Utility Cooperative Forum: Do the Benefits of Underground Power Lines Outweigh the Costs?

Published July 8, 2021 By Peggy Maranan, CPA, MBA, Ph.D.

Originally published in The Cooperative Accountant, Summer 2021 Issue

America’s reliance on electricity has continued to grow.  Disruptions in electric service from weather events or natural disasters have tended to repeatedly prompt the seemingly logical next question “does it make sense to underground (UG) power lines to help minimize outages?”  Additionally, there has been a continuing trend for the removal of poles and overhead (OH) power lines to improve the aesthetics of a neighborhood or area.  While undergrounding power lines may seem on the surface to be a good way to go, the reality is that making the decision to put power lines underground is more complicated, and considerably more expensive.  Over the years, electric cooperatives and their regulating agencies or bodies have studied the undergrounding of power lines.  The large majority of these studies conclude that the cost of undergrounding is far more expensive than OH power systems.  New construction of UG facilities or conversion of existing OH power system facilities are both high cost alternatives for undergrounding.  These costs can also vary from location to location, but are considerably higher for UG than OH in all instances.  Besides the cost and aesthetics, factors regarding reliability need to be considered.  Overall, the question becomes “would the benefits achieved outweigh the costs incurred?”

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