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Evaluation of Underground Electric Transmission Lines in Virginia

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Evaluation of Underground Electric Transmission Lines in Virginia Report of the Joint Legislative Audit and Review Commission To the Governor and The General Assembly of Virginia Evaluation of Underground Electric Transmission Lines in Virginia HOUSE DOCUMENT NO. 87 2006 Members of the Joint Legislative Audit and In Brief Review Commission Evaluation of Underground Electric Transmission Chairman Lines in Virginia Senator Thomas K. Norment, Jr. House Joint Resolution 100 Vice-Chairman directed JLARC to study the criteria and policies Delegate Leo C. Wardrup, Jr. used by the State Corpora- tion Commission (SCC) in Delegate Vincent F. Callahan, Jr. evaluating the feasibility of Senator John H. Chichester undergrounding transmis- Senator Charles J. Colgan sion lines in Virginia, in- cluding the costs consid- Delegate M. Kirkland Cox ered by the SCC and the Delegate H. Morgan Griffith impact on property values Delegate Frank D. Hargrove, Sr. of installing transmission Delegate Johnny S. Joannou lines underground. Delegate Dwight C. Jones The study concludes that Delegate Robert D. Orrock, Sr. while technologies are Delegate Lacey E. Putney available to place trans- mission lines underground, Senator Walter A. Stosch underground lines are typi- Senator Martin E. Williams cally four to ten times more expensive than overhead Walter J. Kucharski, Auditor of Public Accounts lines. Underground lines can be less expensive than Director overhead lines when land values are high because Philip A. Leone they require smaller rights- of-way. The SCC has rarely sup- ported the use of under- ground lines, primarily due to cost and reliability con- JLARC Staff for This Report cerns. Improved technology may allow greater use of underground lines in the Bob Rotz, Senior Division Chief future. Ashley Colvin, Project Leader The SCC seeks to address Jamie Bitz the aesthetic, environ- mental, and property value concerns associated with overhead lines, but uses means other than placing lines underground, such as altering routes or adjusting the type or size of overhead towers. The study identifies areas for improvement in the This report is available on the JLARC website at process used to plan for and http://jlarc.state.va.us approve transmission lines in Virginia. Copyright 2006, Commonwealth of Virginia. December 27, 2006 The Honorable Thomas K. Norment, Jr. Chairman Joint Legislative Audit and Review Commission General Assembly Building Richmond, Virginia 23219 Dear Senator Norment: House Joint Resolution 100 enacted by the 2006 General Assembly directed JLARC to study the criteria and policies used by the State Corporation Commission in evaluating the feasibility of undergrounding transmission lines in Virginia. Staff were also directed to determine the effect of transmission lines on property values and the feasibility of allowing nearby property owners to pay for the installation of underground lines. On behalf of the Commission staff, I would like to thank the staff at the State Corporation Commission and Dominion Virginia Power and local government planning staff for their assistance during this study. Sincerely, Philip A. Leone Director Table of Contents Report Summary i 1 Introduction 1 Definition of Key Terms 2 Characteristics of Transmission Lines 4 Underground Lines Are Often Advocated During Contentious 6 Transmission Line Cases Electricity Is Supplied and Regulated by Several 6 Organizations Scope of the Review 11 Types of Underground Transmission Systems and 17 2 Extent of Use Underground Lines Are Used Infrequently for High-Voltage 17 Transmission There Is No Consensus on Which Underground Technology 23 Is “Best” for High-Voltage Transmission Underground and Overhead Transmission Line 29 3 Costs Overhead Line Cost Advantages Include No Need for 30 Burial and Inexpensive Insulation Several Factors Impact the Magnitude of Underground and 30 Overhead Costs Dominion Per-Mile Cost Figures for Underground Lines 32 Are Similar to Other Sources Underground Lines Typically Appear to Cost Four to Ten 33 Times More Than Overhead Lines Underground Lines Can Be Very Cost Competitive in Some 34 Unique Circumstances Typically, Underground Lines Cost More Even After 35 Accounting for Life Cycle Factors Somewhat Greater Use Of Undergrounding Could Increase 37 System Costs by Many Percentage Points, But Not Manifold 4 SCC Policies Affect Transmission Line Cases 39 Commissioners Must Consider Several Factors When 40 Evaluating Transmission Lines SCC Uses a Hearing Process to Review Proposed 43 Transmission Lines Reliability Concerns Affect Reviews of 49 5 Underground Lines Some Transmission Lines Are Built to Ensure the Reliability 49 of a Utility's Grid Expert Opinions Vary as to the Reliability of Underground 