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Due to construction of a highway in the eastern part of Croatia, a nesurge arrestersw 110/x kV substation was built with two parallel connecting underground cables. Cables were connected to already existing 110 kV overhead lines. At the place where the transition between overhead lines and cables is made, surge arresters were installed. In this paper lightning stroke at the grounding wire on the overhead line and its impact on underground cables were studied. Transient program Electromagnetic Transients Program (ATP-EMTP) is used to create a model of the system and to perform simulation of the transient process during lightning stroke. The results of the simulation are briefly presented and discussed in the paper.