Underground power

Underground power is a feature of every modern city, being an aesthetical improvement to real estate, making suburbs more desirable and lifting property values. Beyond these considerations, underground power has been identified by the EMRC as a climate change adaptation response. Underground power is impervious to extreme weather conditions, which are only likely to become more prevalent due to climate change.

The State Government Underground Power Program (SUPP) was established in 1996 to improve the standard of electricity supply, after a report found that 80% of damage to power lines was caused by falling trees. Since then, 69 projects have been completed, providing underground distribution systems to over 76,000 properties. As a result of the program, and a planning requirement since 1992 that all new subdivisions must have underground power, about 52% of Perth households now have underground power.

The program offers two types of projects:

Major Residential Projects involve the conversion of overhead supply to underground distribution lines in suburban areas
Localised Enhancement Projects aim to beautify urban gateways, scenic routes and tourism/heritage centres, particularly in regional towns.

The SUPP is funded 50% by local governments (through ratepayers who directly benefit), 25% by the state government and 25% by Western Power.

EMRC is advocating for the State Government to improve the existing SUPP to address inequities in its delivery. The distribution of underground power programs is biased in favour of more central and more affluent communities which has the effect of further improving real estate values in those communities; plus furthering the gap between different Perth areas and preventing a harmonious and balanced infrastructure development of the metropolitan area.

In April 2010, the State Treasurer asked the Economic Regulation Authority (ERA) to conduct an inquiry into the overall costs and benefits of the SUPP. The Terms of Reference had regard for:

the costs of undergrounding the overhead electricity distribution network
a comparison of the costs associated with maintaining the current distribution network compared to undergrounding
the types of costs which are avoided as a result of undergrounding the overhead electrical distribution system
the identification and quantification (where possible) of all costs and benefits of underground power
an analysis of the distribution and timing of benefits, including an appraisal of who benefits and the overall public benefit to the wider community.

The EMRC provided a submission to the ERA WA on the Issues Paper: Inquiry into State Underground Power Program Cost Benefit Study.

The ERA released the final report in September 2011 outlining the costs and benefits of the SUPP for major residential projects and proposed changes to the share of funding between the government, individual households and the wider community. This report can be accessed here.

In October 2010, the Minister for Energy released the terms of reference for a review of the SUPP. The review will include:

An investigation of costs of future rounds of the program
The identification of priorities for undergrounding power lines with respect to extreme weather events
A review of the policy objectives of underground power
Consideration of ways of improving the equity and affordability of the program.

The review is being conducted by the Office of Energy and will provide advice to the Minister for Energy as to:

whether the SUPP should continue
if the program is to continue, the options as to what form it would take
the respective costs and benefits of the options.

The Office of Energy will provide its final report to the Minister for Energy by the end of March 2012.
For more information visit the Public Utilities Office website.

For further information please contact:
Marilynn Horgan - Director, Regional Services
Phone: (08) 9424 2208
Email: marilynn.horgan@emrc.org.au