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Consultant Cindy Miller LLC

Cindy Miller served for 30 years in a range of positions at the Florida Public Service Commission.  These included Associate General Counsel and head of the Commission's External Affairs...

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A Florida Case Study on Hardening of the Grid

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A Florida Case Study on Hardening of the Grid

  • By Cindy Miller and Brian Treby

 

In this synopsis, we look at the progress Florida made to harden the electric grid.  Florida’s changes are in response to some intense hurricanes.  We believe these steps may be useful to other states facing issues with major storms. 

Updating plans more regularly is a key aspect of Florida’s approach, but we believe the steps en toto may be useful to other communities hardening for major storms.

In July 2018, the Florida Public Service Commission (the “Commission”)  released its “Review of Florida’s Electric Utility Hurricane Preparedness and Restoration Actions,” which recounts Florida’s historic and methodical improvement of the adequacy and reliability of the state’s electric transmission and distribution grids.  To strengthen Florida’s electric infrastructure and to reduce the frequency and length of outages following particularly active and intense 2004 and 2005 hurricane seasons, the Commission adopted extensive storm hardening initiatives. Wooden pole inspection and replacement and vegetative remediation programs were flagged and investor-owned electric utilities (IOUs) were ordered  to file updated storm hardening plans for Commission review every three years.

These initiatives and the utilities’ hardening plans have been the roadmap for aggressively improving resilience during the past decade or two.  After the 2004-2005 season,  there were no major storm landfalls in Florida until the four hurricanes of 2016-2017, making those storm seasons an ideal opportunity to gather performance data.

The utilities suggested improvements such as targeted undergrounding projects for certain lateral circuits and additional coordination and communication regarding vegetation outside of the utilities’ rights of way.  Non-utility stakeholders, including local governments, suggested increased coordination and more utility staffing at local Emergency Operations Centers (EOCs).

Key Findings:

  • Florida’s aggressive storm hardening program is working..
  • Length of outages was reduced markedly.
  • Hardened overhead distribution facilities performed better than non-hardened facilities.
  • Very few transmission structure failures were reported..
  • Underground facilities performed much better compared to overhead facilities.
  • Customer expectations were found to have risen and thus resilience and restoration will have to continually improve.
  • Power outages were primarily caused by sources outside the utilities’ rights of way and included falling trees, displaced vegetation and other debris.
  • Utilities reported that vegetation management outside their rights of way was typically not performed due to lack of legal access.
  • In some instances following Hurricane Irma,  early assessments were optimistic and estimates of restoration time proved inaccurate.
  • Consumer communication systems were overwhelmed.
  • Some local governments stated a need for better coordination and communication with utilities during and after storms.

Commission Actions:

THE 2018 ORDER.  The Commission directed staff to open storm hardening plan  review dockets for all 5 investor-owned utilities (IOUs) and begin collecting additional details related to:

  • Meetings with local governments regarding vegetation management and the identification of critical facilities;     
  • Review of utility staffing practices at local emergency operations centers;
  • Planned responses to roadway congestion, motor fuel availability and lodging accommodation issues;
  • Alternatives considered before selecting a particular storm hardening project;
  • Collection of more uniform performance data for hardened versus nonhardened and underground facilities, including sampling data where appropriate;
  • Impact of non-electric utility poles on storm recovery;
  • Targeted undergrounding projects of FPL and Duke Energy Florida as part of the staff’s annual distribution reliability review.

Staff was directed to initiate a management audit to examine the procedures and processes used by IOUs to:

  • Estimate and disseminate outage restoration times following a major storm;
  • Inspect and schedule maintenance on transmission structures.

The Commission also identified several issues that the Legislature may consider, such as a revision of management policies to improve the ability of electric utilities to conduct vegetation management outside of rights of way to reduce outages and restoration costs; possible legislation to require inspection and hardening of non-electric utility poles; enhanced statewide public education regarding tree trimming; implementation of emergency procedures regarding roadway congestion, motor fuel availability, and lodging for mutual aid personnel. 

