An Examination of the Costs and Critical Characteristics of Electric Utility Distribution System Capacity Enhancement Projects

This paper classifies and analyzes the capital and total costs for 172 electricity distribution system capacity enhancement projects undertaken during 1995-2002 or planned in the 2003-2011 time period by three electric power utilities in the Western United States. Projects were sorted into eight categories: capacitors, load transfer, new feeder, new line, new substation, new transformer, reconductoring, and substation capacity increase. Capital cost and total cost frequency distributions were constructed along with descriptive statistics for each project type. Ordinary least squares (OLS) regression analysis was performed to determine how various project variables (e.g., project location and primary customer served by the project) impact the unit costs. Distribution system capital costs averaged $51/kVA of additional capacity and varied significantly by project type. New substations and new transformers were the most costly, $112/kVA and $87/kVA respectively, while reconductoring and substation capacity increase were found to be the least expensive ($21/kVA). Using the full costs of delivering electricity over the 30-year life of a project increased the mean project cost to $100/kVA. The OLS analysis revealed that the primary determinant of total project cost is project type. Other variables, such as the geographic location of the project and primary customer served, did not yield statistically significant results