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Since 1976, Finland has been engaged in the development of covered conductors. They are commonly used these days, also, in other countries such as Great Britain, Poland, Slovakia, Norway, the Baltic states as well as Czech Republic. This system was mainly designed to improve the reliability of power supplies. The covered conductor system (hereinafter referred to as the "CC system") makes it possible to construct electricity networks with a low failure frequency. The CC system does not differ from the bare conductor system. There is a significant difference in the reduction of distance between the phases to approximately 1/3 compared to distance between the phases usual for bare conductors. This distance is reduced to 40 cm and 50 cm in Finland and in the Czech Republic, respectively. The covered conductors are simply fastened to insulators for relevant voltage. It is not currently possible to detect the fault of conductor drop through the covered conductors, conductor and water level contact, and/or breaking of the conductor and its subsequent drop to the ground. Since this is not standard ground connection, the current digital protections are not able to detect such a type of faults. The selected conclusions of the analysis of operating and fault conditions of covered conductors are presented within the paper.