The beating our electrical infrastructure endured during Superstorm Sandy was severe. While the centralized power plants in affected regions survived relatively unscathed, the systems that connect to them did not. As millions of people lost heat and power, utilities were sent scrambling to triage thousands of miles of transmission and distribution (T&D) wires and the myriad poles, transformers, and substations that support them. Repairs have been slow and, ultimately, very costly. In the days following the storm it was not uncommon to drive past utility trucks and crews from Alabama, Ontario, and even Southern California, working side by side in areas surrounding New York City. Still, permanent repairs in regions of New Jersey will not occur for several more months.
The reality exposed by Sandy is that conventional, overhead T&D systems—and, more importantly, the communities they serve—are highly vulnerable to extreme weather events. In the coming months, regulators and utilities will be under increasing pressure to make strategic changes to the grid that will prevent long-term outages from recurring. For densely populated areas, this will be a very difficult task. Take, for example, Con Edison, whose electrical system powering New York City and its surrounding areas is arguably the most complicated and under demand in the world. Since Sandy dissipated, Con Edison has begun revisiting the possibility of burying prone system components underground in order to enhance grid reliability and resiliency. In 2006, the utility estimated this would cost roughly $1 million per mile to achieve, or $22 billion dollars to bury all of its high-risk exposed system components. Considering that New Yorkers already pay some of the highest electricity rates in the nation, new increases to fund this type of modernization are an unattractive, yet seemingly necessary option.
For Con Edison specifically, and most all other utilities generally, the need for resiliency is a sobering reality. So what can be done? For starters, there is little question that regulators and utilities will need to work together to find practical funding solutions. A great first step would be to rethink the current rate case–based funding practices, which all too often focus on short-term fixes rather than long-term solutions. Instead, there needs to be a more cooperative regulatory process involving regulators, utilities, and other intervenors. Additionally, the rate-making process needs to incentivize utilities to perform preventative system upgrades on a recurring basis in the context of a longer-term T&D planning process, rather than relying on protracted rate case proceedings that occur only every three to four years. Grid resiliency would benefit from a planning mechanism that facilitates the making of timely upgrades, instead of waiting until failures occur.
It is also important that funding for advanced smart grid technologies continues, as has been increasingly the case during the past five years. Self-healing technologies and advanced metering are already providing utilities with the ability to react and respond to system disruptions with rapidity. Moreover, state and federal policies geared toward achieving efficiency gains are a step in the right direction. Greater emphasis is needed on strategic policies that acknowledge that a kilowatt-hour saved is one less kilowatt-hour that needs to be generated, transmitted, and distributed. Nonetheless, the marketplace for energy efficiency goods and demand-side technologies is expanding rapidly.
Yet, perhaps the most important step that can be taken to bolster grid resiliency is to embrace the benefits of distributed generation (DG). An expansion of DG will continue to alleviate strains on the grid and help bolster resiliency by lessening the need for vulnerable T&D equipment. Less-mature DG technologies like fuel cells, microturbines, and high-density energy storage will likely see increased utilization as resiliency efforts ramp up, and the expansion of intermittent renewable energy sources such as photovoltaics with enhanced battery storage, most notably in the residential sector, will likely continue to provide predictable system benefits.
However, combined heat and power (CHP) systems appear to be the best DG option available for rapidly increasing grid resiliency. Aside from the dramatic efficiency gains and high power outputs these systems deliver, their small installation footprints and operational flexibility can provide significant options for system planners, especially in densely populated urban areas. Given the current and future forecasted price of natural gas, CHP adds the additional benefit of utilizing an abundant, cheap, and domestic fuel source. Interestingly, during and after Superstorm Sandy, pockets of New York City, like its large Co-op City neighborhood, never experienced the loss of electricity or heat due to the use of CHP.
As we continue to recover from Sandy, we must continue to plan for the future. There is little doubt that severe weather or possible national security threats will once again test the electrical grid’s ability to keep the lights on. It is crucial that we continue to modernize with resiliency in mind.
—John P. Cahill is counsel to Chadbourne & Parke LLP and is former commissioner of the New York State Department of Environmental Conservation and former chief of staff to New York State Governor George E. Pataki.
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