HomeMy WebLinkAbout2013-05-01 PACKET 12.A.REQUEST OF CITY COUNCIL ACTION COUNCIL
MEETING
DATE 5/1/13
PREPARED BY: Community Development
ORIGINATING DEPARTMENT
AGENDA
ITEM #
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Jennifer Levitt
STAFF AUTHOR
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COUNCIL ACTION REQUEST
Workshop: Electrical Undergrounding
STAFF RECOMMENDATION
Workshop: Electrical Undergrounding
BUDGET IMPLICATION $N/A $N/A N/A
BUDGETED AMOUNT ACTUAL AMOUNT FUNDING SOURCE
ADVISORY COMMISSION ACTION
❑ PLANNING
❑ PUBLIC SAFETY
� PUBLIC WORKS
❑ PARKS AND RECREATION
❑ HUMAN SERVICES/RIGHTS
❑ ECONOMIC DEV. AUTHORITY
❑
SUPPORTING DOCUMENTS
DATE
2/11/13
REVIEWED
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� MEMO/LETTER: Memo from Jennifer Levitt dated 4/25/13
❑ RESOLUTION:
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
� OTHER: Publications on Undergrounding
ADMINISTRATOR'S COMMENTS:
Administrator
APPROVED
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❑
❑
❑
❑
❑
❑
DENIED
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❑
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��
Date
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COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER
City of
Cottage Grove
Minnesota
To: Honorable Mayor, City Council, and Ryan Schroeder
From: Jennifer Levitt, Community Development Director/City Engineer
Date: April 25, 2013
Subject: Workshop: Electrical Undergrounding
Background
The City of Cottage Grove has contemplated for many years requesting Xcel Energy to under-
ground aerial power lines in the community. The City has the ability to make that request of Xcel
Energy, but it does come with a cost to the City. Aerial electrical lines do detract from the
aesthetic appeal of a road corridor. There are benefits associated with underground electrical
facilities such as reduced maintenance due to storm damage, improved reliability, improved
public safety, and improved property values. The publication "The Power to Change the Face of
America...Converting Overhead Utilities to Underground" (02009 Underground 2020) outlines
the issues involving underground electrical lines and is included in the workshop packet.
In all new residential areas electrical lines are installed underground. Currently, many of the
aerial power lines follow major road corridors in the community, such as Hinton Avenue, East
Point Douglas Road, 70th Street, 65th Street, 90th Street, Jamaica Avenue, and 80th Street.
In order to better understand what a transmission line is, Xcel Energy provides this definition
and description:
Think of transmission lines as an "interstate highway system" for electricity: They are a
vital link used to deliver electricity over long distances from power sources to transmis-
sion substations closer to homes and businesses.
There are about 160,000 miles of overhead transmission lines 230 kilovolt or higher in
the United States (based on a 2002 Department of Energy study); primarily because of
cost, less than 1 percent is underground. The lines interconnect 750,000 megawatts of
generating capacity nationwide.
A strong transmission system assures reliable electricity. Utilities connect their transmis-
sion systems to neighboring systems run by other utilities. These interconnected systems
form regional grids that allow power to flow from one area to another, ensuring reliable
and efficient electric delivery to customers, even during emergencies.
Electricity also cannot be stored; it has to be generated, transmitted and distributed the
moment you turn on your computer or any other appliance. Traveling at almost the speed
of light — 186,000 miles a second — electricity arrives where it's demanded at almost the
same time it's produced.
Representatives from Xcel Energy attended the Public Works Commission meeting on February
11, 2013. They reviewed the constraints associated with undergrounding electric lines, reliability
Honorable Mayor, City Council and Ryan Schroeder
Workshop: Electrical Undergrounding
April 25, 2013
Page 2 of 3
issues associated with undergrounding vs aerial, and the costs associated with undergrounding
requests. A memo from Colette Jurek and Steve Koski, Xcel Energy, is enclosed with their res-
ponses to additional questions that were asked at the Commission meeting to provide further
information related to life span of facilities, service trips, accident data, and liability. At the
meeting the Public Works Commission was presented a publication called "The High Price of
Aesthetics, The Benefits of Burying Existing Overhead Systems in Most Instances Do Not
Justify the High Price Tag." A copy of this publication is included in the workshop packet.
Discussion
The City has reviewed seven different road corridors in the community that could be considered
for undergrounding electrical lines; they are outlined in the attached map. Xcel Energy has pro-
vided the City a rough estimate for costs associated with undergrounding requests. There are
many factors that can affect the cost of a project, such as encountering rock, electrical looping
for back feeding an area, how many switching stations are needed, and how many intersections
are crossed as part of the project and the associated challenges with those crossings.
The table below represents the estimated costs for each corridor:
In the CIP workshop with the City Council on March 23, 2013, the above corridor under-
grounding projects did not rank as a mandated, priority, or desired project in the exercise. The
corridors ranked in the lowest tier of potential projects.
There are three specific projects that the City has requested cost estimates for that are slated
for immediate construction and they are as follows:
Cost Estimate for Underground Electrical
East Point Douglas Road — Menards to Walmart: $117,491.83
The cost estimate to relocate electrical distribution underground to include the removal of 13
poles along East Point Douglas Road, installation of approximately 2,700 feet of 750AL under-
ground, installation of three load breaker centers, and other associated equipment. Cost break
down includes five poles at incremental cost of $29,010.86 and eight poles at age depreciation
value of $88,480.97.
