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Undergrounding Policies

  • BGE Undergrounding Policy As filed with the Maryland Public Service Commission on October 15, 2004

Background

BGE has approximately 22,550 circuit miles of distribution lines. Approximately 9,350 circuit miles are overhead distribution and 13,200 circuit miles are underground distribution. Since 1969, underground lines have been required for extensions of electrical distribution lines necessary for electric service per Code of Maryland Regulations.

Undergrounding can provide improved aesthetics, enhanced reliability, more public safety, reduce operations and maintenance expenses. There are many benefits to undergrounding, but existing overhead lines are the preferred method of providing reliable electric service. Overhead lines are preferred for these reasons:
    • Undergrounding remains very expensive. The Maryland Public Service Commission’s Selective Undergrounding Working Group final report completed in 2000 concluded that the average cost of undergrounding existing electric overhead installations in MD is $900,000 per mile.
    • The average useful life of underground cable is approximately 30 years, compared to 50 years for overhead lines.
    • Undergrounding usually requires that other overhead utilities (cable TV, telephone, street and private area lighting) be relocated at the same time.
    • Undergrounding involves trenching, directional boring or open cutting pavement. Meter upgrades and modifications to electrical service connections of customers would also be required at the customer’s expense.
    • Underground cables are not immune from damage during storms and can sustain damage from lightning and flooding and dig-ins.
    • When underground cables are damaged, locating the damage and making the necessary repairs usually takes much longer than it does with overhead lines.
BGE Policy

BGE's undergrounding policy is designed to work with petitioners to determine if undergrounding existing overhead distribution lines will actually accomplish the desired results. Then, considering all of the costs and benefits of undergrounding, the petitioner decides to go forward with undergrounding. BGE will then work with them to identify mutual benefits of undergrounding that could possibly reduce the costs to the petitioner, seek alternative sources of funding for the undergrounding project and educate all affected parties as to the extensive requirements for undergrounding.
BGE has always worked with parties to consider all aspects of undergrounding. However, BGE's undergrounding policy was revisited and must comply with Maryland Public Service Commission ORDER NO. 79159 issued June 4, 2004 in Case No. 8977. This order directs utilities "to develop procedures to allow for selective undergrounding on a cooperative basis with municipal and county governments, customers, or homeowners groups. Such cooperation may include project coordination, management, rights-of-way provision, financing or other methods".
 
BGE will work with any municipal or county governments, individual customers, or homeowner groups to explore undergrounding in an area of interest. Undergrounding requests are handled by different processes depending whether the request is for a public relocation or a private relocation. Private relocation requests by business customers, communities/ groups of homeowners or individual homeowners can be directed to BGE’s Customer Care New Business Call Center. In some cases, additional coordination may be required and/or additional costs incurred by the petitioner to request other utilities to relocate non- BGE overhead facilities at the same time.
 
BGE internal procedures help facilitate undergrounding projects. BGE will determine if there are areas of mutual benefit that can help offset a petitioner’s cost without subsidizing a particular group of ratepayers or requiring an uneconomic utility investment. An estimate of these benefits will be provided and subtracted from the petitioner's cost estimate.
Note: Petitioner contributions-in-aid-of-construction (CIAC) to BGE for undergrounding projects are considered taxable by federal law if the projects do not have a public benefit and a gross-up for this tax is added to the total project cost. The gross-up represents the difference in the cost of the tax burden the utility pays up front and the present value tax benefit the utility receives through depreciation expense over the life of the installed assets. The gross-up tax does not apply to “public benefit undergrounding,” and BGE will determine if a project qualifies. In most cases the decision regarding the applicability of the tax is straightforward and leaves little room for discretionary judgment. However, where the determination is more difficult, BGE may contact the IRS for a ruling.
 
Requests to Relocate Overhead Lines to Underground Service
BGE will work with any municipal or county governments, individual customers, or homeowner groups to explore undergrounding in an area of interest.

For residential undergrounding requests contact:
1-800-685-0123, fax: 1-410-234-7406 Our Customer Care representatives are ready to serve you.
For private business relocation work contact:
1-800-265-6177 Representatives are available around the clock from 8 a.m. Monday to midnight Friday.

Webpage updated on January 28, 2015
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