The Case for Underground Transmission
June 5, 2011 - Bill Opalka - energybiz.com
The Knoxville Utilities Board has been hit hard by the storms ravaging the southeast. While the local distributor says that it usually spends about $2 million a year on similar events, this recent one will cost it at least $1.2 million fixing transmission-related items. Would underground lines help?
For sure, during periods of extreme weather conditions, that technique has proven to be more reliable. But going underground is an expensive proposition: The direct costs are much more than those associated with traditional overhead power lines. Meantime, it is far more time consuming to fix trouble spots. The trend, though, is toward placing electrical lines underground in developing communities.
“Virtually everything that’s going in today is going underground, and has been for the last 15 years,” Bill Elmore, senior vice president for the Knoxville utility, in an interview with the Knoxville News Sentinel.
In the case of that utility, about 900 miles of its total 5,200 miles are now underground. Eventually, however, those hidden assets need to connect up with those above ground. And the current storms damaged 115 poles and 100 transformers, while 6 miles of electrical lines had to be restrung, the paper reports.
The Edison Electric Institute funded a study on underground transmission lines in 2004. The report concluded that such technologies cost about 10 times that of overhead power lines. And while underground lines suffer a third of the outages as overhead ones, they take twice as long to repair. Specifically, under-grounding is about $1 million a mile.
Who pays? The utility sector, by-and-large, says it is willing to ante up at least the amount of what it would cost to go above ground. In fact, it says that about half of the money it has spent constructing transmission lines in the last decade has gone toward under-grounding.
The highest expenses are tied to excavation, installation and service connections. If, however, there is new residential or commercial construction, the effort could accommodate other utilities such as phone and cable companies. The costs could then be shared. The expenses are oftentimes split among customers, developers and utilities. In the end, though, it is consumers who ultimately pay through higher taxes or higher rates.
The Knoxville Utilities Board told the local paper there that it gets up to five requests a year to bury the lines that are now above ground. But when the residential areas find out how much it will cost, they almost always balk. Instead, the distributor recommends a good tree-trimming program.
Lines above the ground come into contact with trees, high winds, rain and ice storms. But such wires are much easier to repair because they can be visually inspected whereas underground lines require special equipment and crews to locate a fault and to fix. That takes more time and money. At the same time, water can seep underground, and particularly after heavy flooding, that can cause systems to break down.
Despite the high costs, utilities in Florida that have endured their fair share of hurricanes are going increasingly underground. NextEra Energy, for example, says that it will pay a quarter of the cost to convert overhead lines to underground systems while also supporting municipalities’ efforts to win state and federal funding for future endeavors.
Consider the South Cape Community Redevelopment Agency, which decided that it wanted underground lines for aesthetic reasons: It will pay the difference between what the overhead lines would have cost and what the underground ones will be costing. Karen Ryan, spokeswoman for the not-for-profit electric distribution cooperative LCEC serving southwest Florida, told the local paper that it would have cost $600,000 to install overhead lines while underground ones will cost $4.5 million.
Meanwhile, Dominion Power is planning to install two separate underground transmission lines, both of which are in its home territory of Virginia. One is a 2.6 mile link connecting two substations and the other is a 1.1 mile patch that will run along a public roadway to a substation. In North Carolina, where the utility also has operations, the legislature there authorized the collection of small monthly fees to pay for such endeavors, although the law has never been carried out.
Customers prefer the aesthetics while utilities want to avoid widespread damage from storms. Still, it’s difficult to make an economic case for building underground transmission. But communities are interested in hearing about it and especially in those newly developed ones where the costs can be shared.
EnergyBiz Insider has been named Honorable Mention for Best Online Column by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists.
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