Underground Conversions: Cost and Payment Options
Understanding conversion costs
Overhead service was established in Florida by the Florida Public Service Commission as the construction standard for utilities because over time it has been the most cost-effective choice. The cost to build standard overhead power lines is already reflected in the rates we pay for electricity.
Typically, underground systems are more expensive than overhead. The cost differences between the two types of systems can vary widely depending on electrical system requirements and environmental issues.
The primary drivers for increased costs include:
- Much more expensive equipment and materials.
- Construction methods requiring extensive digging or directional boring.
Customers who request this conversion are responsible for paying any deposits for binding estimates and any additional costs not included in FPL’s estimate such as:
- Relocation of other utilities
- Hiring a licensed electrician
- Site restoration (driveway repairs, landscaping, etc.)
There are a number of payment options available:
- Customers can choose to pay in full.
- Special assessments on tax bills. Chapters 197 and 170 of the Florida Statutes allow municipalities to fund underground conversion costs by levying special assessments imposed on tax bills. Landowners benefiting from the conversion must be identified and the special assessment may be collected directly from the local government imposing the assessment or through annual property tax bills.
- Municipal Service Benefit Units/Municipal Service Taxing Units 125.01 of the Florida Statutes let counties establish these governmental units in certain areas and levy service charges or taxes within these units to fund underground conversion costs.
- Incremental payments through a new tariff and the monthly electric bill. The city could pay for the conversion and then recover its costs over a designated timeframe by having FPL add an underground fee on the bills of those customers in their jurisdiction who would benefit from the conversion. However, fees may not exceed:
- 15 percent of a customer’s bill.
- $30 for residential and $50 for every 5,000 kWh commercial.