Potomac Electric Power Company (Pepco) and Delmarva Power and Light have each presented Maryland state regulators with initiatives aimed at improving reliability (Case No. 9298).
Pepco Holdings (NYSE:POM) (PHI) filed on June 4 the short-term, five-year enhancement plans for its subsidiaries, as well as comments on the recommendations of the report of Gov. Martin O’Malley’s grid resiliency task force.
The enhancement plans build on the reliability enhancement plans (REP) that each company has had in place since 2010, PHI said, adding that the REP programs are underway and producing results. The short-term plans will not replace the REP programs but will be initiatives “above and beyond – or incremental” to those programs.
PHI also said that the Pepco Maryland construction budgets – including distribution, transmission and other assets – for 2012 and 2013 total $524.5m. The 2012 Pepco Maryland distribution annual expenditure was $181.8m and has been increased to $183.4m in 2013, for a total of $365.2m.
The Pepco five-year reliability construction plans have increased by $469m from the five-year plan starting 2011 to the five-year plan beginning in 2013. Pepco noted the increase in reliability planning in a chart showing: $328m from 2011 to 2015; $495m from 2012 to 2016 and $797m from 2013 to 2017.
The investment in the reliability plan includes replacement of infrastructure, identification of corrective actions for locations that are experiencing increased outages and long-term enhancements.
The total Delmarva Power construction budget for 2012 and 2013 is $351.4m. For 2012, the distribution component of Delmarva Power’s construction actual expenditure was $60.3m, PHI added, noting that the distribution budget increased to $72m in 2013 for a combined total of $132.3m for the two years.
The Delmarva Power five-year reliability construction plans increased by $95m from the five-year plan developed for 2011 to 2015 to the current five-year plan of 2013 to 2017.
PHI said for both companies that on average, customers have experienced fewer outages and better restoration times than in the past, adding that while there is still further progress to be made, the data show the REP is working.
Pepco is identifying a set of five projects that can increase the resiliency of the distribution system. Implementation of those initiatives is contingent upon state regulatory approval, along with approval for full and timely cost recovery. Those initiatives are:
- Increasing the number of certain feeders, which may include those that are affected by major events. This would accelerate the hardening of an additional 24 feeders over two years at a cost of $12m per year in capital investment. It would take two years – 2014 and 2015.
- Accelerating the four-year vegetation management scheduled clearance trimming cycle from four years in duration to three years. This would cost $17m in operations and maintenance (O&M) expense and would take place in one year – 2014.
- Undergrounding six distribution feeders that have been severely affected during major events. This would entail undergrounding six 13-kV distribution feeders at a cost of $151m and last three years – July 2014 through January 2016.
- Installing ACRs on 100 feeders over the next two years. This would cost $3m per year in capital investments and would occur in 2014 and 2015.
- Undergrounding portions of seven 69-kV sub-transmission lines that supply electricity to distribution substations and to critical Washington Suburban Sanitary Commission facilities. This would cost $254m in total investment and take three years – 2014, 2015 and 2016.
It is assumed that the state Public Service Commission (PSC) will not approve the company’s proposal on accelerated vegetation management work before 3Q13.
Delmarva Power is offering a set of three projects that can increase the resiliency of the distribution system:
- Increasing the number of feeders included in the priority feeder program. This will accelerate the hardening of an additional 10 feeders over two years – 2014 and 2015 – at a cost of $2.1m per year in capital investment.
- Accelerating the four-year vegetation management scheduled clearance trimming cycle from four years in duration to three years. This would cost $5.9m in O&M expense.
- Selectively undergrounding portions of feeders exhibiting historic reliability issues during major storm events. This would cost $5.1m per year, or $25.8m total, and last five years.
PHI noted that Pepco and Delmarva Power is each requesting a grid resiliency charge as part of its currently pending base rate cases that would provide cost recovery for those initiatives identified in Case Nos. 9311 and 9317, respectively.
Comments on governor’s task force
The filing included the companies’ comments on each of the 11 recommendations found in O’Malley’s task force’s report.
For instance, PHI said that the task force recommended requiring system-wide reliability standards for data including major outage events and suggested that this requirement will hold utilities accountable for restoration after major events. Specifically, the task force suggested limiting the number of days that are allowed for exclusion.
Pepco and Delmarva Power do not agree with that recommendation for two reasons, including that utilities may be driven to inefficiently allocate resources for storm restoration or even normal staffing to assure the ability to meet such a standard based on the demands of a small percentage of the days in any given year, thus driving up the cost of service to customers.
The companies do agree with the recommendation regarding enhancing the poorest performing feeder standard and have presented proposed programs aligned with that concept as part of each company’s currently pending base rate proceeding.
Among other things, PHI noted that the task force recommended that the PSC determine the cost of outages to different customer classes and to the Maryland economy in general to determine what level of investment in resiliency improvements is warranted.
The companies support the PSC’s efforts to evaluate the costs of outages to different customer classes, PHI said.