What makes it so much more expensive to do conversions versus new construction, especially considering that the customer pays for most of the peripheral work?
In conversions, FPL’s costs are significant. The work includes building a whole new system, while operating the existing service and then dismantling the existing service once the new one is up and running. The higher costs also reflect the fact that conversions in older neighborhoods — regardless of the type of excavation we use (boring or trenching) — have a lot of issues associated with working in-and-around and avoiding impacts to other utilities such as phone, cable, sewer, gas lines, water lines, etc. Finally, all new underground components must be acquired and installed, including conduit, cable (wire), padmounted transformers and switch cabinets. Additionally, shared main line work is usually required, which is even more costly than converting individual service and neighborhood lines. Typically, as a percentage of cost, dismantling runs about 15 percent, installing underground components about 65 percent, and actual excavation about 20 percent.
