Some Frequently Asked Questions Related to the Proposed Undergrounding Project

Frequently Asked Questions (Last Updated: November 16, 2007)
In order to better address the concerns of the Palm Beach community, we have compiled a list of the most frequently asked questions as they relate to the proposed undergrounding project. To view the questions, simply click on one of the categories below. To view the answers, click on the question. If you have any comments or concerns or if you have a question that has not been addressed, please feel free to contact us.

General Considerations

Why should we bury utility lines instead of improving the strength of existing infrastructure or leaving things as they are?
Many residents in Palm Beach note electrical outages both on a daily basis and during weather events, as well as unattractive utility lines, establishing a need to discuss improvements. Improving existing utility systems to withstand more powerful storms is called hardening and typically requires replacing existing poles with taller, concrete poles, placing transformer equipment higher, and using hardier equipment to affix them to the poles. Undergrounding instead involves burying utility lines underground, thus removing poles and above ground lines. Both processes involve construction impacts, but hardening is done at the discretion of the utility and is a long-term prospect.

It is predicted that Florida may see increased hurricane activity over the next 20 to 40 years, and it is difficult to build or improve an overhead utility system that will withstand strong weather events, while underground lines are typically protected. When new utility systems are installed in Florida, underground utilities are chosen 70 percent of the time because of their advantages. In addition, underground utilities are typically considered to be more aesthetically pleasing and as safe as overhead transmission, phone and cable television lines, and utility and telephone poles are completely eliminated, providing a more pleasant, unobstructed environment for residents and visitors. In addition, while a hardened system can withstand higher wind speeds than our current utility system, they are likely unable to handle the wind speeds of a category 4 or 5 hurricane and are unable to withstand flying debris, whereas an underground system should be protected from both.
What if I don’t want my utilities buried? Can I “opt out” of the program?
The true benefits of an underground utility system are recognized if the town’s complete system is underground. If certain parts of the town’s system were underground and some were above ground, those that are above ground are more susceptible to outages and those outages can in turn affect underground utilities because they are connected. The Town Council believes this project should be approached as a town-wide project with the opportunity for voting residents to receive necessary information on the project in order to make an informed decision at the polls regarding the future of the project. If the project is approved by voters, every resident will be affected.
I read that FPL is upgrading the system on the North end of town as part of their 10-year storm-hardening plan. If that is the case, why would we move forward with undergrounding?
FPL has replaced some equipment at 36 locations between Angler Avenue and Via Marila and from North Lake Way to North County Road. This work was the result of leftover repairs from previous hurricanes the town experienced and other needed routine maintenance, rather than as part of hardening activities being pursued by FPL under the Storm Secure plan. This plan requires a hardening tariff that may impact ratepayers and would result in different overhead facilities than were previously in place. These FPL efforts will, however, help prepare our system for future hurricanes, though undergrounding is expected to provide better long-term protection. Both undergrounding and hardening involve construction impacts, but the storm-hardening aspects of FPL's Storm Secure plan will be implemented at the discretion of the utility. The decision on undergrounding will rest with Palm Beach voters.

