Bacon's Rebellion

Democracy Thrives in Sunlight

The Tradeoffs of Burying Electric Power Lines

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by

James A. Bacon
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How much is it worth to ensure faster restoration of electric service after a major storm? A lot, if it’s you. Perhaps not so much, if it’s someone else!

by James A. Bacon

Anyone who regards the State Corporation Commission as a wholly owned subsidiary of Dominion Virginia Power really isn’t paying attention. SCC commissioners have their own priorities, and they aren’t necessarily those of Dominion. An example was on display yesterday when the commission held hearings on a Dominion request to spend $140 million to bury its most vulnerable power lines so it could get customers back on line quicker after widespread outages.

The SCC had rejected an earlier Dominion proposal to spend $263 million on a plan to bury the 20% of overhead lines most responsible for outages and time lost. Dominion had argued that burying those lines would cut average electricity restoration times after major storms in half. After the SCC rebuffed that proposal, the utility came back with a scaled-back proposal to spend $140 million, adding a modest $6 per year to customers bills.

Based on their comments and questions, the commissioners did not look favorably upon it. Writes John Ramsey with the Richmond Times-Dispatch:

Commissioner Mark C. Christie said during the hearing that the utility’s calculation of the societal benefit to justify the plan is the wrong measurement since less expensive options to reduce outages — such as increased tree trimming — would have similar impact.

“The whole question about this thing is bang for the buck,” Christie said. “Certainly, you will get fewer outages when the storm comes through. But how do you know all the extra money you spent on undergrounding was more cost-effective than having more trucks out there or tree-trimming or whatever less expensive options?

“We know if you underground a line down a block, we know it’s going to benefit that block in all likelihood. Does that mean it was worth the expenditure that goes into peoples’ bills?

Dominion maintains a portfolio of a dozen different reliability programs, encompassing tree trimming, upgrading old equipment to current standards, and installing sensors to detect failing parts and prioritize investment, among others. (See “Towards a Smarter Grid.”) The company is continually fine-tuning its allocation of resources. For example, it has moved from trimming routes every three years to an approach that takes into account line voltage, how fast the trees grow and many other factors. The inability to trim trees outside of electric-line right of way, said Dominion lawyers at the hearing, places a major restriction on how aggressively the company can trim.

Bacon’s bottom line: Two points…

First: Electric reliability is part of the company’s DNA. One of the metrics Dominion uses to gauge its own performance is the speed at which it restores electricity service. Undoubtedly the SCC commissioners take reliability into account, but they appear to be more concerned at the moment with the impact of spending on rate payers. And who can blame them? Dominion, like other utilities across the country, has spent billions of dollars meeting tougher federal standards for toxic emissions, and it expects to spend billions more meeting the Clean Power Plan standards for carbon emissions. With all the concern over terrorism, cyber-attacks, electro-magnetic pulses and other threats to grid security, the company also is spending hundreds of millions on measures to harden the grid. Ultimately, citizens and businesses pay for all this. In the instance of restoring service after storms, the SCC seems to be prioritizing cost over reliability.

Second: Dominion has sought, or is seeking, SCC approval for a half dozen major electric transmission line projects that have aroused the ire of citizens concerned about the visual impact. Invariably, transmission-line foes suggest burying the line. That option has been prominently suggested for the controversial Surry-Skiffes Creek line which would impact views of the James River near the historic Jamestown settlement. I am speculating here, but I’m wondering if the SCC is skeptical about the cost of burying electric lines in any context, not just for ensuring reliability.

In terms of pure self interest, Dominion has no reason to object to burying distribution and transmission lines — as long as the SCC allows it to recover its costs. If Dominion balks at burying lines, it’s because the executives who deal with the SCC daily and know the minds of regulators anticipate a tough sell before the commission. It may be hard for people to wrap their mind’s around this, but the SCC is boss and Dominion is the supplicant.

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12 responses to “The Tradeoffs of Burying Electric Power Lines”

  1. Rowinguy Avatar
    Rowinguy

    Good article about an interesting issue, Jim. A couple of thoughts here. Many distribution lines throughout the DVP system are, of course, already buried. The line to my house and those throughout my subdivision were buried 20 years ago when the development first was built. I presume that cost was factored into the cost of my property. Now, however, DVP wants me and all my neighbors to pay $72 each year so someone else’s lines can be buried. I think this is what troubles Commissioner Christie. Has the utility shown a benefit to all of us that have literal “sunk costs” in now-buried distribution lines?

