by Teresa Hansen
Much has been reported and written about U.S. electric utilities’ subpar grid infrastructure since Oct. 29, the day Hurricane Sandy moved ashore near Atlantic City. Damage from Superstorm Sandy was much worse than expected, and millions lost power.
Customers, politicians and regulators have said utilities need to improve and harden their infrastructures. Long Island Power Authority (LIPA) has been criticized by politicians, regulators and customers for its failure to respond after Sandy. The hurricane knocked out power to nearly all of LIPA’s 1.1 million customers, and some were without power for more than three weeks. This criticism led to the resignation of LIPA Chief Operating Officer Michael Hervey, the formation of a commission to investigate LIPA’s slow response and aged infrastructure, as well as a recommendation by New York Gov. Andrew Cuomo to replace the nonprofit municipal utility with a privately owned power company. The last recommendation is ironic because LIPA operates under the authority of the governor’s office, making Cuomo responsible for managing the utility.
I’ve read several articles and commentaries about LIPA and what the co-chair of the investigating commission calls its “fundamentally, dysfunctional management structure.” In addition to criticizing the utility’s management structure, the commission concluded LIPA’s outage system, much of which is composed of software and equipment from the 1980s, cannot keep up with storm-related outages and certainly not one as destructive as Sandy. In addition, the commission said LIPA poorly communicated with customers about restoration after the storm. Some of the opinion pieces said the utility might never regain customers’ trust. LIPA likely will be unable to repair its reputation under its current structure.
Much of the criticism and accusations aimed at LIPA during the past three months are warranted, but I feel the need to defend the utility, or at least shed some light on facts left out of most stories I’ve read.
Sandy damaged or destroyed more than 4,500 poles, 400 miles of electric line and 50 of the 185 substations in LIPA’s grid. Although many argue the utility should have done more to harden its grid and invest in smart grid technology, it would be expensive to harden a grid to the point that it could recover easily from such destruction. In addition, hardening and improving a 100-year-old grid in a densely populated area such as Long Island is not cheap.
LIPA was created more than 25 years ago as a nonprofit to acquire the Long Island Lighting Co.’s (LILCO’s) assets and securities after the fully constructed Shoreham Nuclear Power Plant was cancelled. It took on the debt associated with constructing an expensive nuclear power plant that never generated 1 MW of electricity or $1 of revenue. A second LIPA, a wholly owned subsidiary of the first, acquired LILCO’s transmission and distribution system in May 1998. LIPA, therefore, has been responsible for electricity delivery only 15 years–enough time to improve infrastructure, but when you consider the age of the infrastructure, it’s not long.
National Grid has been responsible for operating and maintaining LIPA’s electric grid for several years. More than a year ago, however, LIPA signed a 10-year contract with New Jersey-based Public Service Enterprise Group (PSEG) to take the reins from National Grid in 2014. LIPA customers and regulators expect PSEG to improve operation. Reports said 2.2 million PSEG electric customers lost power during Sandy, but its outage response was better than LIPA’s; it had 99 percent of its customers back on the grid four days before LIPA. Unless another intense storm hits Long Island, we might never know if PSEG can respond better to outages than National Grid, but at least the New Jersey utility has the special committee’s findings to improve upon. I suspect LIPA is one of many U.S. utilities unprepared for a disaster of Sandy’s magnitude. Most utilities have not been tested, and we should hope they won’t be. Many probably would not fare better than LIPA. Customers and utilities would benefit if regulators and politicians across the country could use this latest disruptive weather event to recognize they must work with utilities to identify and address infrastructure weaknesses and write policies and regulations that would allow utilities to recover costs associated with improving the grid. Chances are, utilities cannot make their infrastructures robust enough to withstand everything Mother Nature sends their way, but there is much need and room for improvement.
Teresa Hansen, editor in chief