Survey Questions - Edison Electric Institute

Chapter 6: Undergrounding Costs
Out of Sight, Out of Mind 2012
The economics of undergrounding utility infrastructure has always been the overarching challenge for the
utility and its customers who wanted lines put underground. If the cost of undergrounding were nearly the
same as overhead construction, the decision would be easy, but that is not the case.
The 2012 EEI survey also collected data on the estimated cost per mile for new overhead construction, new
underground construction, and the cost to convert from overhead to underground. The survey collected data
on the percentage breakdown of these costs between material and labor to determine if underground
construction is a more labor intensive and costly process.
Collecting data and comparing costs from across the country presents many challenges. First, it should be
noted that all of these costs are high-level estimates based on averages or a utility’s typical construction
approach. There are many different variables to contend with, including customer density (urban, suburban,
and rural), soil conditions (sandy to rocky), labor costs, construction techniques, vegetation, and voltage
levels. This report has attempted to handle these variables in two ways, as follows:
First, data has been collected based on customer density, defined as:
Urban─150+ customers per square mile
Suburban─51 to 149 customers per square mile
Rural─50 or fewer customers per square mile
Second, the report seeks to identify the range of costs for each category discussed, identifying
the highest and lowest estimated costs in each category.
In addition to the challenges noted above for the data collected for this edition of the report, there is also
some difficulty comparing data between the previous editions of the Out of Sight, Out of Mind reports.
Several companies participating in each report have been different, leading to variances between high and
low values within each of the data sets and the ratios between overhead and underground values in the
comparisons. In this edition, very few utilities from high cost areas of the country provided data for this
report. This could give the false impression that the cost of underground construction and the cost of
conversions from overhead to underground are much less than it actually is compared to other areas of the
country.
Because each construction project is unique due to load, number of customers served, and various
construction parameters, there is no precise cost per mile to build utility facilities of any type for any utility.
The cost data in this report is not meant to be the absolute range in which utility construction costs must fall;
rather, it is intended to provide a range of cost data that utilities have estimated on various projects. Also,
because of the complexity of calculations involved with these costs, they are not typically updated
frequently.
Since the previous edition of this report, the cost of building electrical facilities has increased in all locations
and construction categories.
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