Despite Higher Costs, Electric Utilities Increasingly Favor Undergrounding

Update EEI Report Says Aerial Lines Remain Far More Economical
By Jeff Griffin, Senior Editor | December 2013, Vol. 68 No. 12

The report covers customer expectations, storms and damage, reliability of overhead and underground electrical systems, utility infrastructure, benefits and challenges of undergrounding, costs of undergrounding, state policies and utility approaches to undergrounding, and state undergrounding studies. There are appendices about preparation of the study, utility policies for new underground construction, utility policies for converting existing overhead facilities to underground and additional details about state undergrounding studies.

Cost figures of previous EEI underground studies have been frequently used by various organizations – often out of context to emphasize the greater cost of underground construction compared to overhead construction. Many times these cost comparisons have been used to justify not initiating undergrounding programs.

The 2012 report includes various cost variables and comparisons and recognizes multiple other factors that affect the practical feasibility of undergrounding.

The EEI report’s executive summary observes that following any major storm where a large percentage of the electrical grid is affected for an extended period, utilities, customers, public officials and the media will undoubtedly study the performance response of any utility impacted by the storm. It is not uncommon for this focus to turn to discussing whether plans on migrating from an overhead to an underground electrical infrastructure would resolve or substantially mitigate weather related outages.

Costs of undergrounding

Conversion costs can vary significantly depending on location-specific issues. “While some recent data suggests that conversion costs are not much higher than initial installation costs (largely because of the salvage value of equipment),” says the report, “these numbers do not take into account other costs associated with conversions: the cost of converting individual customers’ services/metering points so they can be connected to the new underground facilities and the substantial disruption caused by the undergrounding construction process (avoiding conflict with or limiting the damage to existing trees, walls, fences and other underground utilities).”

Undergrounding proponents would be quick to point out that horizontal directional drilling has proven it can mitigate much of such damage, offering substantial cost savings compared to open-cut construction and plowing.