Bloomberg News

Sandy’s Blackouts Pressure Utilities to Bury Power Lines

November 06, 2012

Sandy’s Blackouts Pressure Utilities to Bury Power Lines

Sandy knocked out power to more than 8.5 million homes and businesses across 21 states after making landfall Oct. 29. Photographer: Victor J. Blue/Bloomberg

Super storm Sandy’s record blackouts and prolonged recovery laid bare the U.S. electrical grid’s vulnerability to wind and flood, renewing calls for utilities to invest billions to toughen their defenses against extreme weather that may become more common.

European countries such as Germany, the Netherlands and the U.K. routinely bury cables that connect homes to power networks, protecting them from wind and ice. U.S. utilities have balked at moving more infrastructure below ground, saying consumers would object to spending as much as $2.1 million a mile, according to one industry estimate, to bury wires for a system that’s not fail-safe.

“There is no system that is bulletproof, whether you bury it, whether you put it up on poles, some force of nature can get you,” John Miksad, senior vice president for electric operations at New York-based Consolidated Edison (ED:US), owner of New York’s utility. “As powerful as we like to think we are, human designs do have their limitations.”

Still, consumers and lawmakers are again questioning whether utilities need to spend more to protect the grid as an approaching winter storm threatens to compound Sandy’s misery and devastation. Sandy knocked out power to more than 8.5 million homes and businesses across 21 states after landfall Oct. 29. About 1 million remain without power today, according to Bloomberg estimates based on utility websites.

A spate of extreme weather that started with Hurricane Irene in August 2011 “underscored that our country’s electrical grid is not terribly resilient to such events,” Daniel Aldrich, a Purdue University professor whose studies focus on disaster recovery efforts, said in an e-mail.

Exploring Underground

Dominion Resources Inc. (D:US) and Pepco Holdings Inc. (POM:US), which supply power in Maryland, Virginia and Washington, D.C., have been exploring whether to move underground segments of their power lines vulnerable to high winds. Maryland Governor Martin O’Malley and Washington Mayor Vincent Gray, both Democrats, called for burying more lines after gusts from a June storm, known as a derecho, knocked out power to as many as 4.3 million customers on the East Coast.

Exelon Corp. (EXC:US)’s Baltimore Gas and Electric Co. utility had already buried more than 60 percent of its system in recent decades and is stepping up tree-trimming to prevent storm devastation, Rob Gould, vice-president with the Baltimore-based utility said in a phone interview.

Getting Expensive

Irene, Sandy and an October 2011 snowstorm have been costly for New Jersey resident Lisa D’Aiuto, who spent $3,000 on a generator, $400 for gasoline to power it last week, and a total so far of 20 days without power. Frustrated by the cold, lack of running water and repeated blackouts in her rural community, D’Aiuto would rather spend her money helping build a storm-hardened electrical infrastructure.

“I don’t think people would mind paying more if there were more reliability,” said D’Aiuto, 44, who is still without power at her home in rural Franklin Township in Warren County, N.J.

A January report commissioned by Connecticut Governor Dannel Malloy following last year’s storms urged utilities to immediately consider burying some power lines in areas where higher reliability justifies the cost, particularly in city and town centers.

“I think we’re into a new normal with regards to weather,” said Gregg Edeson, a Los Angeles-based utility consultant with PA Consulting. “We need to rethink what we want to do with the infrastructure. At the end of the day, it’s going to cost some money.”

‘Cost Prohibitive’

At least eight state utility commissions including regulators in hurricane-prone Texas, Florida and North Carolina studied and ruled out burying all power lines as too cost-prohibitive, according to Washington, D.C.-based Edison Electric Institute, which represents publicly traded power companies. Virginia said a subterranean system would cost it more than $80 billion.

Moving power lines underground can cost as much as $2.1 million per mile in a city, with an average of $832,383 a mile in urban areas and $723,692 in suburban areas, according to a 2009 study conducted by the trade group. That compares with a maximum cost of $386,000 a mile for building an overhead line in a city with an average of $196,628.

Buried infrastructure isn’t impervious to threats. Underground power infrastructure in New Orleans was destroyed by Hurricane Katrina, said Glen Grabelsky, managing director for Fitch Inc. When underground systems do require repairs or maintenance, they’re more expensive than overhead lines and it can take even longer to restore power, he said.

Status Quo

“When you think of the hundreds of billions of dollars it would cost to underground the American infrastructure, and the trade-off you make between outages and duration of recovery, we think the current structure is probably the best,” Thomas Fanning, chairman and chief executive officer of Southern Co., said in a telephone interview yesterday.

Burying all the underground power lines in the northeast would be among the largest projects ever attempted by the utility industry and isn’t worth it, Stephanie Brand, director of the Division of the Rate Counsel, New Jersey’s official advocate for utility customers.

“It would be insane. It’s extremely expensive. If it’s a million dollars a mile, which is a figure I’ve heard, you’d have to have 50 of these storms before it would start to pay for itself,” Brand said in a telephone interview after a trip to the Jersey Shore to inspect property damage.

Burying Pieces

Lawmakers and regulators, instead, will probably push utilities to invest selectively to strengthen portions of their network that have failed repeatedly during recent storms, said Edeson, whose London-based consulting firm advises utilities on infrastructure investments.

Utilities can bury portions of main lines that are vulnerable to wind or tree damage, Edeson said, or place smaller lines underground that run to individual properties.

Other steps to reduce storm-related power losses include replacing wooden poles with concrete ones and adding devices that automatically redirect electricity to isolate portions of the circuit that fail, limiting the extent of blackouts, Edeson said.

Studying the question following several 2006 storms, Con Edison rejected burying all of its overhead electrical in Brooklyn, Queens, Staten Island, the Bronx and Westchester after pegging the total cost at $22 billion, Miksad said.

He wouldn’t rule out revisiting Con Ed’s network design after the most recent disaster, especially given that five of the worst six outages in the utility’s history have occurred since 2006.

“If the climate is changing and if we’re going to experience these kinds of events more frequently, that’s something that makes you step back and say, ‘Maybe we do need to change the design of the system,’” Miksad said. “My thinking and my colleagues around the country are all saying storms seem more intense and more frequent.”

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net


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Companies Mentioned

  • ED
    (Consolidated Edison Inc)
    • $56.17 USD
    • -0.44
    • -0.78%
  • D
    (Dominion Resources Inc/VA)
    • $69.5 USD
    • -0.48
    • -0.69%
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