Honorable Mayor, City Council and Ryan Schroeder
Workshop: Electrical Undergrounding
April 25, 2013
Page 3 of 3
Keats Avenue and 70th Street, West of Joliet Avenue South: $48,672.35
The project will consist of the relocation of the pole line on the south side of 70th Street from
Joliet Avenue to Keats Avenue. It will go underground at the pole west of Joliet to the north side
of 70th, from that point run east and rise up on a pole that is just north of the intersection of 70th
Street and Keats Avenue. It will also include installation of a LBC to feed customers. The loca-
tion of the LBC will be near the intersection of 70th Street and Jorgensen Lane. All cable
installed will be by directional bore.
Hinton Avenue, between 70th Street and 80th Street: $485,000 (+/- 30%�
Estimate includes the installation of four Padmount Switches (PMH), two Load Break Centers
(LBC), 6,000 feet of 750a1 three-phase cable, 2,000 feet of 1/Oal 3-phase cable.
For a more refined analysis, an engineering fee will be required in the amount of $5,000.00. An
engineering study is required due to the number of system taps coming off of this feeder system
requiring load analysis of each tap to understand how system taps can be split and/or joined
based on loads.
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Executive Summary
More than 3 million miles of electrical cables are strung overhead across the country.
Add to that at least 180 million telephone and cable TV lines, and iYs no wonder
hurricanes, tornadoes, fires and ice storms are wreaking havoc on America's electrical
systems each year, causing utility outages that last days, weeks and longer.
Power outages over extended periods present major health and safety concerns and
economic losses. In the aftermath of these storms, there is invariably an outcry from the
public, the government and the media to place overhead utilities underground.
Concerns about the reliability of overhead lines, increases in their maintenance and
operating costs, and issues of public safety and quality-of-life are leading more and more
utilities and municipalities to the realization that converting overhead distribution lines to
underground is the best way to provide high-quality service to their customers.
According to a report by the Edison Electric Institute, "almost 70 percent of the nation's
distribution system has been built with overhead power lines." Over the past 15 years or
so, however, "appro�mately half the capital expenditures by U.S, investor-owned
utilities for new transmission and distribution wires have been for underground wires."
Making such a conversion is rarely justified solely on the basis of costs. For utility
companies, undergrounding provides potential benefits through reduced operations and
maintenance (O&Ivn costs, reduced tree trimming costs, less storm damage, reduced loss
of day-to-day electricity sales, and reduced losses of electricity sales when customers lose
power after storms. Creative funding options are often available to make the goal of
undergrounding a reality.
For some conversions, the evolution of horizontal directional drilling and the ability to
physically locate underground utilities using vacuum have been key to the success of
many of these projects.
The Situation
The headlines are everywhere. In September 2008, heavy winds in Ohio caused an outage
which deprived approximately 2.6 million customers of power. In December 2008, ice
storms in the northeast cut power to millions of customers. Overhead power lines have
caused devastating fires in San Diego County.
In addition to the utility's restoration costs, social costs of outages include lost revenue
and other business disruptions, public safety and security, and convenience.
As so-called 100-year storms and events happen with frightening regularity, forecasters
anticipate that increased hurricane activity will continue to occur in some regions and
extended drought conditions will continue in others, causing significant impact to
utilities, primarily in the Gulf, Atlantic and Pacific coastal areas.
According to Michael Beehler, associate vice president of Burns and McDonnell and
moderator of the utility industry's 2009 DistribuTech conference held in San Diego, "the
total restoration costs for Hurricanes Katrina, Rita, Gustav, and Ike totaled approximately
$2 billion. Some power lines were downed during both Hurricane Rita in 2005 and
Hurricane Ike in 2008. We rebuilt the system and then we rebuilt it again."
In September 2003, Hurricane Juan, one of the most damaging hurricanes to impact
Canada, made landfall in Nova Scotia, resulting in more than $24 million in damage to
Halifax Regional Municipality infrastructure and property. In addition, Nova Scotia
Power Inc. (NSPI) incurred costs of $12.6 million as a result of the storm or
approximately 11% of earnings that year. In just the next 14 months, Nova Scotia was
struck by two more storms resulting in above-average power outages and substantial
power infrastructure repair costs. The majority of the outages resulted from downed
power transmission and distribution lines due to high winds, fallen trees and branches, ice
and snow.
Sample of Electric Outages Caused by Severe Storms: 1996-2005 (Not inclusive of
all storms)
Storm Event Utility Date Customers OutageDuratfon
Im acted Da s
Hurricanes Entergy 2005 832,000 Power never
Katrina & Rita restored for some
in New Orleans
Hurricane Wilma Florida Power & 2005 3,200,000 18
Li ht
Hurricane Florida Power & 2004 2,800,000 12
Francis Li ht
Hurricane Isabel Dominion, VA 2003 1,800,000 14
Power BGE 2003 790,000 8
Ice Storm Kentuck Utilities 2003 146,000 8
Ice Storm Duke 2002 1,375,000 9
Carolina Power 2002 561,000 8
Ice Storm KCPL 2002 305,000 10
Snowstorm Carolina Power 2000 173,000 5
Hurricane Floyd Virginia Power 1999 800,000 5
Carolina Power 1999 537,000 6
BGE 1999 500,000 8
Ice Storm Pepco 1999 213,000 5
BGE 1999 360,000 5
Ice Storm Central Maine 1998 250,000 21
Power
Ice Storm Virginia Power 1998 401,000 10
Hurricane Fran Virginia Power 1996 415,000 6
1996 450,000 9
Ice Storm Duke 1996 650,000 8
Carolina Power 1996 790,000 10
Source: Press Accounfs of Storms
Table used in A Study on the Costs and Benefrts of Undergrounding Power Gtnes. Prepared for the Edison
Electric Institute (EEI).