54 Compared to Overhead Lines SCC Has Cited Operational and Reliability Concerns in 64 Rejecting Undergrounding Environmental, Health, and Historic Resource 69 6 Concerns Constitutional and Statutory Provisions Emphasize 69 Environmental Protection Environmental Effects of Transmission Lines Are Addressed 71 Without Undergrounding SCC Has Not Found That Health and Safety Effects Justify 78 Undergrounding Undergrounding Has Not Been Used to Protect Historic 89 Resources Higher Costs Have Typically Discouraged Use of 93 7 Undergrounding Statutory Factors Emphasize Cost-Efficiency, But Cost 93 Alone Does Not Determine Cases SCC Has Approved Some Additional Expenditures to 96 Minimize Adverse Impacts of Overhead Lines Transmission Line Project Costs Are Paid by All Ratepaying 96 Customers of the Utility Undergrounding Has Been Approved When Less Costly or 98 When Ratepayers Are Not Affected SCC And Dominion Have Pointed to Higher Costs of 103 Undergrounding as a Reason to Avoid Its Use Impact on Property Values and Feasibility of 105 8 Payment by Surrounding Landowners Property Values Do Not Appear To Be Explicitly Considered 106 As a Factor by the Commission Feasibility of Allowing Surrounding Property Owners to Pay 117 For Underground Lines Is Limited The State’s Role in Approving Transmission Lines 123 9 May Diminish in the Future Dominion's Long-Range Plan Anticipates Many New 124 Transmission Lines Regional Planning and the Federal Energy Policy Act May 126 Change the Role of the SCC Need for Improved Information Availability and 137 10 Planning in Transmission Line Cases Limited Access to Information Has Important Policy 138 Implications Statutory Clarification May Improve the SCC’s Review of 143 Transmission Lines Improved Coordination Between Utilities and Localities May 147 Address Some Public Concerns Appendixes A: Study Mandate 161 B: Underground and Overhead Transmission 163 Structures Used by Dominion C: Supplemental Tables 165 D: Research Activities and Methods 169 E: Underground and Overhead Transmission Costs 171 F: Magnetic Field Readings 177 G: Unoccupied Transmission Corridors Owned by 179 Dominion Virginia Power H: Agency Responses 181 Supplemental Appendix (online only) JLARC Report Summary: Evaluation of Underground Electric Transmission Lines in Virginia • Technologies are available to enable electric transmission lines to be placed un- derground. (Chapter 2) s s g g • Except when there are very expensive right-of-way costs associated with an n n overhead line, an underground line is likely to be about four to ten times more i i expensive than an overhead line. (Chapter 3) d d n n i i • The State Corporation Commission (SCC) has rarely supported the use of under- F F ground lines primarily due to concerns about costs and reliability. (Chapter 5) y y • The SCC and Dominion Virginia Power do seek to address aesthetic, environ- e e mental, and property value concerns associated with overhead lines, but through K K means other than undergrounding, such as altering routes or adjusting the type or size of towers used in an overhead line. (Chapters 6-8) • More transmission lines are planned in future years, and improved planning and availability of information could enhance transmission line decision-making. (Chapters 9-10) House Joint Resolution (HJR) 100 from the 2006 Session of the General Assembly requires the Joint Legislative Audit and Review Commission (JLARC) to “study the criteria and policies used by the State Corporation Commission [SCC] in evaluating the feasi- bility of undergrounding transmission lines in the Commonwealth” (Appendix A). The SCC is the independent regulatory agency in Virginia charged with the regulation of all corporations, including utilities. These regulatory activities include reviewing transmis- sion line proposals submitted by electric utilities. As specific parts of the JLARC review, HJR 100 requires an examination of the con- struction and long-term operating costs considered by the SCC. It also requires consideration of the effect on property values result- ing from overhead lines and the feasibility of allowing nearby property owners to pay for underground construction. Electric transmission lines carry power from generating plants to local substations, where they are connected to neighborhood dis- tribution lines. Transmission lines can be built overhead on tow- ers, or they can be buried—a process referred to as “underground- ing” (Figure 1). Overhead transmission lines are typically installed on towers that are 80 to 140 feet in height and require a cleared JLARC Report Summary i Figure 1: Overhead and Underground Electric Transmission Lines in Virginia Source: Dominion and JLARC staff photographs. right-of-way that approximates the height of the towers. Some citi- zens are concerned that overhead transmission lines pose health and safety risks, or
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