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What Is the Cost To Run Power? | Factors to Consider

This article will explain the factors that determine the cost of running power to a new home or from an existing house to a barn or shed. I will also discuss the steps of running power, who you should call, and the most cost-effective and expensive ways to install electricity in a new home.

The cost to run power from the road to a new home at a distance of one mile can be between $125,000 and $250,000, with the average price being $187,500. Utility companies can charge between $25 and $50 per foot for running power lines, averaging $37 per foot. 

Who Should You Call To Run Power to Your New Home?

You should call the electric company that serves your area to power your new home. You can ask other homeowners in your area about the provider they use, look for a placard on the nearest utility pole that may carry the name of the utility provider, or find out from the website In My Area.

You can also call your county’s Planning and Zone Department to determine which electric company will service your property. You have to provide them with your zip code and address.

In recent years, some states (like Pennsylvania, Massachusetts, and Texas) and municipalities in the US have decentralized their energy markets. Consumers in these regions can choose their energy providers. Electricity suppliers in these markets are competitive, charge low prices, and provide many value-added services to vie for customers. 

Your energy provider might differ from the local utility if your property is in such a deregulated zone. 

Ensure that you shop around for quotes before choosing a company. One utility company might charge much less than its competitor to run power to a new residence.

You can contact the local utility company or the state regulatory commission to determine if you have an energy choice.

Two electrical technicians connecting power to a new construction

How Is the Cost To Run Power to a New Home Calculated?

The cost to run power to a new home is calculated using the distance of the house from the nearest utility pole. Other factors that impact cost are the number of poles, the length of wire required, the availability of a transformer, and the accessibility of the area.

Read on as I explain the factors determining the cost to run power to a new residence. 

The Distance of the House From the Nearest Pole

The greater the distance of the house from the nearest power pole, the more it will cost to run power. 

If your house is far from the road where the utility pole is likely to be, the power company has to install more poles and lengthier wires than they would for a house closer to existing utility poles. 

If your house is far from the road and you want the cables to travel below the ground, the power company must dig a long trench, increasing the cost of installation. 

Sometimes power companies do not charge for poles, wires, and trenches for houses situated at a certain distance from the road. 

Overhead or Underground Feeder Cables

The cost of installing a new electric service depends on how you want the power to reach your house. The feeder cables that transmit electricity from the power pole on the road can run underground or overhead. 

Installing underground wires costs more than setting up an overhead system. 

Installing an underground system entails digging a trench and laying down insulated cables that cost more than wires used in overhead systems. 

For instance, according to the Public Service Commission of Wisconsin, a new 69 kV overhead single-circuit electricity line will cost about $285,000 per mile. A 69 kV underground cable system without the terminals will cost approximately $1.5 million per mile.

A new 138 kV overhead cable system will cost about $390,000 per mile, while an underground line without the terminals will cost approximately $2 million per mile.

The Number of Poles

The number of poles that you must install depends on the distance of the house from the nearest utility pole. The nearer the house is to the road, the fewer poles you’ll need. 

However, sometimes the poles cannot be installed along a straight line. For instance, you may have to place them around a water body that may be present on the property. This extra distance increases the number of poles needed to run power from the road to the house.

The Amount of Electric Wire

The greater the wire needed to run power, the more the installation cost. The amount of wire required depends on the distance of the house from the road where the nearest power pole is. 

Sometimes, the wires may have to run around another building on the same parcel of land. In such a case, the cost to run power to the house is more than what it would have been had the wires run along a straight line. 

The Type of Cable Components 

You have to use direct-burial feeder cables for underground systems. These are insulated and cost more than the wires used to transmit power overhead. 

The cost of installing an underground system also depends on the type of cable components you use, which depends on the type of soil you have.

If you live in an area where the soil is hard, you must dig a shallow trench. In this case, you’ll have to use galvanized metallic conduits with individual conductors for shallow channels about six inches (15.24 cm) deep. 

On the other hand, soft, porous soil is easy to dig. You can dig trenches at 24 inches (60.96 cm) in this soil. You can then bury the wires using a PVC conduit that protects the cables along the channel and up to the house.

PVC conduits are cheaper than galvanized metallic conduits. PVC conduits are also simpler to install and do not require specialized equipment or skills. 

For a trench at a depth of 12 inches (30 cm), you have to use direct-bury UF-B (underground feeder) that has GFCI (ground-fault circuit interrupter) protection. These cost more than electrical cables encased in rigid non-metallic PVC conduits. 

The Length and Depth of the Trench, if One Is Needed

If you run power using underground cables, you will have to dig the trench from the nearest utility pole up to your house. The trench’s length depends on the distance, while its depth depends on the type of soil on the property. 

