Exorbitant Costs to Upgrade Service?

My employer wants to upgrade the electrical service at one of his facilities, located immediately north of Toronto, from 1000 KVA to 3000 KVA.
The new outdoor transformer cost of about $70,000 is to be paid by my employer, though ownership of the transformer remains with the utility. The utility, in turn, insures the transformer, maintains it and guarantees a 6 hour replacement time should the transformer fail. A credit would be issued for the salvage of the old transformer. Should we choose to buy our own transformer, we would be responsible for its care and failure contigency as well the extra cost of HV primary switch gear.
Regardless whether a privately owned or utility owned transformer is used, an "upstream charge" of $135,000 is to be levied. According to the utility's planning engineer, this charge, prorated by the size of the upgraded service, is to offset costs to the utility's distribution infrastructure in the future. The primary feed supplying the existing transformer is large enough to accomodate the new, larger transformer, so this charge is not for immediate upgrades necessary for the service upgrade we desire.
Other charges include metering, decommissioning the old service and re-routing of the existing underground HV feed. All this at premium labour rates, as the work can only be done on weekends. Of course, the cost of the new LV switchgear and tying into the facilities distribution wiring is extra as is the cost of the transformer pad and incidental civil work.
At just over $400,000, all in (transformer, upstream charge, LV switchgear, et.al.), a strong incentive is created to delay or relocate the planned expansion in production that's driving this upgrade.
Anyone experience similar seemingly high industrial service upgrade costs?
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bargepole wrote:

you are talking Canadian $ i assume ?
a look on e-bay shows a used 1000 KVA pad mount for $12,500 USD
a different auction for a 1,000 KVA notes the transformer cost $50,000 (USD) when new in 1993

i inflated a project 10% over quotes only to find that this year that materials plus labor put the project 15% over budget.
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