    Second, burying distribution is far less difficult and comparatively far less costly that buying high-voltage transmission lines. That’s the main objection DVP raises in each case to burying those things. Paradoxically, buried transmission lines are LESS reliable than overhead, in that a fault on an overhead line is far easier to locate a repair than in a buried line.

    Lastly, in the prior case, the Attorney General’s Office of Consumer Counsel vigorously opposed the DVP proposal, but they “settled” this case with DVP. Neither your article, nor the Times-Dispatch article, makes mention of that change of position. That might be an interesting story in itself.

    1. John B Avatar
      John B

      That was $6/year, not per month, or only $.016/day.

      My neighborhood has underground and there has been only one cable fault in the almost 40years of my residence. That was old cable technology and the one fault was located and rectified in half a day.

      I made my living on all that overhead stuff for many years but there surely also was nothing pretty about it. Also from an appearance standpoint, a few strategically placed padmounted transformers nicely landscaped beats having to see all those poles, lightning arresters, fuse cutouts, wire, pins, crossarms, guy wires, wire, potheads, cable troughs etc. hands down. And … there is no need for tree disfigurement and expense.

      What is also interesting, is that the overhead line leading to the fuse cutout and pothead a block from my house receives periodic faults from animals, trees, windage, ice, etc. These impact my reliability. If that overhead line were buried, I’d almost never have an interruption.

      Let’s do the six bucks. Even though it’d bury someone else’s line, it would benefit me.

      1. Rowinguy Avatar
        Rowinguy

        Thanks for correcting that, John

  2. LarrytheG Avatar
    LarrytheG

    same here. Our lines were buried at the time the subdivision was built and I was told it cost extra to do that and it was added on to the cost of the lots.

    Even then – a few years back – we actually had an elevated high voltage line put through the subdivision on it’s way to a substation that was being upgraded to serve new growth.

    We had some initial opposition from a couple of landowners but it died pretty quick when they ended up the only 2 and ironically neither was adjacent to the line itself.

    Since that time -we have had a hurricane and an ice storm – both of which took down other lines and took us offline – our underground lines did not save us.

    I have to say – in this day and time – we cannot put in a new road, high speed rail, new powerlines, hiking trails, even cell towers or even new subdivisions – without a flock of people showing up at the BOS hearings to voice their strong opposition – and these days mixed in with anti-govt rhetoric…

    It’s truly ironic when we cannot even assure cell phone service or reliable electricity now days because of those who oppose the towers… – that people can “see” and thus they say it will devalue their property because the scenic stuff is “marred”.

    Forget the “enviros”… the NIMBYs win hands down.

  3. TooManyTaxes Avatar
    TooManyTaxes

    I grew up in the Midwest and worked the early part of my career there. We never had power outages as frequently and for such long periods as we do in Fairfax County. Dominion’s reliability and maintenance efforts are bad news.

    In the aftermath of the derecho a couple years ago, I was talking to some of the outstate repair crew members. I bemoaned Dominion’s lack of tree trimming. I was told by two different crews from different states that Dominion has a bad reputation in the industry for its lack of tree trimming. A couple people told me they love Dominion outages as they get lots of overtime.

  4. LarrytheG Avatar
    LarrytheG

    @TMT – what I’ve heard is that NoVa folks don’t want their trees cut or even trimmed – they want the lines buried – no?

    Would you think that – that’s the right answer – and people who want them buried – pay for it?

    or something different?

  5. TooManyTaxes Avatar
    TooManyTaxes

    Larry – I am very sure some people don’t want their trees trimmed. But if Dominion has an easement and a franchise to provide electric power, it needs to follow the VSCC guidelines that incorporate ANSI A300 .

    If the costs for burying lines in an area are less than the maintenance and repair costs for overhead lines for a comparable period of time, I can see an argument that Dominion ought to do the work and recover the costs from ratepayers. Otherwise, it seems reasonable to amortize the costs over a reasonable period of time and recover them from the affected customers who get buried service.

