This paper analyzes the joint cost structure of electricity and natural gas distribution
investments. Assessing the joint costs is critical for urban development and public policy regarding
competition at the local level. The paper accounts for the urban and geographic factors at the local
level, while the previous literature primarily used company-level data with a few or no site-specific
variables in joint cost analyses. An empirical analysis of the multi-utility capital costs suggests that the
local urban and geographic conditions affect such costs, with economies of scope present in electricity
and natural gas both in terms of total costs and underground investment costs. Hence, the joint
service provision makes economic and environmental sense for urban policy makers.