Add to that the aging conditions of overhead lines and poles, the encroachment of
overgrown trees, aesthetic considerations and public safety concerns — such as
vehicle/utility pole accidents which result in approximately 1,000 fatalities every year,
and live-wire contact injuries — and it's no wonder utilities are converting overhead
distribution lines, and eventually transmission lines to underground.
Success - Edmond Electric
Taking an incremental, section-by-section approach to conversion has proven to be a
win-win for many utilities and municipalities, including municipally-owned Edmond
Electric, (Oklahoma).
A case study, published by Dean Sherrick, distribution superintendent, describes Edmond
as a`bedroom community' of Oklahoma City where residents appreciate their trees and
quality of life. Citizens wanted to be rid of their lines and poles, in part because of
aesthetics, and in part because Edmond is located in "tornado alley". The community is
also prone to ice storms.
According to Sherrick, who oversaw the community's overhead to underground
conversion, "Given the aging condition of some of our 96-year-old company's poles and
facilities, our utility first identified azeas already in need of repair and upgrade. By
starting with an azea that needed attention, some of the conversion expense couid be
absorbed in annual maintenance and upgrade costs already budgeted." First project
completed was Henderson Hills, converting nearly 500 residents to buried electric cable
in conduit. The next project targets a similarly sized neighborhood where outages have
been high and older equipment needs replacement and repairs."
Sherrick credits horizontal directional drilling (HDD) with reducing installation and
restoration costs, and minimizing disruptions to the community, tr�c problems and
recurring sinking caused associated with open trenches, setting a precedent for future
projects. Their city council approved a revised budget line item for overhead to
underground conversion covering five years.
Project Power On (Undergrounding) — AmerenUE
AmerenUE, which serves customers in Missouri, is undergoing a$300 million core
reliability program, designed to better protect its delivery system against the forces of
nature. This effort includes substantial underground cabling in areas where
undergrounding is feasible to improve reliability. The project planning, design, and
construction represent a major collaborative effort between UE, county and municipal
governments, the region's contracting industry and UE customers. UE also has identified
some "must-do" undergrounding projects that supersede the local government
engagement process. In all cases, the upgrades will be designed to improve reliability, not
just the cosmetic appearance of the system.
The undergrounding projects could include high- or low-voltage overhead lines and may
include service conductors physically attached to customer residences and/or businesses.
In some cases, small portions of overhead circuitty may be reconstructed or relocated
before they are placed underground.
The project is part of a$1 billion initiative to improve reliability and protect the
environment.
Potential Benefits of Underground Electric Facilities
Advantages of underground lines include aesthetics, higher public acceptance, perceived
benefits of protection against electromagnetic field radiation (which is still present in
underground lines), fewer interruptions, and lower maintenance costs. Failure rates of
overhead lines and underground cables vary widely, but typically underground cable
outage rates are about half of their equivalent overhead line types.
Potentially far fewer momentary interruptions occur from lightning, animals and tree
branches falling on wires which de-energize a circuit and then re-energize it a moment
later.
Primary benefits most often cited can be divided into four azeas:
Potential[y Reduced Maintenance And Operating Costs
• Lower storm restoration cost
• Lower tree-trimming cost
Improved Reliability
• Increased reliability during severe weather (wind-related storm damage will be
greatly reduced for an underground system, and areas not subjected to flooding
and storm surges experience minimal damage and interruption of electric service.
• Less damage during severe weather
• Far fewer momentary interruptions
• Improved utility relations regarding tree trimming
Improved Public Safety
• Fewer motor vehicle accidents
• Reduced live-wire contact injuries
• Fewer Fires
Improved Property Values
• Improved aesthetics (removal of unsightly poles and wires, enhanced tree
canopies)
• Fewer structures impacting sidewalks
Tangible Savings
The following chart, which summarizes the total benefits that the Virginia State Corporation
Commission calculated Virginia utilities might realize if the state's entire electric distribution
system were placed underground, shows tangib(e metrics for projecting savings to utilities. It
shows an annual projected savings of approximately $104 million.
Cost Savin Item: $/Year
O erations & Maintenance no savin s
Tree Trimmin $ 50,000,000
"Hundred-Year" Post Storm Rebuild $ 40,000,000
Reduction in Day-to-Day Lost Electricity Sales $ 12,000,000
Elimination of Lost Electricity Sales From $ 2,000,000
"Hundred-Year" Storms
Total $ 1
'Placement of Utllity Distribution Llnes Underground"
Societal Benefits
The following summarizes some of the societal benefits, including enhanced electric
reliabiliiy to the economy, reduced economic losses to customers due to fewer power
outages after major storms, and reduced injuries and deaths from automobiles striking
utility poles.
Reports indicate nine out of 10 new subdivisions bury power lines. Some of the cities
which have already developed comprehensive plans to bury or relocate utility lines to
improve aesthetics, include:
• Colorado Springs, Colorado
• New Castle, Delaware
• Frederick, Maryland
• Saratoga Springs, New York
• San Antonio, Texas
• Williamsburg, Virginia
• Tacoma, Washington
Utilities vary in how they charge for providing underground service to new residential
construction. Some samples of residential undergrounding requirements are illustrated in
the following:
Utili State R uirement
SDG&E, PGE & SCE CA Customer/Developer pays for
trenching & backfilling. Utility
a s remainin costs.