Cost Considerations

What is the cost of this project and how will it be paid for?
The preliminary estimated cost of the project would be $89,450,000. This figure includes a 25 percent credit from Florida Power & Light (FPL), approved by the PSC. Based on a market interest rate of 4.67% the updated cost estimate would equate to an annual cost to property owners of $212 per $1 million in taxable property value for debt service years 1-5; $454 per $1 million in taxable property value for debt service years 6-30; and, $242 per $1 million in taxable property value for debt service years 31-35. That means an estimated daily cost of approximately $0.58 for debt service years 1-5; $1.24 for debt service years 6-30; and, $0.66 for debt service years 31-35, all based on cost per $1 million in taxable property value. A final, official estimate of the project cost will be provided with sufficient time for residents to review before voting and in some cases, binding cost estimates from the affected utilities. The PSC determined that a 25 percent credit shall be given in recognition of avoided storm restoration costs realized by FPL by virtue of underground facilities and will be instituted for a two-year trial period for local government underground conversion projects. This approved credit tariff, called the GAF tariff, is estimated to save the Town’s residents $6.18 million or more in electric utility underground conversion costs. The Town’s project, if approved by voters, would receive this credit for the duration of the project, as long as a master contract is signed with FPL prior to October 4, 2008. The Town and other interested municipalities anticipate formally seeking a time extension to this PSC tariff or requesting PSC action that will make the credit tariff permanent. In addition, another credit tariff is anticipated to be considered by the PSC in early 2008 that will be representative of the avoided operations and maintenance costs avoided by FPL by virtue of the benefits of installing underground electrical facilities. One can anticipate the Town working diligently to secure these additional underground construction cost savings in 2008.
Where will the money come from?
Costs would be paid through 30-year general obligation bonds with annual payments (Schedule A tax deductible, if applicable) based on the taxable value of one’s property. These annual payments would be payable with property taxes, but the cost would be noted as a separate line item with other voter approved debt, if any.
Why is the Florida Public Service Commission involved?
The PSC exists to ensure that citizens receive their utilities and essential services in a safe and affordable manner. The PSC, along with the Florida Legislature, is committed to enhancing the reliability of the utility system. In addition, it is understood that conversion to an underground system results in savings for the utility company over time because of the economic and reliability benefits. As such, the commission has approved a 25 percent credit for electrical undergrounding projects for local governments in FPL’s service area.
Will we be pursuing credits from utilities other than FPU?
We are always looking at areas in which additional costs can potentially be cut. Any realized savings will be passed on to the residents.

Timing and Process Considerations

How long will the undergrounding process take?
The impacts to individual streets and private property are expected to be minimal, as each phase of the conversion, which will include multiple streets, is expected to last approximately one year. The overall process to convert the town will take an extended period of time because of the magnitude of the project (current estimates gauge approximately 10 years as the worst case scenario, but do not take into account the fact that we will likely improve our processes as we go along, thus speeding up the conversions). Each utility has a different distribution system that does not necessarily coincide with the others, so much analysis of each utility’s infrastructure layout, how they’ve been installed and how that correlates to the geographic area will be conducted to determine geographic phases. This phased approach will greatly reduce community and individual impacts.
I thought we were voting on undergrounding on Feb. 6, 2007. I understand that has been postponed. Why?
The Palm Beach Town Council voted November 5, 2007 to postpone the referendum on utility undergrounding, in order to ensure that all costs associated with the project can be determined, and firm pricing secured before residents are asked to vote. A referendum is anticipated to be held in late 2008 or in early 2009 in which town residents will decide whether or not the project should move forward. The Town will also vote on two other Town improvement issues, beach restoration and drainage, on December 18, 2007.
When would the utilities in my neighborhood be converted?
The undergrounding project would take place in phases, with each phase including multiple streets and taking approximately one year, and individual impact being much less than that. At this time, only the first phase has been identified: the area south of Sloan’s Curve and the area from Onondaga Avenue north to the Inlet (this area represents 23 percent of the utility grid serving the town). Future phases will be determined as the project progresses and will be based on the existing utility system configuration of each utility company and the design used for the new underground utilities.
How will the Town staff adequately handle a project of this magnitude in addition to their day-to-day responsibilities?
The undergrounding project would take place in phases, with each phase including multiple streets and taking approximately one year, and individual impact being much less than that. At this time, only the first phase has been identified: the area south of Sloan’s Curve and the area from Onondaga Avenue north to the Inlet (this area represents 23 percent of the utility grid serving the town). Future phases will be determined as the project progresses and will be based on the existing utility system configuration of each utility company and the design used for the new underground utilities.
Some towns are installing fiber optic communication wires. Will this be part of our undergounding project?
If the undergrounding project is approved we expect that the communication service lines being buried will be state of the art fiber optic wire. The Town will insist that all technological upgrades that are needed to provide the highest quality and the latest services to this community be done at the time of the conversion to underground service. Comcast, one of our providers, already makes use of fiber optic technology. While negotiations are currently underway, BellSouth/AT&T has indicated that they are desirous of upgrading their system to fiber optic.

Fiber optic utility wires transmit voice, video and data signals at broadband speeds. Many communities around the nation are transitioning from older forms of transmission to this advanced alternative. If the project is not approved, it is possible that providers will need to make the transition to fiber optic wires at a later date to remain competitive.

