounded. The commission's GMD or nothing plan will have negative impacts on future efforts to underground the entire island. Is is a bad plan!

PUBLIC UTILITY COMMISSION ANALYSES

Florida (2007-2008)

In 2006, the Florida Public Service Commission directed each investor-owned electric utility in the state to investigate the implications of converting their overhead electric distribution systems to underground. The primary focus of the project was the impact of undergrounding on the performance of the electric infrastructure during

hurricanes, i.e., the ability of the electric system to withstand high winds, storm surges, and other damage from hurricanes and to minimize the number and duration of customer interruptions

The project was divided into three phases. Phase 1, published in 2007, reviewed existing research, reports, methodologies, and case studies. The literature review identified a range of benefits and costs of undergrounding. The benefits include increased reliability, improved aesthetics, and decreased costs for vegetation management. On the other hand, the review found an average cost of $1 million per mile, although it noted that actual costs could vary widely depending on customer density, terrain, and other factors. The review found that the costs of undergrounding are “… far in excess of the quantifiable benefits presented in existing studies, except in rare cases where the facilities provide particularly high reliability gains or otherwise have a higher than average impact on community goals.” The literature indicated that the wholesale conversion of overhead distribution systems to underground would require electricity rates to approximately double. This phase of the report is available athttp://warrington.ufl.edu/purc/docs/initiatives_UndergroundingAssessment.pdf.

Phase 2, also published in 2007, examined four undergrounding projects in Florida, two of which were done in conjunction with road widening. In two, the underground lines were substantially longer than the overhead lines they replaced (by 100% in one case and by 143% in the other). The increased length in these cases was due to an underground loop that was built to provide flexibility in responding to outages. Preliminary data indicated that undergrounding did not significantly affect the reliability of the affected circuit outside of storms. It found that the high initial costs of undergrounding were not fully justified by such things as reduced hurricane damage and reduced operations and management costs. The phase 2 report is available at http://warrington.ufl.edu/purc/docs/initiatives_UndergroundingAssessment2.pdf.

Phase 3 was published in 2008. It developed and tested a methodology for analyzing the costs and benefits of specific undergrounding proposals. The methodology has two components: a normal weather assessment and a hurricane assessment. The model used in the normal weather assessment includes the basic cost of utility capital and operations. It also includes reliability information that allows for the calculation of customer interruption rates and interruption-related costs. The hurricane model determines infrastructure damage and related costs associated with tropical storms of hurricane strength that make landfall in Florida.

The report notes that the methodology is specific to Florida, but the general approach is valid wherever extreme weather events have the potential to wreak havoc on electricity infrastructure. It also states that the model requires specification of many parameters and makes many assumptions. For many of these parameters and assumptions, there is little basis in historical data. The tool should be viewed as a “calculator” and the user must make appropriate decisions about the parameters and assumptions.

The report notes that there are several intangible benefits and costs to undergrounding. These include aesthetic benefits such as elimination of overhead facilities, improved landscaping, and the potential positive impact on property values. The intangible costs include reduced flexibility for both utility operations and system expansion. Undergrounding can have an adverse environmental impact including erosion and disruption of ecologically sensitive habitats.

The report notes that underground equipment is prone to damage by storm surges in hurricanes and by excavations near the lines. The time needed to repair underground lines is often longer than for overhead lines and the specialized crews needed for underground repairs are often scarce during restoration. The report concludes that “it is quite possible that undergrounding an existing overhead system in a coastal area may result in more hurricane damage and longerrestoration times for customers” (emphasis in original). The phase 3 report is available at http://warrington.ufl.edu/purc/docs/initiatives_UndergroundingAssessment3.pdf. 

Source: https://www.cga.ct.gov/2011/rpt/2011-R-0338.htm