Trenching can cost between $400 and $1,200 per 100 linear feet, depending on the soil type and topography of the land.

Workers lay fiber optic or power cables next to a road
Laying new cable isn’t a small job

The Need for a New Transformer

Distribution transformers lower the voltage levels to make electrical lines running through neighborhoods safe. A single transformer can power a specified number of houses depending on its size. For instance, a 25 kVA transformer can power 6-7 homes in an urban area. 

Depending on the population density of the area where your house is and the current transformer’s size, you may or may not need a new transformer. The cost of running power to your house increases if the utility company has to install a new transformer. 

The cost of a new transformer can range between $3,000 and $7,000.

The Amount of Vegetation That Has to Be Cleared

State and federal vegetation clearance guidelines require you or the electric company to prune branches and other vegetation running near power lines to minimize the risk of outage from fallen tree limbs during severe weather events. You should prune the foliage more than what the minimum clearance requirements are. 

If your house is in a wooded region, you’ll likely have to clear parts of your land to create room to install the poles and run the wires. This land clearing increases the cost of running power to your house. 

What Is the Cheapest Way To Run Power to a House?

The cheapest way to run power to a house, barn, or shed is to use overhead wires. Utilities report that overhead electrical wires use triplex aluminum cables cheaper than underground wires. Overhead wires are also less time-consuming and energy-consuming than underground cables.

However, overhead cables are more vulnerable to falling tree branches, ice buildup, and high winds. Severe weather events can damage these wires. Repairing is expensive, and homeowners have to endure prolonged power outages and financial hardships before they can resume their daily lives. 

Consider the trade-off between cost and stability if your residence is in an area that witnesses severe weather events like tornadoes, hurricanes, and blizzards. 

What Is the Most Expensive Way To Run Power to a House?

The most expensive way to run power from the road to a new residence or the house to a barn or shed is using underground feeder cables. According to utilities, underground cable systems can cost five times more than overhead wires.  

The price of insulated underground cables can be three times as high as overhead wires. The installation cost is also much higher in the case of underground cables because trenches need to be dug at least 3-5 feet below the ground. 

However, underground cables are safe from elemental damage. So, the power supply is much more reliable if you use underground feeder cables in regions that witness severe weather events. These also save you money in costly repairs, and they’ll prevent you from going through hardship during a power outage.

Although running power using underground wires is expensive, you might want to consider this method if your house is not very far from the road or the barn is not very far from the house. 

What Do You Have to Do to Run Power to Your New Home?

Electrical circuit breaker panel in a new home construction

To run power to your new home, you have to get in touch with a utility company, obtain a cost estimate to decide if you want overhead or underground lines, and schedule a site evaluation by the power company. The power company will begin installation after you form a contract for service with them.

Read on to learn more about what you have to do to run power to your new home.

Contact Your Utility Provider

After you find out which power companies serve your area, contact them and provide them with details like your property’s address and zip code, the distance between the house and the nearest power pole or the road, and the amperage you need. 

Obtain a Cost Estimate

Once you provide information like the location of your property and the distance between your house and the road, the power company can provide you with a cost estimate.

Having a cost estimate from several power companies will help you choose a provider. Most importantly, this information will help you decide if you want to install overhead or underground wires. 

Schedule a Site Inspection

After choosing a service, the power company sends an engineer to inspect the site to figure out how to run the wires. This engineer will also determine the number of poles you will need, the length of wire you’ll need, and how much vegetation you need to clear.

The engineer will let you know if you have to clear vegetation.  

Set Up a Contract for Service

The contract is an agreement where you pledge to buy electricity from the utility company. 

Some power companies ask customers to install the foundation of their homes and the slab before starting any work to run power if they haven’t already. This measure ensures that customers build their homes and buy electricity as promised. 

There have been too many instances where power companies have installed poles and strung wires to discover that the landowner does not build a home and never buys power.

Obtain a Record of the Inspection

Some jurisdictions require that the city or the county inspect the installation of the wires and the poles before giving the green signal to the power company to install the electric meter. 

It is the job of the inspecting authority to send a record of the inspection test to the power company. However, you might have to follow up with both of them to ensure the city or the county has sent the record of the passed inspection and your power company has received it. 

Final Thoughts

Running power to your house is a significant portion of the costs you will need to consider when buying and developing property. Sometimes the fees can surpass your budget. It is always a prudent idea to obtain a cost estimate from the various utility companies in an area even before buying a parcel of land.

For more, check out What Size Generator Do You Need To Run a Furnace?