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What’s The Rush?

By J.J. Gasparotti
By J.J. Gasparotti

Have you ever made a major purchase in a hurry and gotten a good deal? That is a hard thing to do. Usually this type of transaction involves an emergency or you’re obsessed with something new and shiny. This clouds your vision making it hard to be the smart shopper you should be.

Our city presently finds itself in this position. It seems obsessed with doing something big. Things were rolling along pretty good with the village entrance until sticker shock set in.

It now seems the city may have found a winner in the doing something big category with the under grounding of utilities. By combining their desire to do something big with an impending emergency they may have found a way to deal with sticker shock.

They are proposing giving Edison a $100 million gift of infrastructure improvements that will cost the tax payers almost $250 million to pay for. That’s a quarter billion dollars. That is BIG.

This is the projected cost of under grounding utilities along Laguna Canyon Road to create an evacuation corridor. These costs could rise. Please bear in mind that this is the same city that told us Montage Park would cost us around $1 million when in the end the bill was closer to $9 million.

Did you know that Edison was the taxpayer’s friend? One worthy of a $100 million system upgrade at our expense. This is the same Edison that has a number of serious allegations against it. Allegations that don’t sound like the actions of an entity that has our best interests in mind.

Maybe none of that matters if it’s an emergency and public safety is at stake. Right?  That’s why we’re going to give Edison this gift. We’re providing for a emergency evacuation route in case of fire. But are we really?

During the fire in October of 1993 nobody was evacuating out Laguna Canyon Road. They couldn’t and it wasn’t because some power pole that could be made stouter fell down. They couldn’t because Laguna Canyon was a raging inferno. An inferno that started in Irvine and nothing we do in Laguna will fix that.

There doesn’t seem to be any empirical data that shows underground utilities increase fire safety. Insurance companies are not handing out fire insurance discounts for under grounding. There’s only anecdotal evidence supporting the assessment of risks and possible benefits the city’s proposal provides. We should expect a higher standard to support this size of investment.

One of the concepts in economics is the allocation of resources. Some students have a tough time with this concept. A good way to grasp it is: It’s Saturday night. You’ve got $50. If you spend it all on gas for your car you’ll have nothing left for beer.

If we spend a quarter billion on under grounding the canyon, how much will we have left for something else? We’re talking about 30 years of payments here. That is a long time. A lot can change in that period of time. Will Edison and our quarter billion dollar gift even still be around then?

Think about how you make phone calls. Most of us have cut the cord for landline phones. Smart phones weren’t even around a dozen years ago.

In 2011 a solar power system for your home didn’t have a battery and cost $35,000 on average. In 2016 the average cost for a system about 20% bigger was $17,000 and today you can buy a battery for that system for another $6,000. There has recently been news of a new solar cell production technique perfected by an American company that reduces the cost of solar cells to a third of what they are today.

It isn’t clear that the old technology of converting fossil fuels into electric energy and then transmitting it over long distances will survive the economic challenges presented by onsite power generation such as solar.

When you look at the city’s costs projections to underground the residential neighborhoods these calculations becomes crushing. The city projects a cost of $200 a month to each property under grounding. Not including the private improvements required. This is more than most folks power bill or enough to pay for a solar system and a battery today.

So if we spend it on under grounding will we have any money left for solar? We better be sure we are getting real value for our dollar and not just a feather for somebody’s cap for doing something big.

 

JJ Gasparotti moved to Laguna Beach with his family when he was 11yrs old. He has loved it ever since. This column is the latest of his efforts to repay this home town that has given him so much and allowed him to take even more.

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