Atlantic City Electric NJ Customer/Developer pays
$802.74 + $4.35 per front foot for
each home. Utility pays
remainin costs.
Cobb Electric Membership Corp. GA CustomerJdeveloper pays $260
per customer. Utility pays
remainin costs.
Green Mountain Power VT Customer/Developer pays for
trenching & backfilling. Utility
a s remainin costs.
Nantucket Electric Co. MA The utility pays up to $837.85.
The customer pays the remaining
costs.
Consolidated Edison NY The utility charges the customer
the differential in charges for
uivalent overhead construction
Mississippi Power MS Developer pays the cost
differential above what it would
cost to install overhead lines
Source: "Utiliry Undergroundtng Programs'; Scientech, May, 2001
In addition, creative funding options are being implemented using special assessment
areas, undergrounding districts, and state and local government initiatives.
For example, according to a Florida Power & Light press release, in January 2006, the
company announced that subject to Public Service Commission approval, it intended to
"pay for 25 percent of the cost of converting overhead lines to underground for local
govertunent-sponsored conversions. Florida Power & Light is hoping its actions will
encourage local governments to take the necessary steps to invest in undergrounding."
South Carolina Electric & Gas has established a special undergrounding program,
approved by the South Carolina Public Service Commission. Under the program, if the
local municipality agrees to contribute a matching amount, SCE&G contributes 0.5
percent of the gross receipts it is obligated to pay to the municipality. This money goes
into a special undergrounding fund.
Progress Energy has included a provision in its line extension policy where, upon request,
it will convert overhead facilities to underground without charge in a downtown
commercial area, provided the area has sufficient density. The municipality must agree to
receive underground street lighting service and satisfy certain other requirements
The Ciiy of Boulder, Colorado assists individuals or groups of property owners with
undergrounding existing utilities adjacent to their property through the Xcel Energy
Undergrounding Credit. Xcel is required to make one percent of the preceding year's
electric revenues available each year for undergrounding electric distribution lines in
public places. Program participants pay 50 percent of undergrounding costs up to
$100,000, and 100 percent of program costs in excess of $100,000.
Conclusion
After decades of discussion, municipalities and electric utilities are discovering that the
many real and societal advantages to undergrounding power lines go far beyond just
avoiding infrastructure damage from storm events such as hurricanes and ice storms.
In fact, cost benefits accrue from reducing day-to-day maintenance and operating costs,
improving reliability, enhancing public safety and improving aesthetics and property
values.
In many areas of the country, public policies are being developed which consider some
form of cost-sharing for undergrounding, as governmental agencies learn more about the
benefits which accrue to themselves and to utilities, developers, homeowners, businesses,
communities and other rate payers, as a result of undergrounding.
Converting overhead facilities fits with many utilities' goals of providing high-quality
electric service to its customers.
Evolving technology, such as horizontal directional drilling, and the ability to more safely
physically locate underground utilities which are already underground, are resulting in
higher-than-expected production, setting a precedent for projects to come.
Underground 2020
27149 Hwy. 33
Okahumpka, EL 34762
352-303-0901
www.under�,round2020.org
u � 2009 Underground 2020
Biblio r� aphv
InfraSource Undergrounding Assessment Phase 1 Final Report.
Emera. 2003. Emera Reports Third Quarter Earnings of $11.5 Million: $4.0 Earnings
Impact from Hurricane Juan.
Halifax Regional Municipality. 2004. District 13 Newsletter, Winter 2004.
Johnson, B.W. 2006. Out of Sight, Out of Mind? A Study on the Costs and Benefits of
Undergrounding Power Lines. Prepared for the Edison Electric Institute (EEI).
Kinectrics. 2005. Underground Utilities Feasibility Study for Halifax Regional
Municipality. Report #: 10986-001-RA-001-RO1.
Maney, C T. 2006. Benefits of Urban Underground Power Delivery. IEEE Technology
and Society Magazine, Spring 1996.
Navigant Consulting, "A Review of Electric Utility Undergrounding Policies and
Practices," March 2005.
"Overhead to Underground Conversion in Oklahoma," Transmission and Distribution
World, Penton Media, August 2004.
Putting Cables Underground Working Group. 1998. Putting Cables Underground. Report
of the Putting Cables Underground Working Group to the Minister for Communications,
Information Technology and the Arts. Australia.
Sinclair Knight Merz. 1998. Consultancy to Investigate Potential Benefits From Putting
Cables Underground. A study completed in support of the Putting Cables Underground
Working Group. Australia.
"The Real Cost of Overhead vs. Underground Transmission: It May Not Be What You
Think" panel: moderated by Michael Beehler, associate vice president of Burns and
McDonnell. Panelists Pacific Gas & Electric Senior Consulting Engineer Mohan Bhatia,
American Electric Power Director Of Transmission Line Projects Engineering Max
Chau, and Northeast Utilities System Transmission Project Director Anne Bartosewicz.
"Utility Undergrounding Programs," Scientech, May 2001.
Virginia 5tate Corporation Commission. 2005. Placement of Utility Distribution Lines
Underground. Report to the Governor and the General Assembly of Virginia.
MEMORANDUM
TO: Jennifer Levitt, Cottage Grove City Engineer
FROM: Colette Jurek, Community Relations Manager
Steve Koski, Electric Reliability Engineer
March 7, 2013
SUBJECT: Cottage Grove Public Works Commission
Follow-up Questions: 2/11/13 Commission Meeting
Jennifer,
Steve Koski and I wanted to address some of the outstanding concerns raised
during the last Public Works Commission meeting regarding undergrounding.
