Austin Energy staff present undergrounding feasibility study; find full conversion cost-prohibitive

Austin Energy staff and their consultant presented results of an undergrounding feasibility study on April 14, 2025, finding that converting the remaining overhead distribution lines to underground across the entire service territory would be expensive, technically complex and in most places not cost-effective.

The study, performed by 1898 & Co. (the consulting arm of Burns & McDonnell), estimated that retrofitting roughly 5,000 miles of overhead distribution line to underground could cost on the order of $50,000,000,000 and identified only a small number of sections where monetized benefits could exceed estimated costs. "We are not currently recommending a system-wide overhead-to-underground conversion of the distribution system," Arla Meer of 1898 & Co. said during the presentation.

The commission was told the study divided the remaining overhead system into roughly 5,000 sections to estimate site-level costs and life-cycle benefits. Staff and the consultant combined reduced future utility costs (for repairs, pole inspection and vegetation management) with monetized customer outage reductions (using the U.S. Department of Energy’s interruption cost estimator) to calculate a benefit–cost ratio for each section. The consultant reported about 33 sections — totaling roughly 20 miles — had a benefit–cost ratio of 1 or higher under the study’s assumptions, meaning benefits could match or exceed costs in those limited locations, but most sections did not meet that threshold.

Austin Energy staff placed the study within a larger planning effort they call the distribution resiliency plan, which will also incorporate an upcoming overhead hardening study and other existing reliability programs, such as wildfire mitigation and feeder-performance initiatives. "We need both reliability and resiliency," David Domchessen, Austin Energy vice president of electric system engineering and technical services, told commissioners, describing resiliency as the system’s ability to recover from nonstandard events and reliability as steady performance under normal conditions.

The presentation identified several site- and project-level factors that increase cost and uncertainty for undergrounding: shallow bedrock and rocky soils in parts of Austin, dense vegetation and critical roots, close spacing and multiple telecom attachments on poles, right-of-way and easement constraints, environmental and archaeological sensitivities, and the need to coordinate relocations with many communications providers. The consultant also noted that some customer-side work (for example, replacing an overhead service drop to an underground service) typically remains the customer’s responsibility and could be costly in some cases.

Lisa Martin, Austin Energy chief operating officer, said the utility will continue to require and support underground service design for new development (where undergrounding is far less expensive than retrofits), prioritize existing wildfire and vegetation-related risks, and examine where strategic conversion or other hardening measures make sense in concert with the upcoming overhead hardening study. "Putting something underground from the get-go is much less expensive; it’s much more cost-effective than retrofitting," Martin said.

Commissioners asked about scale, trade-offs and alternatives. One commissioner noted that utilities facing wildfire-related liabilities have taken different approaches; staff said some utilities shift to strategic undergrounding at critical locations while others prioritize newer poles and covered conductors, wrapped poles, composite poles or sectionalization and automation. Richard Genesee, vice president of customer energy solutions, highlighted ongoing pilots of alternative hardening measures, such as covered conductors and fire-resistant pole materials.

Staff said the undergrounding study is an input into a living distribution resiliency plan to be presented later this year, after the overhead hardening study and continued stakeholder engagement. The presentation also contrasted the estimated retrofit cost with Austin Energy’s five-year capital improvement plan figure of roughly $1.6 billion (across all system needs), underscoring the scale gap between the study’s full-conversion estimate and planned near-term capital spending.

The commission asked staff to provide interim updates and checkpoints as further analysis and planning proceed. Staff said they will return later this year with a fuller distribution resiliency plan that incorporates both studies, additional analysis and stakeholder feedback.