Extreme Events Cause More Utilities to Use Underground Infrastructure

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Over the last two years, extreme weather--starting with Winter Storm Yuri in February 2021, continuing through western heatwaves and wildfires, an active 2022 tornado season, Hurricane Ian in September 2022 and the atmospheric rivers that pummeled California in December 2022 and January 2023--has destroyed billions of dollars of electric utility infrastructure.

As they consider options to rebuild damaged or destroyed infrastructure, a growing number of utilities have decided to stormproof sections of their distribution system by undergrounding distribution lines and transformers.

Undergrounding distribution assets is not the only way to "harden" electric infrastructure. Several Florida utilities have been replacing wooden utility poles with steel or cement versions that are tested to withstand Category 4 or Category 5 hurricane winds. More active tree trimming to increase clearance between electric lines and trees is another way to stormproof a utility distribution network. A number of utilities across the country have protected, raised or relocated substations after severe flooding.

But undergrounding, traditionally downplayed by utility executives as a too-expensive solution to reliability problems or extreme weather, is getting a second look. Traditional utility planning has dismissed undergrounding as costing as much as 10 times the cost of overhead lines. But others are finding the cost multiple far less than that, perhaps as low as three times the traditional overhead cost. A lot depends on local conditions, including the views of utility regulators.

Cost-benefit calculations can shift dramatically when deaths and property damage from extended electric outages caused by hurricanes, wildfires, tornadoes and ice storms are tallied.

Last year, wildfire-scarred California enacted a law, Senate Bill 884, that would require electric utilities serving more than 250,000 customers to underground all future electric distribution facilities that are proposed to be erected in proximity to designated state scenic highways. The new law also requires undergrounding for any utility attempting to build or rebuild infrastructure in high fire-threat areas.

Some utilities have been undergrounding for years. Hurricane-prone Florida utilities, in particular, have grown weary of rebuilding above-ground infrastructure in one year only to have it destroyed by hurricanes in another year. Florida Power & Light (FPL), a subsidiary of NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida), is one Florida utility stepping up its undergrounding program. It's not the only utility doing that in the Sunshine State, but because of its size, it is spending the most.

A representative from FPL told the state Senate Select Committee on Resiliency last month that underground lines installed so far have held up well to flooding and that restoration after last year's Hurricane Ian was quicker as a result.

According to a report in The Capitolist, a Florida news organization, Andy Pankratz, FPL's senior director of emergency preparedness, last month told Florida state senators, "Our underground equipment does perform well. It is much quicker to restore that equipment than it is to replace or restore damaged overhead equipment."

As the utility began undergrounding lines in a Southwest Florida neighborhood last month, Troy Todd, a FPL senior project manager, told another Florida media outlet, WINK-TV, "We know that underground power lines perform about 85% better than overhead power lines during Hurricane Irma. And they perform about 50% better in day-to-day conditions."

On the other side of the country, Pacific Gas and Electric Company (PG&E) (San Francisco, California), a unit of PG&E Corporation (NYSE:PCG), plans to spend up to $13.5 billion over the 2022-2027 period to underground about 3,600 miles of distribution lines in heavily wooded areas. Years of wildfires triggered by failing infrastructure, including power lines snapped by falling trees, leading to hundreds of deaths and billions in property damage and litigation, convinced the utility giant to bite the bullet and dramatically boost its undergrounding investment. For more on that, see March 18, 2022, article - California's PG&E Details Spending to Bury Electric Lines to Mitigate Wildfires.

Georgia Power (Atlanta, Georgia) also is undergrounding part of its electric distribution network in several leafy Atlanta neighborhoods to improve power reliability and reduce outages.

"Placing power lines underground makes the grid more resilient because they're less vulnerable to storms and wind, but it's not fault-proof," Georgia Power spokesperson Marie Bertot told the Buckhead.com neighborhood news service last month. "In areas prone to flooding, digging, root vegetation and other underground activity, it's not always an option."

Austin Energy (Austin, Texas), the municipal electric utility serving the Texas capital, is the latest venue where the "overhead vs. underground" debate is playing out. The city was particularly hard hit by a deep freeze and ice storm last month that snaped poles and wires, turning out the lights on as many as 171,000 customers. Across the state, as many as 400,000 people lost power.

Jackie Sargent, general manager of Austin Energy, this month told a news conference that undergrounding all the city's above-ground power lines would cost billions of dollars. "It's very expensive to retrofit a system and go back and bury power line," she said according to news reports. "Very expensive. Billions of dollars."

"Burying power lines is a question that utilities often hear after storms," Austin Energy spokesperson Matthew Mitchell told Austin TV station KXAN. "Austin Energy has looked into the issue and determined that at this time, it would be too expensive to begin this process and that's not a cost we'd want our customers to burden. Burying lines would involve billions of dollars and take decades to complete."

Across the country, newer communities already require utility lines to be buried. Every utility will have to make its own calculation about the costs and benefits of undergrounding portions of their existing electric systems. And overseeing those calculations will be public utility commissioners, who must balance reliability costs and initiatives. No one expects all U.S. electric utilities to jump into the "underground everything" mode, but local sentiment can move the needle.

There are broader system costs and consequences to extended power outages stemming from severe weather. This month, CNN reported that roads were gridlocked in Austin around an H-E-B grocery store after rumors surfaced that the store was giving away free food. The store was discarding food that had spoiled after a days-long power outage. Over 250 people flocked to the store in search of free food.

Mark Toney, executive director of consumer advocacy group The Utility Reform Network (TURN) (San Francisco, California), told The Los Angeles Times, "We expect, unfortunately, more weather extremes, more climate volatility--not just hotter in the summer, but more extreme weather in our winters. Utilities [should be] viewing themselves as part of an ecosystem, if you will, of disaster preparedness."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).