Electric Infrastructure
• With respect to our Minnesota service territory, approximately 60% of our
electric feeder lines are installed overhead and 40% are installed underground.
• The life span of both overhead and underground feeder cable is estimated to
be 40 years.
• With respect to Cottage Grove feeder lines, the following is an overhead vs.
underground reliability comparison for the four-year period 2008-2012:
Cottage Grove Feeders 9/1/2008 thru 8/31/2012
Overhead Feeders
Number of Trips 11.0 Average Number of Trips
(actual) Per Year 2.8
Total Trip Duration 13.2 Average Outage Duration
(in hours) Per Year (in hours) 3.3
Underground Feeders
Number of Trips Average Number of Trips
(actual) 3.0 Per Year 0.8
Total Trip Duration Average Outage Duration
(in hours) 2.6 Per Year (in hours) 0.7
• Gopher State One-Call (GSOC) provides locating services to requesting
parties free of charge. This includes both overhead and underground systems.
• Under Minnesota Public Utilities Commission (PUC) general rules and
regulations, Xcel Energy is obligated to design and construct its electric delivery
system in the most prudent, least-cost alternative to meet the needs of our
customers and which will maintain system reliability and perFormance. Parties
requesting special facility installation such as undergrounding are responsible for
those excess expenditures.
Public Incidents
Our insurance and claims department tracks public incidents involving both our
overhead and underground systems. In the 7-county metro region for 2012, we
experienced 440 poles hits which included street light poles and guy wires.
During that same timeframe, we experienced 63 padmount and pedestal
equipment hits. With respect to the liability question involving equipment
interFerence, each case is different and liability is determined on a case-by-case
basis.
Jennifer, if you have any additional questions or concerns regarding
undergrounding, please feel free to contact me directly. Thank you!
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Windy and icy weather can snap utility poles.
Underground lines don't have that pro6lem but
are vulnerable to other damage.
nience—whether on the factory floor
or irn the hig,�-tech offiee. In heauil}�
damaged areas, these outages can
sometimes last for days or even weeks.
The effect can range from hardship to
catastrophe, particularly in terms of
health and safety, not to mention eco-
nonuc loss.
It is not surprising, then, that in the
�ost m�rteaai 1Lfi��t f�lloeq,s a ma�j��e
storm-related power outage, there is
almost always a public clamoring for
burying overhead powerlines. After all,
wind can't Imock down lines if there's
nothing to knock down, and ice can't
collect on lines already covered by the
earth. It seems intuitive.
Sut ifyou examin� str�die� af under-
grounding and historical performance
data for both undeiground and over-
head lines, the benefits and costs of
placing more existing overhead electric
distribution infrastructure under-
ground defy that logic.
Ii7 fact, b�ur��ng os ea�eadl �oLarerlin�s
has a huge price tag, about 10 times the
cost of installing overhead lines. It is
true that, compared to overhead power
systems, underground lines generally
have fewer power outages, but the du-
ration of those outages tends to be
much longer, Moreover, underground
systems are not immune to outages
during storins. (See the sidebar, "No
Hiding from Water,")
Still, there are other benefits for
burying existing overhead powerlines,
the most significant of which is im-
proved aesthetics. Many communities
and individuals want their powerlines
removed from sight. The benefits de-
rived from such initiatives are difficult
to quantify, but they are real and can
be substantial. Because these projects
cannot Ue justified Uased on standard
economic criteria, community and
government leaders often struggle to
determine who should pay and who
Brad Johnsm7 rs an incleperzdent energy
constdtant (btujohnso�i�ac�ainc.raet). This
article is based on his stucly forEdiso�t E1ec-
tric Institute.
should benefit from undergrounding
initiatives based on aesthetics.
Undergrounding, like so many is-
sues, depends on the balance between
the high cost and the actual benefits.
And the bottom line is that reliability
Uenefits associated with burying e�cist-
ing overhead systems are uncertain
and in most instances do not justify the
high price tag.
Measuring Electric Heliability
Actually, utilities are already placing a
significant amount of line under-
ground. Over the past 10 years, ap-
proximately half (49 percent) of the
capital expenditures by U.S. share-
holder-owned utilities for new trans-
mission and distribution lines have
Ueen for underground wires. A1mosC 80
percent of the nation's electric grid,
however, has been built with overhead
lines. Would electric reliability be im-
proved if more of these existing lines
were placed underground as well?
There are two primary measures of
electric reliabiliry:
■ the fi•eqttency with which a customer
sustains a power outage (that is, the
number of power outages per year,
measured by the system average inter-
ruption frequency index, or SAIFI); and
■ the durcctio�z of outages (that is, the
number of minutes per year a cus-
tomer is without power, measured by
the system average interruption dura-
tion index, or SnIDI).
For most utilities, it is extremely
difficult to track the number of outages
that occur on their systems and deter-
62 ELECTRIC PERSPECTIVES
i ' f �
� �'�� � — � . . � �
¢I_ '"....__ � �' _ ��-'_ ___ __.__ "__ � Y -_ . I
1 1 '1'.
Underground power systems are nol immune from storm-relaled outages. Baltimore Gas &
Electric recorded a large number o( failures relafed to its underground equipment during Hurri-
cane Isabel in 5eptember 2003.
Item that iailed Number oi tailures
1,000 kVA nefwork transformers
Nefwork protecfors
Swifchgearfuses
4 kV D&W iuses
Pad-mounted s�Nitchgear
Pad-mounted transformers
Primary duclline
Secondary ductline
Seclions of cable renewed
Underground cable faulls
Source: Ballimore Gas & Elechic
5 ,,���._,- I ��. �
26 „� �
17 p r ---
- � N �Y,'� _ �V
5 �
12 �
— :a
8 =r-^
10 –.
