Insulation is expensive. Furthermore, with AC you have to worry about the impedance of whatever you use as insulation. Basically the whole wire starts to act as a big capacitor, leaching power. (1)
I found some cost estimates: "The estimated cost for constructing underground transmission lines ranges from 4 to 14 times more expensive than overhead lines of the same voltage and same distance. A typical new 69 kV overhead single-circuit transmission line costs approximately $285,000 per mile as opposed to $1.5 million per mile for a new 69 kV underground line (without the terminals). A new 138 kV overhead line costs approximately $390,000 per mile as opposed to $2 million per mile for underground (without the terminals)." (2, page 17) Also, diagnosing and correcting faults is much easier above the ground than under, and you'd be surprised how often jackasses with backhoes take out underground infrastructure.
I found some cost estimates: "The estimated cost for constructing underground transmission lines ranges from 4 to 14 times more expensive than overhead lines of the same voltage and same distance. A typical new 69 kV overhead single-circuit transmission line costs approximately $285,000 per mile as opposed to $1.5 million per mile for a new 69 kV underground line (without the terminals). A new 138 kV overhead line costs approximately $390,000 per mile as opposed to $2 million per mile for underground (without the terminals)." (2, page 17) Also, diagnosing and correcting faults is much easier above the ground than under, and you'd be surprised how often jackasses with backhoes take out underground infrastructure.
[1] https://en.wikipedia.org/wiki/Characteristic_impedance
[2] https://psc.wi.gov/Documents/Under%20Ground%20Transmission.p...