A brief scan of the Internet will disclose numerous articles and studies reflecting the time-honored notion that overhead electric utilities are far more economical than underground installations. Articles abound from the Edison Electric Institute, RAM Utilities, SCE&G, FPL, New Hampshire Public Utilities, and others. More than one makes reference to the study conducted in 2003 by the North Carolina Public Staff Utility Commission.1
They published a report highlighting the excessive costs associated with converting existing overhead lines to underground services. The report stated their:
...investigation consisted of (1) comparing the operational advantages and disadvantages of overhead and underground power distribution systems; (2) estimating and comparing the capital costs of converting overhead lines to underground, along with the differences in operation and maintenance (O&M) costs for the two types of systems; (3) estimating the time and human resources required to bury underground lines; (4) identifying potential additional costs to customers, municipalities, and other utilities that may result from conversion; and (5) exploring options for financing conversion projects.The Public Staff determined that "replacing the existing overhead distribution lines of the Utilities with underground lines would cost approximately $41 billion, nearly six times the net book value of the Utilities' current distribution assets, and would require approximately 25 years to complete." They went on to show that individual customer rates would increase more than 125% to accommodate such an undertaking, including "the higher O&M costs associated with direct-buried underground systems, particularly in urban areas, where underground conductors are four times more costly to maintain than overhead facilities." Other studies reflect essentially the same findings on the economy associated with overhead vs. underground electric utilities. And, most agree on the pro's and con's associated with both approaches. An interesting dichotomy is the increased reliability of underground utilities vs. their higher repair times.
For other parts of the transmission infrastructure, the following estimates were given on the relative expense of underground vs. overhead installations:
Instances of natural disasters tend to resurface the discussion regarding overhead vs. underground electric utilities, stemmed in part by the extended repair times, the recurring costs for each disaster, and the disruption to society and business.
What I noticed about all of these studies was that they limited their analysis to costs directly related to underground vs. overhead installation, related maintenance, and the potential rate impact on consumers. What I did not find was information related to the other costs associated underground vs. overhead electric utilities -- specifically the financial impact to society (people and businesses) as a result of power outages. There are studies that evaluate this "societal cost", but they stop short of merging with the cost analyses conducted by the utility industry.
So, it raises the question -- what magnitude of societal costs would have been offset were underground installations commenced 15 years ago?
Societal impact can be viewed in a variety of ways, but we shall limit our brief overview to the people and financial impacts.
While there have been countless outages over the years, the following table represents the largest in terms of the number of people affected by an outage.
Largest Power Outages3
As mentioned at the beginning of this article, we are in an excellent position to take advantage of a convergence that is occurring which could yield a number of benefits.
Aging Grid Infrastructure
Upgrading our electric utility infrastructure should be an integral part of the initiative to upgrade our national infrastructure. While roads, the FAA's new ADS-B ground-based stations, water, waste-water, natural gas, and electric utilities are all different infrastructure issues, their upgrade should be coordinated together as part of a holistic approach to the national infrastructure upgrade initiative. As many studies have recommended, this would also provide an excellent opportunity to evaluate high risk locations for the installation of underground electric utilities.
Most would agree that it is impossible to foil the efforts of a determined terrorist or computer hacker. Nonetheless, efforts can be undertaken to thwart the majority of those seeking to interrupt our national grid both electronically and through the physical destruction of equipment. Incorporating these enhancements into the new infrastructure design is timely and required. While cyber-security is a portion of the Smart Grid effort, it does not take into account the physical security benefits associated with underground electric utilities nor the protection of overhead structures.
Meteorological & Subterranean Predictions
We can't do very much to ameliorate the impact of weather or ground tremors. However, having continually better models for predicting metrological and earthquake events gives us an upper-hand in adapting our regional utility design upgrades to optimize the best technology approach during this design phase. Being able to statistically predict high risk locations and events can be factored into our design methodology. Damage-causing metrological events occur with greater frequency than earthquake-related damage, thus giving greater weight to the benefits of underground installations. And, whether you believe in global warming or not, most weather forecasters agree that the frequency and severity of future storms will be greater than in the past -- thus, more repair and replacement costs associated with overhead utilities.
