Senate committee hammers utility companies on Sandy response
With several tactics already proposed by utility companies and state legislators in the wake of Hurricane Sandy to protect gas and electric infrastructure from future storms, the New Jersey Board of Public Utilities is working with the Edward J. Bloustein School of Planning and Public Policy at Rutgers University to determine the costs and benefits of driving power cables underground or raising utility substations before those efforts are implemented, BPU President Robert M. Hanna said at a Senate committee hearing on utility storm response today.
"We're not going to sit here and wait on what the utilities companies can come up with. We know what the problems are, and we're already on it," Hanna said. "There are benefits to undergrounding, but it can also be incredibly expensive. If a feeder cable goes down, tens of thousands of people could be out of power, so maybe we should only consider moving those cables underground, or adopting a more aggressive tree-trimming policy for those major cables."
But in her testimony at the hearing, Stefanie Brand, director of the state Rate Council, said the agency should first consider reinforcing standards for utility companies' storm response before initiating a cost-benefit analysis of new practices, as Hanna said "the grade on communications is still an 'F' " for the companies.
"We need to go out and check that the regulations are being complied with, and find out what are we already spending on and if there are ways to enhance that spending. Then, we can look at new things, and then we can look at a cost analysis," Brand said. "We've heard testimony today that it will cost $1 billion for (Jersey Central Power & Light) and (Public Service Electric & Gas) to install smart meters. So, for over $1 billion, we get a meter that, as it goes out, it tells the utility it's out, and then when it comes back on, it tells the utility it's back on — when it might be better to spend that money on raising the substations or improving the reliability of the power grid."
No matter how many investments utility companies make post-Sandy, state Sen. Kevin J. O'Toole (R-Cedar Grove) said the BPU must ensure any profits generated by rate increases remain in New Jersey, as he noted JCP&L "needs to be a better business partner in the state, instead of sticking profits in suitcases and shipping it out to Akron, Ohio," where parent company FirstEnergy Corp. is located.
"A lot of things went wrong — some were OK and some were a complete disaster. The learning curve has got to stop, because after Sandy we're dealing with the same problems we had after Irene," O'Toole told JCP&L President Donald M. Lynch at the hearing. "Maybe it's time some of the profits have to be kept in New Jersey where they're generated."
Ralph LaRossa, president and CEO of PSE&G, said in his testimony that his company is willing to invest in improving its substations, switching stations and other infrastructure in New Jersey, but "first we need to figure out: What are we building to?"
"Are we building to a category two, three or four storm? If we solved the problem for a storm surge, we would not be prepared for an earthquake," LaRossa said. "What we really need is to build more redundancy into the power grid and enact more stringent tree-trimming policies."
While Hanna said "it's certainly true that in extreme weather events, one of the causes of widespread power outages is wind knocking down trees," he noted there's "not much political will for aggressively pruning those trees or chopping them down."
"If we turned Shady Lane into Sunshine Drive, we would have less outages, but (the municipalities) don't want to do it," Hanna said. "And I'm not sure the BPU or the state Legislature should be making that call."
Other recommendations from regulators, Senate committee members and utility company executives included improving automated outage communication tools between utilities and the public, dispatching the influx of line workers more efficiently, and investing in combined heat and power facilities that do not rely on the power grid.