Juneau -- The Senate Thursday approved a measure for a reasonable ongoing program in Anchorage to place overhead utility lines underground.

"Placing overhead utility distribution lines underground will reduce maintenance costs, reduce the number of weather and accident related utility disruptions and minimize the visual pollution," said Senator Dave Donley (R-Midtown Anchorage), sponsor of Senate Bill 10. All new utilities already have to be placed underground in accordance with Anchorage Municipal Code because of these reasons.

SB 10 requires utilities to spend at least one percent of their annual gross revenue on a program of placing existing overhead utility lines underground. The City of Anchorage already has municipal ordinances that encourage utilities to spend up to four percent of their gross revenues on placing existing overhead distribution lines underground. However, this municipal ordinance places no minimum on such annual expenditures. This means that utilities currently do not have to spend anything on undergrounding existing overhead utility distribution lines.

Subsequently, because of deregulation and increased competition, utilities are not spending anything on placing overhead utility distribution lines underground, since it would hurt their competitive position to spend money on a program that other utilities were not spending money on. Senate Bill 10 merely creates a level playing field where all utilities would allocate the same percentage to underground overhead utility distribution lines. This would eliminate the current disincentive to underground that currently exists.

"Asking utilities to spend one percent of their annual gross revenue on an incremental and continual long-term program of placing overhead utility distribution lines underground is a reasonable request," stated Donley. "One percent of their gross annual revenue is a relatively very small amount to expect of utilities, but over many years will go a long way toward improving our communities," continued Donley.

Municipal Light &Power’s gross annual revenue is roughly $70 million, consequently SB 10 would require them to spend $700,000 on a program to underground overhead distribution lines, explained Donley. "ML&P estimates that it costs $1.8 million to underground one distribution line mile. If that is the case, then we are only requiring them to underground less than half a mile of overhead utility distribution lines annually. I think this more than a reasonable approach," he said.

The Anchorage Assembly recently passed a resolution (AR NO.99-84(S)) in support of Donley’s bill and ML&P supports an ongoing effort of undergrounding overhead utilities in Anchorage, since they already do it to conform to the city ordinance.

"At the one percent rate, it will take hundreds of years to underground most existing distribution lines in Anchorage. However, a steady and incremental program of placing overhead utility distribution lines underground is good public policy," noted Senator Donley. "This concept represents good policy for larger Alaska communities. The visual environment in Anchorage would be dramatically improved by an on-going program to bury existing overhead lines underground," Donley said.

"Mandating a minimum expenditure ensures continued, steady progress toward eliminating Anchorage’s overhead utility lines," said Donley, "At the same time, it creates a level playing field for any competing utilities. Competitors would be required to put utility distribution lines underground, so a company that did so would not be at a disadvantage to one that chose not to."

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