Economic, Safety, and Quality-of-life Issues
As the data above intimates, the cost associated with any power outage is far greater than just the repair/replacement costs of the affected utility equipment. Factoring in the type of social and business infrastructure within a region should also be incorporated into our future design effort to mitigate future societal costs related to power outages. Part of the design effort should be to advise primary regional industries on the use of alternative energy systems, including the use of UPS equipment. The Smart Grid initiative stops short of this by only inquiring as to consumers' willingness to avail themselves of technology innovations brought about by the Smart Grid. I am advocating a more proactive approach by forming a partnership with our major commercial customers.
Renewable Energy Technology & Micro-Grids
While some utilities have embraced the incorporation of renewable energy, others have been dragging their feet for fear it will negate the level of revenue associated with legacy generation facilities. While profits do make the world go round, the importance of upgrading our national infrastructure and the ideal opportunity we now have for accomplishing the same should outweigh NIMBY attitudes. Solar, wind, geothermal and other proven technologies have an important role in ensuring reliable and secure access to electric power generation. The magnitude of that contribution and possible installation locations should be a part of the new infrastructure design to ensure adequate transmission capacity. The Smart Grid initiative looks at a portion of this through activities that take into account large-scale renewable energy systems; although there is little focus on smaller scale distributed generation and micro-grids. Rather than let developers decide where large-scale wind, solar, and geothermal energy systems will be built, why not have the locations of such facilities be pre-determined as a part of overall national infrastructure design? In so doing, the pre-determined locations and maximum potential energy capacity of each can be factored into the design so that the new utility infrastructure can accommodate this future growth.
Growing Momentum of Interest
From a top-level perspective, the upgrade of the national infrastructure will make use of federal monies to help facilitate the initiative. While the American Recovery and Reinvestment Act of 2009 provided U.S. DOE with $4.5BIL to fund the Smart Grid initiative, this is primarily a utility system design and beta test program. Future infrastructure system funding will aid in mitigating the costs associated with underground utility construction -- funds that would not normally be available during a routine upgrade effort.
An Accumulation of Benefits
Having a unified approach to national infrastructure design, of which utilities is a part, provides a number of shared benefits:
In a word -- no.
The focus of the Smart Grid initiative is from the utilities' perspective of grid infrastructure enhancement. The program benefits were intended to include:9
A top priority of the SGIG and SGDP programs involves ensuring that projects properly address interoperability (the capability of two or more networks, systems, devices, applications, or components to share and readily use information securely and effectively with little or no inconvenience to the user) and cyber-security(the ability of electric networks to detect and respond to unwanted intrusions by hackers or terrorists into grid-connected software and hardware systems, including protections to prevent unauthorized access to data or system controls.).10
While the work being conducted by those associated with the Smart Grid effort is an important piece of the puzzle, it's not the whole puzzle. That will occur when the societal impacts of power outages are incorporated into the utility infrastructure design activity and subsequently rolled up into a national infrastructure effort.
While DOE's Office of Electricity Delivery and Energy Reliability (OE) is responsible for managing these five-year Smart Grid programs, it does not negate the fact that the utility industry in the U.S. is fractured between varying types of utilities: IOU's, REA's, Muni's, and federal government entities.11 For the new infrastructure design to be most effective, the industry may have to take a more "consolidated" approach.
Such a notion may strike a volatile cord in some who fear that the unification of the utility grid may seem like a nationalization (anti-deregulation) effort. While some may dispute the federal government's degree of organizational competence, having a unified national utility infrastructure embracing a single design methodology, one set of regulations, one set of operating specifications, and no regulatory or operational interference between private utilities & municipalities, would ease the entire design upgrade effort. Some may feel that the "interoperability" aspect of the Smart Grid initiative addresses this; however, that focus is on equipment interaction as opposed to the unification or elimination of regulatory barriers between municipalities and utility types.
While I am not advocating the nationalization of the utility industry, I am advocating the project design and management gains that could occur from such a singular-approach effort. As an industry, to survive in a manner that will ensure resources will be available for future demand, there must be a re-alignment in our approach to doing business. We must not fall victim to the struggles seen in countries like India, where utilities got behind the curve relative to having sufficient resources to meet demand. Making an upgrade to the utility infrastructure a part of an overall national effort will enhance the efficiencies that can be realized from such an approach.
We have to remember that the Smart Grid should be more than just a utility industry initiative; rather, it should be part of a larger national infrastructure upgrade that is necessary to ensure our country is well-positioned for future growth and development. Our legacy to future generations is to leave them a national infrastructure that facilitates, rather than hinders, growth in technology, commerce, energy generation, transportation, telecommunications, and education. The inclusion of an underground utility installation strategy in our national infrastructure discussions is an important element of that future.
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