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ORDER NO. PSC -2017 -0283 -TRF -EI DOCKET NO. 20170069 -EI • PAGE • The URD tariffs provide standard charges for underground service in new residential subdivisions and represent the additional costs, if any, the utility incurs to provide underground service in place of standard overhead service. The cost of standard overhead construction is recovered through base rates from all ratepayers. In lieu of overhead construction, customers have the option of requesting underground facilities. Any additional cost is paid by the customer as contribution -in -aid -of construction (CIAC). Typically, the URD customer is the developer of a subdivision. Traditionally, three standard model subdivision designs have been the basis upon which each IOU submits URD tariff changes for Commission approval: low density, high density, and a high density subdivision where dwelling units take service at ganged meter pedestals (groups of meters at the same physical location). Examples of this last subdivision type include mobile home and recreational vehicle parks. While actual construction may differ from the model subdivisions, the model subdivisions are designed to reflect average overhead and underground subdivisions. Table 1 shows the current and proposed URD differentials for the low density, high, density, and ganged meter subdivisions. The charges shown are per -lot charges. Table 1 Comaarison of URD Differential Der Lot Current Differential Proposed Differential Low Density $768 $694 High Density $459 $403 Ganged Meter $211 $158 Source: 2014 Order and 2017 Petition As shown in Table 1, the proposed URD differentials show a decrease for all model subdivisions. The calculations of the proposed URD charges include updated labor and material costs, as well as updated operational costs. Updated Labor and Material Costs The installation costs of both overhead and underground facilities include the labor and material costs to provide primary, secondary, and service distribution lines, as well as transformers. The cost to provide overhead service also includes poles. The cost to provide underground service includes the cost of trenching and backfilling. Duke reevaluated each subdivision design to determine if the designs still met current construction standards for the National Electric Safety Code (NESC) and Duke. According to Duke, all subdivision designs had minor modifications to meet NESC and Duke standards. Duke reported that it upgraded certain padmounted transformers in the underground designs, resulting in a minor increase in the differential cost. 0 ' $694 is calculated as follows: $408 (Table 2) + $286 (Table 3) = $694.