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November 9, 2006 (512) 463-0300

SENATE COMMITTEES PONDER UTILITY RELOCATION COSTS

The Senate Business and Commerce Committee held a joint meeting Thursday with the Transportation and Homeland Security Committee to hear testimony on the procedure and cost of relocating utilities that lie within the state right-of -way. When a road or highway is improved, utility connections that lie within the right-of-way must be moved to make way for new construction.

Amadeo Saenz, Assistant Director of Engineering Operations for the Texas Department of Transportation, testified that the type of road or highway affects who will bear the cost. For state funded roads and highways, utility companies must pay for the relocation of any connections. For highways that are part of the federal interstate highway system, the cost of relocation to utility companies is reimbursed by the state of Texas.

Saenz said that the administrative costs for relocation management tops $30 million per year and requires 430 full time employees. He added that utility relocation can delay road construction if the utility lacks the funds to complete relocation. Saenz recommended a new fee structure that would create a fund to subsidize relocation under those circumstances.

Transportation and Homeland Security Committee Chair Senator John Carona of Dallas questioned the wisdom of transferring additional costs for relocation to utility companies. He said while this may save taxpayers money in lower taxes due to lower transportation costs, they will pay the difference to utility companies in higher rates.

Bryan Gonnerman, Vice-President for Legislative Affairs for AT&T Texas, testified that his company is happy to work with the Texas Department of Transportation in order to make utility relocation smoother and faster. He did advocate two positions before the joint committee. First, he said, Texas should preserve its current practice of full reimbursement of expenses for relocation due to federal highway expansion or improvement. Second, he advocated a cost sharing program between industry and the state, where each party pays for half of the relocation costs for utilities along toll roads. Outside funding sources for these roads, from the federal government in the case of the first, and toll fees in the case of the second, make it feasible for the state to pay for all or part of the cost in order to maintain lower utility rates. Gonnerman added that utility companies consider state relocation policies when determining the level of investment they will put into a state.

A full report on the cost and procedures of utility relocation commissioned last session by House Bill 2702, will be delivered to the Legislature by a special study committee by the end of the year.

Session video and all other webcast recordings can be accessed from the Senate website's audio and video archive pages.

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