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1) If the existing underground cable was 4 AWG copper, that conductor size is rated for a 100 amp service.
2) If the new cable is 1 AWG copper, the utility most likely increased the cable size in the event a homeowner needs to upgrade the service from 100 to 150 amps. It is very common that the service lateral conductors are often increased by a minimum of 1 cable size larger than required in order to accommodate a larger amp service to the customer premise.
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I guess that you can predict that a homeowner will never upgrade a hot water heater to an electric tankless hot water heater that typically requires a dedicated/minimum 50 amp circuit and often more amps depending upon the water heater kW size? If this occurs, a typical 100 amp service can easily be overloaded.
If such an upgrade is installed in the future, a 100 amp service to the home via 4 AWG copper will not be able to support the existing loads along with a higher kW load from the electric H2O heater for example.
I recommend that you contact your local Public Utility Commission and utility and ask them the reason why they are increasing the feeder size? I'm sure they will provide you with a similar answer as mine......ie.......it is called being prepared for the future if a customer requires a service upgrade. 3/0 AWG Aluminum is rated for a maximum of 175 amps while 3/0 AWG copper is rated for a maximum of 225 amps.
Sorry that I did not provide you with the answer you were looking for. I will opt out of the question and place it back to the open board. Perhaps another electrical expert here can provide you with the answer that you are looking for.
Assist to Kevin.
The utility is the Authority Having Jurisdiction. They are the one spring the size of wiring on their distribution. After the meter you then have code requirements by CES. You only need to comply not complain.