Burying the Grid

As parts of the US experienced prolonged power outages caused by Hurricane Ian, an age-old question resurfaced: Why is the electrical infrastructure not underground—and would it have made a difference against such an extreme weather event?

By October 2022, there had already been 15 weather and climate events in the US that caused at least $1 billion in losses, which is nearly double the annual average of 7.9 events from 1980 to 2022, with several months left in the year. Unfortunately, this 2022 statistic is not surprising, as the annual average of billion-dollar weather and climate disasters increased to 18 over the past 5 years (2017-2021).

Barriers and Benefits to Undergrounding

The bad news is that historically only 20%-25% of new transmission and distribution (T&D) lines are installed underground, and while that will increase somewhat over the next decade, undergrounding is unlikely to replace overhead installation as the standard anytime soon. In March 2022, Lawrence Berkeley National Laboratory, in conjunction with the Department of Energy (DOE), presented findings from a Texas-based study indicating that a sweeping mandate to underground all power would only return $0.30 in total benefits for every dollar spent. Several states have investigated the possibility of undergrounding all power lines. North Carolina, for example, conducted a study on the feasibility of 100% undergrounding; however, projections of a 25-year timeline as well as residential bill increases of 125% were ultimately deemed unacceptable. The nationwide average cost of installing new underground power lines is roughly 3 times the price of installing overhead lines. In urban areas, converting overhead lines to underground retroactively costs $1.1 million per mile on average, with prices in some areas exceeding $6 million per mile. New and retroactive undergrounding is simply cost-prohibitive in many areas.

While the cost and complexity of wholesale undergrounding is a significant barrier, the improved reliability that undergrounding provides cannot be overlooked. Florida Power & Light, the largest public utility company in Florida, serving more than 5 million customers, found that underground T&D lines performed 85% better than overhead lines during Hurricane Irma in 2017 and are 50% more reliable on a day-to-day basis. The question is how to determine where undergrounding makes sense. According to the Berkeley Lab and DOE research, undergrounding all T&D lines should be considered for more densely populated areas (more than 40 customers per line mile) and for areas with expected vulnerability to frequent and intense weather. Additional factors that help improve a project’s cost-benefit ratio are possible economies of scale, such as undergrounding more than one circuit or including additional utilities such as telecommunications at the same time, as well as easements—in situations where overhead easements are tight and difficult to maintain, undergrounding may offer more flexibility. Throughout Europe, where undergrounding economics are improved by higher customer density and looser design standards, over 48% of the distribution grid is underground—more than double that of the US.

While overhead power lines are still the standard throughout most of the US, most utilities that serve customers in storm-prone areas have strategic undergrounding and grid-hardening initiatives underway. As severe weather patterns increase in frequency, more electric customers are being affected, while customers’ reliance on electricity is expanding to include EVs, heating, cooking, and communications. A reliable and resilient electric grid is paramount to facilitating a transition to clean energy; therefore, we can expect to see those strategic undergrounding initiatives expanded to include a larger portion of power lines. State and federal involvement is also playing a significant role in pushing the pace of undergrounding. For example, with the approval of state regulators, the investor-owned utilities in California, where the cost of underground conversion is roughly $2-$6 million per line mile, are converting thousands of line miles each year to curb utility-caused wildfires.

Utilities Should Revisit Their Undergrounding Plans

With end-user reliance on clean electricity expected to grow exponentially over the next two decades, the utility definition of strategic undergrounding needs to expand accordingly. Federal funding made available through the 2021 Bipartisan Infrastructure Law could also make the economic calculus of undergrounding power lines easier. Up to $20 billion is available to governments and utilities to pursue investments in grid hardening, smart grids, and transmission through multiple DOE-administered programs for which undergrounding power lines meets the eligibility requirements. With new funding sources available and growing attention on energy resilience, the time is right to explore a more aggressive undergrounding strategy.