14
100+
�–_ _ _ _
r
� t �.`�.", -__ _ ": ;?' : _ , , u -
OVERHEAD VS. UNDERGROUND IN NORTH CAROLINA
1998-2002
Reliability category Overhead Underground
System interruption rate per mile
Tap line interruption rate per mile
0.6 0.3
0.4 0.2
Average outage duration (minutes) 92.0 145.0
Service conduclor inlerruptions per 1,000 customers 9.7 9.6
Source: Norlh Carolina Ulilities Commission
mine the number of customers af-
fected. Utility switching actions, for ex-
ample, can result in momentary
outages that last only a fraction of a
second—it is hard to say whether or
not they have an effect. Moreover, for
storm-related outages, die utility often
relies on customers to provide notifi-
cation that they are without power. If
the customer does not report the out-
age, the utility may be unaware of it.
Comparing the reliability of over-
head powerlines to underground ones
is even more difficult. Most utility out-
age-reporting systems do not try to
separate the two. The problem is fliat
underground circuits generally have
one component above the ground.
Monitoring equipment is available to
distinguish among outages on the
overhead and underground compo-
nents of the same circuit, but it is ex-
pensive.
In spite of these diffict�lties, utilities
worldwide collect SAIFt and SaIDi data.
Increasingly, regulatory commissions
use this data to measure utility perfor-
mance against reliability standards
and then reward or penalize utilities
accordingly.
And several studies of underground-
ing are available.
The North Carolina Utilities Com-
mission studied five years of under-
ground and overhead reliability
comparisons for the state's share-
holder-owned electric utilities—Duke
Energy, Progress Energy Carolinas, and
Dominion North Carolina Power. (See
Table 1.) The data indicate that dle fre-
quency of outages on underground
systems was 50 percent less than for
overhead systems, but the average du-
ration of an underground outage was
58 percent longer than for an overhead
outage. In other words, for North Caro-
lina utilities, an underground system
suffers only about half the number of
outages of an overhead system, but
those outages t3ke almost l.b tlmes
longer to repair.
According to the commission's re-
port, overhead lines experience shorter
outage duration because it is relatively
easy to locate a fault on an overhead
line and repair it. A single line worker,
for example, can locate and repair a
fuse. Underground lines, on the other
hand, require specialized equipment
and crews to locate a fault, a separate
crew with heavy equipment to dig up a
line, and a specialized crew to repair it.
This greatly increases the time (not to
mention cost) to repair an under-
ground fault. In urban areas, buried
lines are four times more costly to
maintain than overhead facllities.
In the discussion of the report, Duke
Power pointed out that overhead lines
tend to have more power outages pri-
marily due to trees coming in contact
with them. Also, water and moisture
infiltration can cause significant fail-
ures in underground systems when
they are flooded, as often happens in
hurricanes. Not only that, due to cost
or technical considerations, it is un-
likely that 100 percent of the circuit
from the substation to the customer
can be placed entirely underground.
This leaves the circuit vulnerable to the
same types of events that affect over-
head lines—high winds and ice storms.
In a 2000 report issued by the Mary-
land Public Service Commission, the
state's utilities were asl<ed to select
"comparable" overhead and under-
ground feeders and provide reliability
data for three years (1996-98). The
data, which did not include storm-re-
lated outages, varied widely. (See Table
2.) For two of the four utilities, the fre-
quency of underground outages was
higher; and duration was generally
comparable. The commission con-
cluded in its final report that the im-
MAY / JUNE 2004 63
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r ;� �� * , '� i , � , � � d �� ��� p
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— �� ' � -'_ - �
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i '`� ��� �- � � �� .-�—,,s�y�--
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OVERHEAD VS.
UNDERGROUNDIN
MARYLAND
(averagefor1996-98)
Overhead Underground
Utility, index lines lines
Allegheny Power
SAIFI 0.6 0.8
SAIDI 51.6 236.8
Baltimore Gas & Eleclrio
SAIFI 2.6 12
SAIDI 152.7 130.0
Conecliv
SAIFI 0.8 1.0
SAIDI 65.6 53.3
PEPCO
SAIFI 2.1 0.7
SAIDI 3.2 2.1
SAIFI: syslem average inferruplion
frequency index
SAIDI: syslem average in�erruption
tluration index
Source: Pu61ic Service Commission ol Maryland
pact of undergrounding on reliability
was "unciear."
One of the issues highlighted by the
commission was the fact that as under-
ground cables approach their end of
life, failure rates increase significandy,
and these failures are extremely
difFicult to locate and repair. Maryland
utilities report that their underground
cables are becoming unreliable after 15
to 20 years and reaching their end of
life after 25 to 35 years. Moreover,
PEPCO found that customers served by
40-year-old overhead lines had better
reliability than customers served by
20-year-old underground ones. In fact,
two Maryland utilities, Choptank (a ru-
ral electric cooperative) and Conectiv,
have replaced underground distribu-
tion systems with overhead ones to im-
prove reliability.
The most comprehensive under-
grounding report prepared to date is
probably the 1998 "Putting Cables Un-
derground Working Group Report,"
from Australia, prepared at a cost of
more than $1 million. The report ex-
amined the costs and benefits of un-
dergrounding all existing powerlines
throughout the country.
Crews can restore overheatl lines to seruice
faster than underground lines, which require
special repair crews antl equipment.
