Outages prompt lawsuits, dismissals at major utilities

Michael T. Burr

Managing Editor

A day care center received a phone call from the building superintendent, advi- sing the center that within minutes the building`s electricity would be cut off. No estimate was given for the length of the blackout. Facing the prospect of several dozen frightened children stuck inside unlit, unventilated rooms, the administrator and staff herded the kids out onto a strip of lawn separating the building from Chicago traffic. There they waited until their parents could pick them up.

Such events are the stuff of nightmares for distribution system managers (not to mention day care providers). This particular nightmare came true for Commonwealth Edison (ComEd) on August 12, when two failing 69 kV cables, a transformer out for maintenance, and a freak transformer blowout combined to cause blackouts lasting up to 11 hours for parts of Chicago`s densely populated Loop. The outages affected about 2,300 customers-including several major banks and the Chicago Board of Trade-and cost an estimated $100 million in lost business for local companies.

It was not the first outage of the summer for ComEd. During a heat wave just two weeks before, 60,000 customers were without power for two days. After August 12, ComEd began seriously questioning its own transmission and distribution (T&D) operations.

“It`s not apparent that we have kept up with all of the preventive maintenance we could have been doing-inspections, monitoring, calibrations,” acknowledged David Helwig, ComEd`s acting senior vice president of T&D, in an interview with EL&P.

ComEd was not the only utility to find itself in the hot seat this summer. Consolidated Edison Company of New York and Entergy Corp. in New Orleans both experienced major outages in July, prompting lawsuits, complaints to state regulators, or both. Also, Cinergy Corp. defaulted on wholesale power supply obligations in July, pointing to transmission constraints as the culprit.

These events raise questions about the electric utility industry`s reliability at a time of changing market structures and rising power quality needs.

“Outages now cost U.S. businesses $50 billion a year, and that figure is increasing at an exponential rate,” said Karl Stahlkopf, president and CEO of EPRI Solutions in Palo Alto, Calif. “The use of semiconductors in every sector of the economy has resulted in unprecedented power quality demands. The levels of reliability the system was designed to achieve in the 1950s and 1960s did not account for this. The whole power delivery system needs to change.”

Neglected equipment

Chicago Mayor Richard Daley would probably agree with Stahlkopf. A longtime critic of ComEd, Daley chastised the utility in more strident terms than ever after the August 12 outages, saying “we are sick and tired of them, and they had better change.”

The mayor vowed to bill ComEd for the cost of the city`s emergency response during the outages, raising the specter of legal liability. ComEd`s operations are being scrutinized for possible legal actions by the Cook County Attorney`s office and the Illinois Commerce Commission (ICC). Consumer watchdog group Citizens Utility Board (CUB) called for the ICC to levy fines against ComEd.

Early in the crisis ComEd responded to the pressure by asking for, and receiving, the resignation of Paul D. McCoy-who was just promoted at the end of July to the position of president of T&D.

Whether McCoy, a 27-year ComEd veteran, was dismissed for his performance or for political reasons is a matter for debate. Clearly something at ComEd needed changing; the utility has ranked dead last for five years in a row among the country`s 21 largest utilities in a customer satisfaction survey conducted by the Michigan University Business School.

In an August 15 Chicago Tribune story, Howard Learner, executive director of the Environmental Law & Policy Center (and formerly CUB founding president) attributed the company`s woes to “the legacy of ComEd`s underinvestment for many years in the basic maintenance and improvements in the distribution system.”

Infrastructure spending has long been a bone of contention between ComEd and the City of Chicago. As part of a franchise agreement in March, the utility committed to spend $1.185 on infrastructure maintenance and improvements over a three-year period.

Learner and others have argued that ComEd poured money into its nuclear program-long a source of controversy and headaches for ComEd-and short-changed its transmission and distribution (T&D) business.

“Personally I don`t subscribe to that theory,” Helwig said. “I believe more-than- ample resources have been and continue to be provided. It`s just a matter of effective use of those resources.”

At press time, ComEd was halfway through what Helwig called a “stem-to-stern review” of its distribution system condition and its overall policies and procedures. More than 700 employees fanned out in teams to complete inspections and evaluate the condition of all ComEd`s 888 substations and underground facilities in 1,300 manholes. “In every case we did find some items that needed to be dealt with as a matter of priority, and we`ve identified other work that is being prioritized and scheduled,” Helwig said.

The situation reached its current crisis point because ComEd`s “historic maintenance practices fell into disuse,” according to Helwig. “There was not the rigor in place to make sure they were accomplished, and in some cases records were fairly poor. The apparent condition of some of our equipment indicates that it`s been neglected a bit. The size of our backlogs of corrective maintenance and preventive maintenance work also indicates that we haven`t been keeping up.”

In parallel with the physical evaluation, seven teams of consultants and technical advisors from the Electric Power Research Institute (EPRI) began a thorough review of “all aspects of our program,” Helwig said. “By that I mean how we are organized, how our business processes work, and the technical adequacy of our program.”

An expert panel, comprised of Helwig, EPRI`s Stalkopf, Lee Willis of ABB, Tom Garrity of General Electric and John Kenny of Kenny Construction, heard a mid-course report on the review in late August. A report on the review`s findings is expected by September 15.

Reliability as a weapon

Despite incidents like those described above, the U.S. electric power system remains among the world`s most reliable and efficient. With changing market structures

and consumer standards, however, reliability and power quality are commanding an increasing amount of utilities` attention.

“Utilities are genuinely concerned to maintain reliability levels equal to or better than they have now,” said Ron Willoughby, manager of systems engineering for Cooper Power Systems in Franksville, Wis. “It`s a universal concern, so people recognize that the reliability picture might change if adequate attention is not paid to it.”

Firms like Cooper Power Systems and EPRI Solutions are providing help with reliability centered maintenance, predictive reliability analysis and root cause analysis programs.

“Now that you can more economically obtain data, you can more easily and cheaply do analysis and measurement of the system,” said Bob Owen, director of Cooper Power Systems` Thomas A. Edison Technical Center. “If reliability becomes an important competitive weapon for the utility, the ability to quantify and predict reliability will help to level the playing field. All customers will know where they stand.”

This will solidify the connection between the reliability of a utility`s distribution system and customers` willingness to stick with that utility for power supply and other services. ComEd, for one, has seen this point driven painfully home. “(Customer choice) creates a new imperative for utilities like ComEd,” Helwig said, “to make sure their distribution systems are meeting customers` needs.”

Editor`s note: Pam Boschee, news editor, provided research assistance for this story. Background information was provided by Tom Meinz of Wisconsin Public Service Co. and Harry Terhune of the Mid-American Interconnected Network.

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