How does the electric company pinpoint a problem in underground wiring?

Tom is right for the most part. For tracing the uf, as long as there is sufficient current, the electromagnetic field can be detected. If the current is insufficient, they may connect an FM signal generator (like a radio transmitter) to the cable and "listen" for the signal with a receiver. Last, if the problem is believed to be a short directly to earth, the short itself will produce radio frequency interference, like the noise a hair dryer would cause in old cordless phones.