That study, as others consistently
do, shows that underground systems
suffer outages suUstantially less fre-
quently than overhead ones. The Aus-
tralians found that the frequency of
power outages in underground sys-
tems (in Australia, France, and Fin-
land) is, on average, less than one-third
that of overhead systems.
The study showed conflicting results
for the duration of a power outage.
Over a 10-year period in the United
Kingdom, for example (as cited in the
Australian report), the duration of out-
ages for underground lines was a little
more than half of what it was for over-
head; however, in 1996 and 1997, un-
derground circuits were actually less
reliable than overhead ones, losing 12
percent more customer minutes.
Looking Good
One of the most commonly cited
benefits of undergrounding is the re-
moval from the landscape of poles and
wires. Local communities and neigh-
64 ELECTRIC PERSPECTIVES
borhoods routinely spend millions to
place their existing overhead power
lines underground. Given the option,
builders of new residential communi-
ties will often pay a premium of sev-
eral thousand dollars per home to
place the utilities underground. These
"aesthetic" benefits are difficult to
quantify but are often the primary
��.��....,�.�..�...... �........b...�.��....b t ....
jects.
In addition to the value of improved
aesthetics (uaquantifiable, except as
they pertain to property values), the
Australian study brought several other
potential benefits to light:
■ reduced motor-vehicle accidents
caused by collisions with poles;
■ reduced losses caused by electricity
outages;
■ reduced network maintenance costs;
■ reduced tree-pruning costs;
■ increased propertyvalues;
■ reduced transmission losses due to
the use of larger conductors;
■ reduced greenhouse-gas emissions
due to lower transmission losses;
■ reduced electrocutions;
■ reduced brushfire risks; and
■ indirect effects on the economy, such
as increased employment.
Only four items—regarding motor-
vehicle accidents, maintenance costs,
tree-trimming costs, and line losses—
were deemed significant in the study's
benefit/cost calculus. (See Table 3.) It
identifies the reduction in losses from
motor vehicle accidents as the largest
benefit from undergrounding—some-
thing utilities have no control over.
The total for benefits came to $1.9
billion over 20 years. The Australian
study developed a model to estimate
costs for undergrounding e�sting
overhead powerlines and came up
with a whopping $16.3 billion, more
than eight times the amount of benefit.
(See Table 4.) The total cost per urUan
or suburban customer would be
$3,856. Another way of looking at it:
$360,207 per mile.
In contrast to the Australian study,
U.S. studies have been regional in na-
ture and have focused on the costs
rather than the benefits of under-
grounding.
� . ,, ._ � � _ : . =-_�–
UNDERGROUNDING
IN AUSTRALIA:
20-YEAR BENEFIT
PROJECTION
(U.S. dollars)
Tree-trimming $0.5 billion
Reoairs and mainlenance �0.1 billion
Motor vehicle accidents $1.1 billion
Line losses >$0.1 billion
Other $0.2 billion
Tolal benefiis $1.9 6illion
Source: "The Puiting Cables Underground
Working Group ReporY'
UNDERGROUNDING IN
AUSTRALIA: COST
PROJECTION
(U.S. dollars)
Excavalion $4.5 billion
Instailation and malerial $3.8 billion
Service connection $2.3 billion
Reinstatement of service $1.9 billion
Transformers $2.0 billion
Street lighfs $1.1 billion
Dismanfling and disposal $0.7 billion
I�i�l ca�;s !�wy�.3 s.�illio�i
Source: "The Pulling Cables Underground
Working Group ReporP'
The North Carolina Utilities Com-
mission estimated it would take its
three shareholder-owned utilities 25
years to underground all their e�sting
overhead distribution systems—at a
cost of approximately $41 billion. This
six-fold increase in the existing book
value of the utilities' current distribu-
tion assets would require a 125-per-
cent rate increase. In other words,
North Carolina consumers would have
to pay more than twice as much for
electricityto enjoythe "benefits" of un-
derground lines.
Other data for U.S. utilities indicate
similar costs for placing overhead
powerlines underground. (See Table
5.) Often the cost is five to ten times
that of new overhead lines. At $1 mil-
lion per mile, a new underground sys-
tem would require an investment of
more than 10 times what the typical
U.S. shareholder-owned utility cur-
..,.. :, :...,, :...........: :.. �:....::, u.:.,..
plant.
Other factors also can result in sub-
staniial addiiionai customer costs for
undergrounding projects. For instance,
electric undergrounding strands other
utilities—cable and telephone assets,
for example. They would have to as-
sume the fiill cost of poles, and those
costs likely shift to the customers.
Also, customers may incur substan-
tial additional costs to connect homes
to newly installed underground ser-
vice, possibly as much as $2,000 if the
household electric service must be up-
graded to conform to current electric
codes.
Both the Australian and U.S. studies
identify significant issues related to
who assumes the burden for under-
ground costs. If utilities were told they
must underground a significant por-
tion of their overhead lines, who would
pay for it and who would get their lines
placed underground first? If the costs
are fully allocated, only the wealthy
may be able to afford it. On the other
hand, if undergrounding is financed or
socialized through a broad-6ase tax or
electricity rates, people may end up
paying for undergrounding projects
that do not get to their neighborhoods
for a decade or more (or after theyhave
already moved) .
New and Old
Placing e�sring overhead lines under-
ground is difficult to justify economi-
cally. In spite of that, undergrounding
is popular across the United States,
and aesthetic reasons seem to trump
costs. In nine out of ten new subdivi-
sions, contractors bury power lines. In
addition, dozens of cities have devel-
oped comprehensive plans to bury or
relocate utility lines to improve aes-
thetics.
