It appears that you are referring to bundled conductors (IEEE Std 100 "Dictionary"). An individual conductor of a conductor bundle is called a subconductor. This is used frequently on shipboards instead of segregated or nonsegregated buses. Such installation withstands higher shocks than busbar buses. There are some disadvantages to this when it comes to capacitive charging currents and high-resistance grounded neutral system. The Utility may have a point since the 7 subconductor bundle  will cause the service or line to be more available / reliable. It will probably be more expensive to you but the high power supply availability may be preferred; especially, if any downtime is costly. What is the requested size of a subconductor?

The "subconductors" were each 500kcmil.

thanks for the info.  I guess the utility answer was accurate after all.  They also noted a limitation of 25 ft and that conduits had to be PVC so that inductive heating affects would be minimized.  Special consultation had to be provided for longer runs.