 

 THE 2006 ORDER.  Back in 2006, the Commission had ordered IOUs to inspect wooden poles every eight years to assure weakened ones were replaced, and to implement 10 storm preparedness initiatives:

  • Three-year Vegetation Management Cycle for Distribution Circuits;
  • Audit of Joint Use Attachment Agreements (shared use of poles with telecom);
  • Six-year Transmission Structure Inspection Program;
  • Hardening of Existing Transmission Structures;
  • Development of Transmission and Distribution Geographic Information System;
  • Collection of Post-Storm Data and Forensic Analysis;
  • Collection of Detailed Outage Data Differentiating Between the Reliability Performance of Overhead and Underground Systems;
  • Increased Utility Coordination with Local Governments;
  • Collaborative Research on Effects of Hurricane Winds and Storm Surge;
  • Development of Natural Disaster Preparedness and Recovery Program.

 

Review of Outage Restoration Activities

Restoration Process

This is a year-round activity.  Many utilities across Florida engage in exercises that simulate storms in order to better prepare for an actual hurricane or other significant weather event.

Before a storm makes landfall, an assessment of potential damage is completed by utilities based on the forecasted path of the storm.  This information can be used to determine if mutual aid and additional material resources should be requested. 

As the storm approaches, repair activities will continue until winds reach 35-40 miles per hour, at which time crews will be called back for a stand-down period.  Once winds drop below 35-40 miles per hour and weather conditions are considered to be safe following a storm, utility crews are re-deployed to continue the restoration process.

Once the storm has passed, a post-storm damage assessment is completed, where utilities can establish what facilities have been damaged, refine restoration time estimates, manage workloads, and allocate resources to where they are needed.  Substations and feeders that provide critical infrastructure are prioritized first in order to get those necessary facilities back in service.

Feeders that serve the largest number of customers are restored next, and finally laterals that serve neighborhoods with fewer customers are repaired and restored.  Overall, utilities strive to restore as many customers as possible in the shortest amount of time.

 

Outage Causes

Data collected from 39 utilities identified that the biggest source of outages was vegetative debris.  Many utilities described that these issues were from fallen trees or branches that were outside of the utilities’ rights of way where utilities typically do not have a legal access to perform vegetation management.

According to the Commission report, proactive tree trimming has been a key initiative of the Commission and the results of the review indicate that vegetation continues to be a primary cause of damage and outages. 

 

Mutual Aid

Many mutual aid agreements among IOUs throughout the country are managed by seven Regional Mutual Assistance Groups (RMAGs).  Florida’s IOUs are members of the Southeastern Electric Exchange RMAG.  RMAGs facilitate the process of identifying available restoration workers and help coordinate the logistics to help with restoration efforts. 

IOUs that are in RMAGs follow guidelines established by the Edison Electric Institute (EEI) and also establish additional guidelines that aid in the communication process and rapid mobilization and response efforts.  EEI also communicates regularly with the associations that serve municipals and cooperatives during major outage incidents.

The American Public Power Association (APPA) together with state and regional public power utilities and organizations, coordinate the mutual aid network for the nation’s public power utilities.

Section 252.40, Fla. Stats, Mutual Aid Arrangements, authorizes the governing body of each political subdivision of the state “to develop and enter into mutual aid agreements within the state for reciprocal emergency aid and assistance in case of emergencies too extensive to be dealt with unassisted.”  Mutual aid plays a key role in restoring the power quickly.

 

Storm Restoration Cost Recovery

Prior to the 2019 legislative action, storm hardening costs incurred to make the system less vulnerable, were covered by the base rates the utility is authorized to charge.  Storm restoration costs, incurred in response to a specific storm, are addressed differently and not covered by base rates.

Following Hurricane Andrew in 1992, the Commission took a three-part approach:

  • A storm damage reserve;
  • An annual storm accrual;
  • A provision to seek recovery of costs that exceed the storm damage reserve balance.

Under the three-part system, cost recovery of storm related damage is typically addressed through a storm damage reserve, a surcharge, or a combination of the two. 