66 ELECTRIC PERSPECTIVES
��4�1' � ��■ _ T -• ;;�, ��
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r � � �� � �; �
I ��; i
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I �il
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� ,��— � -- — � � �`� �;.�
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';; � -
� � I _ �-
SOME UTILITY UNDERGROUND COSTS
��
vf -U
Utility/state estimates Average cost per mile
Allegheny Power $764,655
Ballimore Gas & Eleclric $952,066
California $500,000
Conectiv $728,190
Florida Power & Lighl $840,000
6eorgia Power $950,400
PEPCO $1,826,415
Puget Sound Energy $1,100,000
Virginia Power $950,000
�
Sources: Maryland Selective llndergmunding Warking Group, Dare County (nc) Ilnderground SWdy, Scienlech,
Pugel Sound Energy.
�"�
_ �:_ .
� ���--
F�I� �`yr��ri
�ij��� � �
� �.�� �� � -
, � , �
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In parts of Hawaii, 44 percent ot lines are
already 6uried through a cost-sharing pro-
gram. Heco is stutlying ways to underground
even more.
For new residentiaP construction,
utilities vary on how they charge for
the cost of providing underground ser-
vices. For Green Mountain Power and
uulities in California, the customer or
developer pays for trenching and
backfilling, whiLe the uti.tity pays the
ts�t_ �us��mers i� A�lantic Ciih, E�ec-
tric's territory pay a fixed cost, and the
utility pays the rest; Nantucket Electric
pays up to a certain amount, and the
customer pays the rest. ConEd simply
charges the difference between the un-
dergrounding costs and the estimated
cost to install overhead lines to the
same destination.
When it comes to converring exist-
ing overhead lines to underground,
there are a variety of programs. Several
communities, for example, have estab-
lished special assessment areas, where
subscribers pay e�ra on their monthly
bill to fund an underground project.
These areas are typically created by a
petition of the majority of the property
owners in that area.
Commonwealth Electric in Massa-
chusetts has used special assessments
since 1970 to fund burial efforts in his-
toric communities such as Nantucket
Island. One drawback to special as-
sessments is that the total revenue col-
lected is often minimal, requiring
utilities to extend the schedule for un-
dergrounding.
68 ELECTRIC PERSPECTIVES
�
Another approach is the establish-
ment of underground districts. In Cali-
fornia, the public utility commission
collects a percentage of revenue from
wire-based utilities for a special under-
grounding fund. In order to receive
these funds, a community must form
an undergrounding district, approved
by at least 70 percent of the areas prop-
erty owners. They also must agree to
pay the $500 to $2,000 it costs to con-
nect each home to a new underground
system.
There are various other government
initiatives. Under a worl</cost-sharing
plan for e�risting overhead lines, Ha-
-�
� ,'
A Cuf Above ����
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�...�
��
waiian Electric Company will cover
costs to design, buy materials, and
perform electrical work on its own
facilities, including under-grounding
lines. The requesting community or
government agency must obtain ap-
provals and design and construct the
duct line infrastructure.
Under SCE&G's program, if the local
South Carolina municipaliry agrees to
contribute a matching amount, the
utility contributes 0.5 percent of the
gross receipts it is obligated to pay to
the municipality. This money goes into
a special underground fund.
In 1999 the North Carolina legisla-
ture passed a law that allows Dare
County on the Outer Banks to form a
special utIlity district for funding over-
head conversion. The counry's electric
supplier, Dominion Virginia Power,
would collect a maximum of $1 a
month from residential customers in
the county and a ma�mum of $5 a
month from all other customers. The
money would be placed in a special
fund, managed by the utility, to be
used on a pay-as-you-go basis to con-
vert the county's e�sting overhead
lines.
As of last year, Dare Counry had not
elected to form the special utIlity dis-
trict. One of the reasons is that two
cominunities in the county, Duck and
Southern Shores, already have under-
ground electric systems they paid for
through development fees or special
property-tax assessments. Residents in
these communities believe it is unfair
for them to pay undergrounding costs
for other county residents.
_ -_-_ �
N ;`::. � �
70 ELECTRIC PERSPECTIVES
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Out of Sight, Not Out of Mind
While communities and individuals
continue to push for underground-
ing—partictilarly after extended power
outages caused by major storms—the
reliability benefits that would result are
uncertain, and the costs leave little
economic justification.
Indeed, in its study, the Maryland
PuUlic Service Commission concluded,
"If a 10-percent return is imputed to
the great amounts of capital freed up
by building overhead instead of under-
ground line, the earnings alone will
pay for substantial ongoing overhead
maintenance," implying that utilities
could have more resources available to
improve reliabllity on overhead lines if
In new as well as old communities—such as
Nantucket, MA—the aesthetic beneiits of un-
dergsAUnding ,pa�verlines aulweigh the casts_
� they invested less in new underground
facilities.
I That doesn't imply that under-
grounding shouldn't happen—but its
viability hangs on aesdletics, not reli-
ability or economic benefits. Many
c�nsumers iflna�, uti�r�t t'�eir �oti�*ea�es
out of sight, regardless of cost. The
challenge is to determine who will pay
a for these proj ects and who will benefit.
There are several undergrounding
programs azound the country that are
working through these equity issues
and coming up with what appear to be
viable compromises. Once a public-
policy decision is reached to pursue an
undergrounding project, it is worth-
while to evaluate these programs in
more detail to determine what is work-
ing, and what is not. ♦
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MAY / JUNE 2004 77