SB 2022

Present law authorizes the commissioner of transportation ("commissioner"") to require the relocation of utility facilities located on public highway rights-of-way when necessary for highway construction projects undertaken by the department of transportation (""department"") . As used in that provision, a “ utility” means a privately, publicly, or cooperatively owned line, facility, or system used, available for use, or formerly used to transmit or distribute electricity, liquids, steam, sewerage, water, fuel gas, natural gas, or telephone or telegraph services to the public. Present law requires the utility owner to relocate cooperatively and, in the manner, and time prescribed or approved by the commissioner and to pay all relocation costs that the state is not authorized to pay by law. Present law requires the utility to submit to the department a relocation plan, cost estimate, and schedule of calendar days for completing the relocation, and requires the department to approve the plan and schedule if they are found reasonable. If the department and the owner fail to agr ee on a reasonable plan and schedule, present law authorizes the owner to proceed under a reservation of rights notice filed within 10 days after the department issues a notice to proceed, stating the owner ' s objections and reasons, and making the reservati on of rights part of the administrative record for any subsequent contested case. BROADBAND, FIBER OPTIC, AND TELECOMMUNICATION SERVICES As used in this bill and the provisions above, this bill expands the definition of ""utility"" to expressly include systems used, available for use, or formerly used to transmit or distribute broadband internet or fiber optic services and telecommunication services to the public. This bill also clarifies that the policy and reimbursement provisions governing utility relocations apply equally to all utilities furnishing utility service, including broadband internet, fiber optic services, and telecommunicat io n services, through a system of pipes, conduits, cables, or wires devoted to public utility service. REIMBURSEMENT FOR THE COST OF RELOCATION Present law authorizes the commissioner to reimburse a utility for the cost of relocation and to include the cost as a highway construction project cost when the relocation cost arises from relocation of a utility facility located on a public highway rig ht-of-way and the highway construction project is undertaken by the department, subject to specified written agreements and conditions. This bill requires the commissioner to reimburse a utility for the cost of relocation, including when the utility performs relocation through its own employees or a contractor, subject to reimbursement requirements established by rule. The commissioner must promulgate rules governing reimbursement of relocation costs. To comply with these provisions, relocation projects costing less than $2.5 million must be reimbursed at the actual cost of the relocation to the utility. For projects exceeding $2.5 million, the reimbursement must be no less than $2.5 million per proj ect and must allow the commissioner to authorize a higher amount. In determining reimbursement amounts and any discretionary increased reimbursement authorizations, this bill requires the commissioner to consider factors that include all of the following:  The scope, scale, and complexity of the overall project necessitating utility relocation.  The nature, extent, and complexity of the utility relocation work required, including engineering, design, permitting, and construction components.  The financial, operational, and service impacts on the affected utility or utilities, including impacts on service reliability, infrastructure integrity, and the continuity of utility operations.  The effect of required relocation on the utility's ratepayers, including potential cost burdens and the utility's duty to maintain just and reasonable rates.  Any extraordinary or unforeseen conditions contributing to increased relocation costs, including geographic, environmental, geologic, or right-of-way constraints.  The extent to which the department's project schedule, design requirements, or right-of-way acquisition timelines impact the cost and feasibility of the utility relocation.  The availability, adequacy, and cost of alternative relocation routes or methods.  Any other factor the commissioner determines relevant to ensuring that utility relocation costs are reasonable, equitable, and do not impose undue financial hardship on utilities or their ratepayers. This bill provides that the eligible reimbursement is the amount authorized, including any discretionary increase, under the rules in effect at the time the utility relocation contract is executed by all parties. STANDARD FOR DETERMINING REASONABLENESS OF RELOCATION PLAN This bill establishes a new standard for determining the reasonableness of a utility's relocation plan. The department must approve the owner's plan if the plan is reasonable. The plan is deemed reasonable if the proposal relocates the utilities at the lowest cost to the utility and its ratepayers. If the department requires additional relocation or adjustment after the owner has completed the initial work, then the department must reimburse the owner for those additional costs in accordance with the ne w reimbursement rules. The department must not notify an owner to begin relocation until all relevant health, governmental, and environmental regulatory agencies have approved the plan. DISPUTES OVER RELOCATION COSTS OR METHOD OF PAYMENT This bill clarifies that a dispute over relocation costs or the method of payment is not grounds for a delay in relocation. APPLICABILITY This bill takes effect July 1, 2026, for all purposes other than promulgating rules, and takes effect upon becoming a law for purposes of rulemaking. The reimbursement rules apply based on the rules in effect at the time the utility relocation contract is executed by all parties."