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

There is a wealth of information in the 24,541-word EEI Out of Sight, Out of Mind report – far too much to include in this brief summary of its highlights. In addition to portions of the report summarized in this article, there are other sections that include basic information about the nation’s power infrastructure and its growth, data about outages caused by storms, a comparison of the reliability of overhead and underground electric systems, state policies utility approaches to undergrounding, and undergrounding studies completed by several states. The complete study can be downloaded from the EEI web site (http://www.eei.org).

Future of undergrounding
The report concludes that while state commissions will continue to be pressured to study the feasibility of undergrounding electric facilities following major outage events, it is highly unlikely that any commission will ever mandate the complete undergrounding of any utility.

Summarizing key points of the study’s conclusions:

“No study has ever come close to showing an economic justification for undergrounding,” says the report. “However, that does not mean that utilities, customers and commissions should not work together to develop undergrounding approaches where funding, resources and support are available and in agreement to support undergrounding projects.

“For customers, improved aesthetics and the hope that underground electrical facilities will provide greatly enhanced electric reliability will continue to be the driver for their desire for undergrounding of utility facilities.

“This study has demonstrated that utilities see value in and are open to undergrounding their overhead facilities. However, the challenge for utilities and customers is the high cost for building new or converting existing facilities to an underground electrical system. Data has shown that underground versus overhead costs can be between five to 10 times greater for transmission and distribution construction.

“Given the cost impact of converting existing overhead distribution facilities to underground and customer concerns about utility cost increases, a wholesale move to undergrounding most existing utility distribution facilities is probably prohibitively expensive. However, a few states and utilities have developed policies and procedures designed to encourage the utility and the local municipality to work together to convert select overhead areas to underground.