    For example, our neighborhood has buried service to each home. But overhead lines connect the neighborhood to a main line. We used to be out of service every time the wind blew over 10 mph – or so it seemed. I raised hell with Dominion. An engineer called me. We talked several times. He looked at the repair costs associated with outages and found them to be excessive. Dominion then engineered and deployed a new overhead entrance line. Because the Company saved costs over time, the new line’s capex costs went into the rate base.

  6. LarrytheG Avatar
    LarrytheG

    we have in our neighborhood a powerline that is higher than any tree and that line has never been affected by storms… those lines are never touched.

    that would seem to be the most cost effective way to not have to do tree trimming, removal, underground, etc…. certainly over the long run.

    but it is not the prettiest thing you ever saw… it’s a major impact on the landscape.

    I’m sure if you left this up to the power company – this is the option they’d choose.

    but it’s not the option that most residential folks would choose.

    the question is – who pays for the more expensive option and does that option become the default anywhere and everywhere rather just in the most squeaky wheel subdivisions?

    do we all pay for the “everywhere” policy or do the folks who want the more expensive option pay?

  7. RationalThinker Avatar
    RationalThinker

    Here is my take…..Dominion chose the wrong strategy to get this program approved. They by-passed the SCC and went straight to the legislature. The legislature approved a bill regarding the undergrounding program BUT left a “loophole” by specifying that the SCC would determine how much money to be spent on the program. How would you feel if you were an SCC commissioner and Dominion “went around” you to get this program passed. The SCC exacted their “revenge” in 2015 by not approving any ($0.00) money be spent on this program. Now Dominion has decided to go back to the SCC in 2016 for approval. And it appears that the SCC is still “ouchy” over the initial snub. It may take awhile for the SCC and Dominion to play nice again. Problem is, the SCC is playing politics with the customers’ electric reliability.

    1. Acbar Avatar
      Acbar

      Well said — which underscores Jim’s point, Dominion must keep the regulator (not merely the GA) happy.

  8. LarrytheG Avatar
    LarrytheG

    All things considered – there needs to be a “policy” such that any residential customer knows what the policy is and how it would apply to their situation.

    It cannot be something that changes or is different according to similar circumstances.

    So – that policy must take into account how much a policy like that could potentially cost as residential across the state stepped up to participate and it needs to make clear who pays what for older subdivisions.

    And I’ll give a similar example with older subdivision roads where the developer put the road in not to VDOT specs so the road is not maintainable by VDOT and postal and schools have issues… using such substandard roads especially in bad weather when the road is not cleared or washouts addressed.

    VDOT has an “app” for that. They’ll pay half if ALL the residents in that subdivision agree to pay their pro-rata share. The county helps out by setting up a tax billing that spans 20 years or so – to make it affordable but make no mistake – there is real money involved for the homeowners to bring that road up to VDOT specs and accepted into their system.

    DVP could work a similar agreement but it would require all property-owners to agree to sign up and pay their fair share.

    I must say – we’ve had several roads done that way in Spotsylvania but a greater number of others where the property owners would not all agree.

    so – put it to the property owners and let that be their choice.

  9. Acbar Avatar
    Acbar

    Jim, your last paragraph is so true, and so often overlooked. Follow the money. “It may be hard for people to wrap their mind’s around this, but the SCC is boss and Dominion is the supplicant.”

    The biggest problem with undergrounding, in my experience, is that the cost by default is socialized (across all ratepayers) but the benefits are shared very unequally by customers. You and the comments above touch on this, but there’s a lot of tension here: Underground only where there’s a positive net cost-benefit? Then the people whose neighbors make the cut and get undergrounded (but they don’t) feel cheated. Underground all service to an entire neighborhood? Acceptable for those who suffer a little trenching through the back yard for service drops, but hell on those who lose every shade tree along the street where the main distribution line is buried. Change the zoning or building code to require undergrounding? The incremental cost may be reasonable for new service going forward, but retrofits? And should the government in that jurisdiction, or the customers in that jurisdiction, or the customers in the neighborhood affected, or all customers, pay the net cost (assuming it’s negative)? And how calculate those costs and benefits, over what time frame, should non-‘quantifiable cost’ aesthetics be factored in, etc.? Often people come away with the feeling that only those with political clout get the undergrounding and everyone else is slighted; is the best solution politically always to say no until forced by the legislator or regulators? This is just a sample of the issues.

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