A series of severe storms this year has left millions without electricity. An affordable solution may exist.
By Brian Dumaine, senior-editor-at-large
FORTUNE -- The freak snowstorm that hit the Northeast on Halloween weekend felled branches and trees at a dizzying rate -- New York City's Central Park alone lost 1,000 trees -- and downed hundreds of power lines. The blizzard left some 2 million without electricity -- many for more than a week. The even weirder thing is that this didn't really need to happen. As severe storms become more frequent and the losses from closed businesses and absentee workers add up, one is tempted to ask a very simple question: Why don't we bury our power lines?
Well, it turns out the answer isn't so simple. Numerous studies conducted by utilities over the years conclude that it is not economically feasible to bury lines. The most common estimate is that it costs 10 times more to bury them than to string them on poles. The North Carolina Utilities Commission said that burying wires statewide would cost $41 billion, take 25 years, and would more than double monthly electric bills. The news gets more discouraging. Some experts say that underground cables are more reliable than those above ground but only by about 50%, and that advantage is somewhat counteracted when you consider that it takes much longer to find, dig up, and repair a faulty wire. Why do underground cables fail at all? Floods and earthquakes can short lines. There's more: The roots of a tree toppled in a storm could destroy a buried wire.
Is it that hopeless? Maybe not, argues Gerry Sheerin, an engineer and consultant in Ontario, who thinks the studies on cost and reliability are out of date and too high, perhaps by a factor of two. "Putting wires underground is absolutely a last resort with utilities, so they don't have much experience doing it and tend to overestimate the difficulties involved." That said, most new housing developments today bury their cables, helping the industry to gain experience. A nationwide program to bury wires could create economies of scale that would drive down costs. Also, new sensor technology could help spot breaks in underground lines, speeding repairs.
Who would pay for all of this? Public utilities commissions are unlikely to grant huge rate increases to utilities to bury lines. In this economy, not many homeowners would cough up cash for underground lines, even though doing so could boost curb appeal and thus house values.
That leaves the federal government. The DOE has programs for improving the nation's grid, yet no one in Washington is seriously talking about allocating funds to bury power cables. The issue at least should be studied more. Will the cost of burying lines be offset by the billions that could be saved from not having to repair overhead lines and avoiding economic disruptions? No one knows. Maybe we should find out. In the meantime, get your flashlights and bottled water ready.
--Reporter associate: Caitlin Keating
This article is from the December 12, 2011 issue of Fortune.
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