I am having problems with my service and found the meter is bad. The power company stated that a replacement would be considered an upgrade and my 3 wire underground service would need to be dug up and replaced with 4 wire. Can I run a separate wore to upgrade the service or is the full replacement inevitable?

Huh?? This makes no sense.
There is NO such thing as a "4-wire" residential service.

Is this service fed from a remote main disconnect?
And what do you mean the meter is bad? Just the meter itself, or the meter pan?

Stan is absolutely correct. There is no 4 wire cable feeder from the transformer to the meter of a residence.

However, if you are talking about a secondary panelboard the connects to your main panelboard, then yes, a four wire cable is required. But the POCO is not responsible for this cable.

If the meter base is bad, you will intermittently lose power. Some times you can hear a clicking sound from the meter. This clicking sound is caused by the meter base prongs, expanding and contracting as they cool.

Yes, there is a main disconnect next to the meter. The meter pan is bad and I was told by the power company that before they would replace the pan, the wiring from there to my garage (seperate service from house) would have to be dug up and replaced with 4-wire. Really curious to find out if they are being a pain or if something else (add an additional wire) can be done to pass code requirements.

I take it this is not in conduit?
What is the distance between both buildings, and how many Amps?

IMO they cannot make you dig up, upgrade and replace a perfectly legal installation due to a repair.
I would fight this if it is going to be a $$ burden.

All this just to replace a meter pan? Sound fishy.

Almost 200 feet, not in conduit, but the power company says 4 wire is now code, no matter that it is separate service to a residential garage.

Consult with your local or state electrical inspector.

The utility may have a case here.

Only the inspector can either require the feeder to be changed, or allow it to remain, his/her call.

Thanks to everyone's response- hopefully I'll get a reasonable inspector this week.

Okay, now your question makes sense.

First, for your general information, the Power Utilities use an electrical code that only applies to them.

The rest of us use the National Electrical Code (NEC).

The Power Company is responsible for the delivery of power from their facilities to you. Beyond that, electrical services and practices become the property of the NEC.

I am not sure whether the code changed in 2005 or with the release of 2008.

What the power company is telling you is true, to a point and that point is outside of their control.

T.K. Russell is correct that the decision will be made by your State, County or Municipal Electrical Inspector.

Since you have a "Main Disconnect" located at the Meter, then under current definitions panelboards fed from the connection point are considered to be "Secondary" panelboards.

The NEC requires secondary panelboard to be fed by using a 4 wire connection, previously only a three wire cable was needed.

Now you are required (by the NEC) to use 2 Hot conductors, 1 Neutral conductor and an "Equipment Grounding Conductor"

So the statement by the Power Company while correct within the NEC, it is not within their jurisdiction to force you to run new cable to the secondary panelboards.

If the local electrical inspector (local jurisdiction) tells you that you need to replace the cable, the inspector would correctly enforcing the 2008 code.

Now, that said, there are some other variables such as whether your area has adopted the 2008 edition of code or the later 2011 edition of code.

If they are below the 2005 edition of the NEC (?) there may not be a cable change required for your area.

If they are below the 2005 edition of the NEC (?) there may not be a cable change required for your area.I don't care what the change is. THIS IS AN EXISTING INSTALLATION.

IMO the have no jurisdiction to make someone dig up the lateral to replace it just because of a meter pan replacement.
What if you refuse? Do they they refuse to connect you? What if there were a life safety issue?
This whole thing reeks of abuse of power!