Recent Outages Hurt Electric Utility Industry Image

Teresa Hansen   Teresa Hansen, Editor in Chief

The past few months have been unkind to the electric utility industry. Disruptive weather events, especially Hurricane Sandy, and a blackout during the Super Bowl have caused politicians, regulators, media and customers to question U.S. utilities’ ability to provide reliable service.

I’m writing this piece less than 24 hours after Super Bowl XLVII was played in the New Orleans Superdome. It’s unfortunate the 34-minute power outage shortly into the second half could be bigger news than the Ravens’ victory over the 49ers. One of many headlines I’ve seen in the past 24 hours reads “Blackouts are on the rise across the United States.” The article doesn’t include statistics or sources to back up the headline, but at this point facts are less important than perception: Electric utilities are failing to provide uninterrupted, reliable electricity.

As I write this, the outage’s cause hasn’t been determined. Power provider Entergy New Orleans is working with Superdome management to determine what happened. Nondisclosure of their findings, however, hasn’t kept the media from speculating likely causes. A report from CBS Interactive Inc. (CBS online news source) said Philip Allison, a communications specialist at Entergy, said the outage appeared to have been caused by failure of equipment maintained by stadium staff.

The Associated Press reported Superdome officials “warned just months before the Super Bowl that the venue’s electrical system could suffer a power outage and rushed to replace some of the equipment ahead of the big game.” The article doesn’t say who these officials warned, but who cares? Once again, perception trumps fact and the public relations damage has been done.

The outage is at best a black eye for Entergy, as well as reinforcement to many Americans’ belief that U.S. electric utilities are unreliable.

Utilities in the Northeast, especially Long Island Power Authority (LIPA), have been criticized heavily since Hurricane Sandy caused major damage to the grid in New Jersey and New York. The criticism led to the resignation of LIPA Chief Operating Officer Michael Hervey, as well as a recommendation by New York Gov. Andrew Cuomo to replace the nonprofit municipal utility with a privately owned power company. Never mind that the storm’s winds and surge were much worse than predicted, the consensus is utilities should have been better prepared and customers deserve better.

No matter the cause of power disruptions, utilities are being tried in the court of public opinion. Several articles in this issue deal with outage preparation, management and restoration, and we will continue to cover these topics in the months ahead. Regulations, technologies, customer expectations and utility image are some of the challenges we will address.

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