In defining what type of costs can be recovered, the Commission adopted Rule 25-6.0143, Fla. Admin. Code, which specifies that only incremental costs – those above the normal costs that are covered by rates – can be charged to the storm reserve or recovered in a storm cost recovery proceeding.  The largest incremental storm cost categories typically include repair materials, added payroll/overtime, contracted crews, travel, housing and food.

In the event that the storm reserve is depleted from a major storm or multiple storms, or if a utility does not have a storm reserve, an IOU could request an interim storm surcharge be added to the customer rates for a specific period based on an estimate, pending a thorough accounting.  Upon request by the IOU, the Commission docketed the matter for a formal process to determine actual eligible costs when they are available.

Revenues collected with the interim storm charge are compared to the total costs of storm restoration.  The total costs include only those that are determined eligible.  Expenses that exceed what the interim charge generated are recovered in rates, and those that fall short of the interim charge revenues are flowed back to customers. 

The utilities reported on their storm hardening performance.  These were labelled forensic analysis reports. 

 

Customer Communication

The Commission report states that communication issues were a notable source of customer dissatisfaction during Hurricane Irma.  Customers particularly complained of inaccurate restoration projections and unavailability of overwhelmed utility websites and apps. 

The Commission opened a customer portal on its website, allowing customers to submit comments regarding their reaction to utility restoration/communication efforts.  The most prevalent topics discussed in customer comments were:  support and encouragement of solar, cost responsibility for restoration, frustration with timely communications, tree trimming, and effectiveness of hardening.

The Commission also sought comments from non-utility stakeholders, which included Associated Industries of Florida, the Florida Chamber of Commerce, the Florida Association of Counties and the Florida League of Cities.  The comments addressed vegetation management, undergrounding, and coordination and communications. 

Regarding vegetation management, the comments focused on improving communication between stakeholders and utilities on where and when tree trimming occurs, as well as better educating the public on tree trimming.  While the comments on undergrounding varied, many voiced a positive position on undergrounding, although there were differences in opinion on cost responsibility.  Lastly, the comments on coordination and communication largely concentrated on more involvement from utilities at local Emergency Operations Centers, in addition to improving post-event information and power restoration time estimates.

Commission Future Actions

At the conclusion of the 2018 report, the Commission set out certain actions relating to review of utilities’ vegetation management, identification of critical facilities and the staffing practices at the Emergency Operations Centers.  Also, staff were advised to collect more data and seek more information on matters of underground facilities and more.

Legislative Actions

We should note that the Florida Legislature has also taken steps to address the storm recovery issues.  For example, in 2005, the Legislature enacted Sec. 366.8260, Fla. Stats., on storm recovery financing.

In 2019, the Legislature enacted Sec. 366.96, Fla. Stats, on storm protection plan cost recovery.  It provides that it is in the state’s interest to strengthen electric utility infrastructure to withstand extreme weather conditions by promoting the overhead hardening of transmission and distribution facilities, the undergrounding of certain electrical distribution lines, and vegetation management. 

Each public utility must file a transmission and distribution storm protection plan that covers the immediate 10-year planning period.  Each plan must explain the systematic approach the utility will follow to achieve the objectives of reducing restoration costs and outage times associated with extreme weather events and enhancing reliability. 

The Commission reviews each transmission and distribution storm protection plan and considers certain criteria.  No later than 180 days after a utility files a storm protection plan, the commission must determine whether it is in the public interest to approve, approve with modification, or deny the plan. 

At least every 3 years after approval of a utility’s plan, the utility must file for commission review an updated transmission and distribution storm protection plan. The commission must conduct an annual proceeding to determine the utility’s prudently incurred transmission and distribution protection plan costs and allow the utility to recover such costs through a separate charge apart from its base rates, to be referred to as the storm protection plan cost recovery clause. 

The Commission is also required to submit a report to the Governor, the Senate President and the Speaker of the House of Representatives on the status of utilities’ storm protection activities.

 

Conclusion

In conclusion, we believe the Florida Public Service Commission and the Florida Legislature took actions that might be helpful to other regulators as climate change increases uncertainty, unpredictability, frequency and intensity of storms.

