Burying lines, raising questions
Virginia is weighing the expense and slow repair time
associated with burying power lines against reliability benefits.
BY CHRIS FLORES
247-4738
August 29, 2004
YORK COUNTY -- The residents of Terrebonne Road in York County
were not surprised that 17 days after Hurricane Isabel, they were the last
Hampton Roads residents to get their power back.
Despite the Dominion Virginia Power substation at the end of their street of
about 29 homes and the underground power lines throughout their development,
outages are a way of life here.
The electricity from the power station less than 100 feet from the first
Terrebonne home goes down Route 17, along another street and snakes through rows
of dense trees before the power line connects to Terrebonne's underground lines.
Terrebonne homeowners say they think a new underground power line is the
solution, but they don't want to pay for it. They are mad at Dominion, which
doesn't pay the expense of burying lines unless the company will get its money
back by avoiding high maintenance costs.
It's a long-standing problem with no easy answers that Isabel brought to the
surface. There are few state regulations or laws addressing how and when power
lines should be buried or who should pay for them. If a city, developer or
members of a neighborhood want the lines submerged, they must negotiate a price
with the utility and pay for it.
The Terrebonne residents have begged Dominion to connect the substation through
a short, new underground line to their existing submerged electric system. But
the small neighborhood doesn't want to pay the $25,000 to $35,000 bill, about
$1,000 per home.
"I think they would have made their money back by now if they would have
done it 20 years ago," said Ellen Rhodes, who lives at the end of the
street and has been fighting the utility over the issue for two decades.
Del. Thelma Drake, R-Norfolk, saw the lack of formal guidelines as a problem.
Drake sponsored a General Assembly resolution this year that ordered the
Virginia State Corporation Commission to study whether there is a need for new
laws or regulations governing the process.
Drake cited post-Isabel problems for the need to look at burying more lines. But
there are lots of problems with moving the lines, including substantial expense,
slower repair time for buried lines and a debate over whether all ratepayers
should pay for a benefit given to the few.
One of the most recent studies on burying power lines was done in North Carolina
in November 2003 after a December 2002 ice storm caused widespread damage.
Dominion has 115,000 customers in the northeastern part of the state. North
Carolina regulators calculated that it would cost $41 billion and take 25 years
to move power lines underground in the state - causing the average residential
bill to jump 125 percent a month.
A recent study by the Edison Electric Institute, a think tank and lobbying group
for the industry, estimated that it is 10 times as expensive to bury power lines
- about $1 million a mile versus $100,000 above ground.
The North Carolina study predicted that operation and maintenance costs would
explode because it is an estimated four times as expensive to work on buried
lines. That seems to debunk an assumption in the Virginia resolution that
burying cables "may" reduce maintenance costs.
The repair time takes nearly 60 percent longer for underground lines, but
outages are cut in half compared with overhead lines, said the report. But the
regulators said it is worthwhile to identify spots with chronic outages and
weigh whether it would be cost-effective to bury the lines.
That determination is often the rub.
Dominion customers don't understand how the expense of burying lines is
calculated. Dominion generally submerges existing overhead lines only if the
move will not result in any extra expense for ratepayers or the company.
The utility is not looking at how much revenue it lost for each customer in an
area from the times when their power went out in the past. Those opportunity
costs are tiny compared with the other expenses that must be weighed, including
the wasted money originally spent on the overhead lines that would be torn down.
"That's a very small dollar amount compared to the other factors like
tree-trimming and maintenance costs," said Phil Powell, director of
delivery, planning and reliability for Dominion.
The number of people who would be affected by burying a line is not a factor the
company considers.
Powell said the utility would need to either eat the costs or get permission
from the state to raise rates - and right now those are capped through 2010 - to
pay for projects that don't make the system cheaper to run.
"We're very conscious of the fact that we need to keep our rates at a level
our customers can afford," said Powell.
When most new subdivisions are built, the developers decide whether they want
lines underground. The builders might negotiate the price with Dominion and then
pass those costs to the people who buy those homes. Sometimes Dominion will
build the lines underground for free if a development meets certain size
criteria.
In the case of the Terrebonne Road residents in York County, they say they paid
for having the underground lines in the development. But the reliability that is
supposed to bring means little because the electricity travels through the
middle of so many trees.
"It makes absolutely no sense," said Rhodes. "I have no idea why
they decided to do it that way."
Dominion has said it expanded its line burial program after ice storms in late
1998 that knocked out power for 390,000 customers. The company has spent about
$5 million a year since then to move lines underground in areas with persistent
outages.
If the problem is with trees, and if it can't be corrected through trimming,
Dominion says it will bury the lines. But the folks on Terrebonne are served by
lines that chronically fail and clearly violate the policy that trees near lines
can't be within 15 feet of power lines.
Rhodes asked a Dominion official why the utility wouldn't do something about the
lines that go through the middle of lines of trees.
"He said some of the homeowners don't like it," said Rhodes.
It's not just neighborhoods that are asking to have lines buried. Cities have
the option of paying for the burial of lines and then passing the cost to
residents. Arlington County is paying Dominion to bury lines, and other
interested cities helped spur the request for the current state study.
Dominion was part of an important case on this issue in the early 1980s, when a
local government body in rural Virginia wanted its local lines buried. The local
government wanted all Dominion customers in Virginia to pay for the upgrade.
State regulators refused, saying the customers who benefit from the upgrade
should pay for it. An appeals court agreed, and Dominion has made it clear since
that local governments must find a way to pay for burying lines if they want it
done.
But there has been a new wrinkle in Dominion's policy. After Norfolk spent $55
million tearing down homes to redevelop its East Ocean View area, the city got
Dominion to agree to install underground lines in the new development going
there.
City officials had complained that paying to bury lines only in new developments
discriminated against cities' redevelopment efforts and contributed to sprawl.
Dominion agreed to bury lines for redevelopment projects if the developer knocks
down the old overhead lines.
One of the thorniest questions the State Corporation Commission will look at is
who should pay for burying existing overhead lines. And if all ratepayers pay
for the cables to be buried, how does the company and/or the state determine
which neighborhoods get the privilege first?
Terrebonne resident Mary Mitchell says all ratepayers should cover the burying
of lines at the worst spots. She compares the situation to when people with
homeowners insurance on the Peninsula pay more because a bunch of homes were
flooded in Virginia Beach.
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