Effects and Results of Undergrounding

What can I expect the undergrounding process to be like?
If approved by voters, the undergrounding project would include a 100 percent conversion of the town’s utilities including FPL, BellSouth and Comcast. Almost 40 miles of utility grid would be buried with 100 percent of current poles being eliminated.

Each phase of the process will consist of several steps. The first will be the installation of a conduit, which will be completed by one contractor using a combination of horizontal directional drilling (HDD) and trenching. HDD will be the primary means, as it is less invasive and results in less disruption to traffic and roadways. Trenching will be done with a back hoe, Bobcat or Ditch Witch in some areas, as it is a less costly process. Once the conduit is installed, the utility companies will run their lines to the conduit. Those lines will then be connected to homes and the new underground system will be activated. Finally, the overhead system will be deactivated and removed.
How will the process affect my neighborhood?
Dark green metal cabinets would be strategically placed to accommodate the transformers and switch cabinets that are necessary to the electrical system. Underground switch cabinets are being contemplated and the cost for such is included in the cost estimate. This should eliminate any remaining aesthetic concerns for such facilities wherever the Town is able to incorporate such into the construction plan. They are expected to reside in the road right-of-way to avoid personal property disruption, except in very rare cases where this is not possible.

Switch cabinets are typically 67 inches long, 75 inches wide and 50 inches high and will typically be located at the end of a block with approximately one for every 40 homes. In an estimated 90 percent of cases, this process will not interfere with landscaping on private property because the transformers and switch cabinets will be placed in the road right-of-way (though any landscaping that has spilled into the right-of-way is likely to be affected). In the rare event landscaping must be modified because of installation in easements, property owners will be notified in advance and it will be the property owners’ choice as to whether or not they choose to screen the new facilities with landscaping.

Utility wires from the transformers and switch cabinets to homes will be buried throughout the town within the road right-of-way using a combination of HDD and trenching. HDD is a less invasive, but more costly process that involves a specialized piece of equipment that bores under ground to accommodate the wires. It is similar to drilling a well, but is horizontal in nature, in order to force pipes and wires through the soil underneath the surface. It can drill under walls, trees and sprinkler systems, thus virtually eliminating private driveway and sidewalk disruption. It is much less impactful to traffic because it takes up less space and does not affect the roadways. HDD will be used as the primary means for burying lines, with a focus on being cost effective by using the equipment where it is most needed. Trenching could be done with a small Bobcat back hoe or Ditch Witch and each trench is typically one to three feet wide and less than four feet deep. Trenching will primarily be used in the road right-of-way and in areas where it will cause little disruption to private property. (The road right-of-way is the property upon which a public road lies. The pathway of utilities in or adjacent to one's back yard is typically an easement.)
How do floods affect an underground system?
It is important to remember that no utility system is 100 percent reliable. It is unlikely that a waterproof underground system, which is designed with flood resistant, insulated lines, will be affected by flooding or other weather events unless there is a flood of catastrophic proportion.

When Hurricane Wilma flooded much of Cancun, Mexico some of its Utility Distribution Switchgear units were completely submerged in floodwater. For four days, high winds, debris and salt water challenged the city's underground utility system. After the storm, when crews assessed the damage to the system, they found it largely unaffected. One unit was damaged by a fallen tree, others had broken voltage indicators, but the rest suffered only minor superficial damage.
How do outages in surrounding areas that have overhead utilities affect an underground system?
It is important to remember that no utility system is 100 percent reliable. Because the power source for Palm Beach comes from outside of the town, and that distribution system would may not be underground, it is possible that outages may occur in Palm Beach from those above ground facilities. These feeder and substation outages are less likely than outages to individual homes with above ground utilities, and they are deemed a higher repair priority by the utility than individual homes, and repaired sooner following a major outage. Thus, any windstorm related outages that may occur with an underground system are expected to be much briefer than with an above ground system where individual power lines are affected.
How might this conversion impact local business?
An analysis and report published by PowerServices Inc. (funded by a consortium of Florida towns including Palm Beach) notes that if Florida’s electric infrastructure had largely been underground in 2004 and 2005, the overall economic savings would have been $50 billion. It is impossible to say what the direct economic impact of underground utilities will be on local businesses, but there is no doubt they will see the same reliability and aesthetic benefits as residents.
Is there any record of successful undergrounding projects?
The reliability impact of underground conversions has been demonstrated through the experiences of other communities:

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