To better prepare the grid for intense storms, the Commission recognized the problem, requested input from stakeholders, directed staff to open dockets on several initiatives, and emphasized that communication was paramount.

In a future article, we will explore additional steps that might be taken for resilience.

 

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Paul Alvarez's picture
Paul Alvarez on Apr 22, 2021

While there's certainly nothing wrong with preparing for hurricanes, as with most initiatives, there's a right way and a wrong way.  There are cost-effective steps to take, and steps that are not so cost-effective.  Some steps make progress towards the future, providing for technology development and participation in growing industries in which Florida could be a global leader.  Other steps do not.

I recently co-authored, with my Wired Group colleague Dennis Stephens, a paper (link here) that examines the initial Storm Protection Plans offered by the Florida investor-owned utilities.  Our analysis indicates that Plan dollars are focused in largest part on undergrounding residential lateral lines -- an approach which is not cost-effective, at a cost of tens of thousands of dollars per household.  Including utility profits and other carrying charges, we estimate that Florida customers will pay over $40 billion in the next 30 years for these Plans, which will underground the lines serving just 4-5% of Florida customers.  Our analysis also identifies deficiencies in each of the plans that violate the Commission's own rules (25-6.030) regarding such plans, though the Plans were approved nonetheless.    

Perhaps worse, we note that the Plans do nothing to help customers or communities develop some measure of independence from the grid in emergency situations, such as solar plus storage.  Of course the challenge for utility shareholders with such initiatives is that they help customers and communities become more independent of the utilities in non-emergency situations too.  Such independence reduces utility sales volumes and the need for utility investments to accommodate increasing electric demand from Florida's growing population.  Both are anathema for shareholders.

I encourage other state legislatures and utility regulators, before emulating Florida's path, to fully understand investor-owned utilities' motivations, and the role legislatures, regulators, and stakeholders play in striking the right balance between those motivations and customers' interests.  Failure to strike the right balance harms, not helps, state economies.  In Florida, the Storm Protection Plan legislation, related Commission actions, and utility Plans all indicate the playing field is tilted dramatically in the utilities' favor.  If I were a Florida voter, I would vote those legislators who place shareholder interests ahead of customer and community interests out of office.   

Respectfully, Paul Alvarez, President, Wired Group

Cindy Miller's picture
Cindy Miller on Apr 22, 2021

Paul, I greatly appreciate this dialogue.  You have raised excellent points.  I know that the Florida Office of Public Counsel had also raised concerns in a proceeding at the Commission.  My thought is that the hardening initiative will continue to receive deserved scrutiny.  I may have put too positive a slant on the effort.  However, I do think that tackling it through a multi-prong approach listed in the Florida Commission report, "Review of Florida's Electric Utility Hurricane Preparedness and Restoration Actions 2018," was impressive.  I understand what you are saying about the concerns over costs for the new undergrounding.  It seems the vegetation management piece was quite important.  Again, thank you for weighing in.  I will continue to review the efforts as well.

Paul Alvarez's picture
Paul Alvarez on Apr 23, 2021

Thanks for not getting defensive Cindy, sorry if I came across a little harsh. I recommend everyone read the paper for more information. But I have yet to see even one example of legislative involvement in utility issues working out well for customers. Whether it's new nuclear in SC or GA (and a few years ago, in FL), undergrounding in VA, grid modernization in Illinois, Indiana, and Missouri, or nuclear bailouts in Ohio (and Illinois), there are many examples of bad legislation undermining commission authority and oversight to customer detriment. My message is that legislators should stay out of utility issues, and let Commissions and Commissioners do their jobs. I think everyone can agree with that!

Cindy Miller's picture
Cindy Miller on Apr 25, 2021

Thanks so much, Paul.  Our article was originally only focused on the steps taken by the Florida Commission.  I added the 2019 legislation because it altered some of the earlier proceedings instituted by the Commission.  I do agree Commissions are generally better suited for the tasks at hand!

 

 

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