THE OKLAHOMAN: Oklahoma electrical failures are renewing a debate over the effectiveness of underground power lines

By Jack Money | Dec. 22, 2020

The Public Utilities Division of Oklahoma’s Corporation Commission is querying electric service providers across much of Oklahoma about how they handled outages caused by October’s ice storm and about how they propose to mitigate potential impacts caused by future similar events.

The division is also taking suggestions from utility and electric cooperative customers, as well as information about how the storm impacted their lives.

The inquiry launched Nov. 17 is reminiscent of a similar study the agency conducted a dozen years ago after a series of ice storms left tens of thousands of Oklahomans without electricity for weeks.

This year’s inquiry comes as some state legislators representing parts of Oklahoma City are arguing utilities and regulators need to do more to improve electrical systems to handle future severe weather events.

And members of Oklahoma’s House of Representatives pledging to support that effort should look to Florida for inspiration.

While it’s likely that under-grounding electrical distribution systems will once again be widely pushed for by frustrated customers, both legislators and their constituents need to understand Florida has a head start.

Utilities and state regulators there are nearly two decades into concentrated efforts to improve the state's electrical transmission and distribution systems.

Oklahomans also need to understand that while Florida’s upgrades cost customers money, they worked. If done right, they could work here as well.

In Florida

Florida utilities have been working with their customers and regulators to upgrade their electrical systems since Hurricane Wilma in 2005, concentrating first on hardening transmission systems by replacing wooden poles with ones made of steel or concrete, then turning their attention toward improving higher-voltage distribution system feeder lines using many of the same strategies.

They also added smart technology to their distribution systems that automatically detects and attempts to reset faults, reroutes power around trouble spots and provides operators with information when outages happen.

All along, they accelerated trimming cycles to better handle vegetation intrusions into utility rights of way to once every three years, and more often in areas where extra attention is needed.

Until a law approved in 2019 by Florida’s legislature took effect this year, Florida Power & Light, Duke Energy Florida, Florida Public Utilities Co., Gulf Power Co. and Tampa Electric had been proposing those upgrades and recovering those costs through traditional rate cases heard by the state’s Public Service Commission.

In addition to locking in past practice, the law provides utilities an annual opportunity to seek separate storm hardening riders from the regulator that customers will pay based on electricity usage after they are approved by the commission.

“That dedicated funding source is not dependent on having revenue from the utility’s normal operations,” said Mark Futrell, a deputy executive director for technical issues at the commission.

As for the actual improvements, Futrell said, “the commission was very proactive in creating a whole suite of actions for utilities to take to try to minimize future damage and reduce outages and reduce restoration costs. That included regular inspections of their transmission and distribution facilities, replacement of damaged facilities, regular trimming of vegetation — in this state, growth is just constant — and looking at ways to facilitate under-grounding of overhead facilities and then hardening, which includes a whole host of actions but primarily involves replacing wood poles with ones made of concrete and steel.”

Over time, utilities have made enough progress to push those strengthening activities down to a neighborhood level, where under-grounding distribution systems begins to have real value, he observed.

Oklahoma’s inquiry

Oklahoma’s Corporation Commission launched its latest inquiry into outage-related issues in mid-November after a late-October ice storm interrupted electrical service to hundreds of thousands of customers across central and southwestern Oklahoma.

The storm inquiry is separate from another inquiry the agency opened earlier this year that already asked for input from companies, special interest groups and the general public on potential ways delivery systems for various types of energy might be improved.

As part of the ice storm effort, formal queries are being sent to utilities and cooperatives requesting information about the extent of damages they incurred, their repair costs, how they communicated with their customers as part of that response and other worthwhile topics as they are raised.

Brandy Wreath, director of the agency’s Public Utility Division, said his staff will take as much time as needed to build a comprehensive review of the event and how it was handled.

“A lot of customers want to be heard, and each can go to our website and file comments as part of this inquiry process," Wreath said. "We really want to address consumers’ concerns. The biggest failure we have uncovered so far is just communications issues that created some mass confusion. But we also intend to look at contracts the providers had with out-of-state vendors they brought in to help them respond to see how those were handled, though it appears they worked wonderfully, at first glance. If there is something wrong, we want to know about it.”

Wreath, who was a young analyst in the division when the commission did its storm inquiry a dozen years ago, remembers recommendations the staff made to regulated utilities and elected commissioners suggesting ways to improve electrical systems’ reliability across the state.

His staff is already updating under-grounding costs that were quoted in a report at the time.

Wreath said utilities regulated by the agency moved over the past dozen years to begin to address issues raised by that report through seeking and getting approvals of grid-hardening riders as part of their normal operations.

Those efforts have often been held back by cost concerns raised by interested parties that usually participate in ratemaking proceedings.

The key things everyone need to remember, Wreath stressed, is that improving the system takes time and money.

“Just because people aren’t seeing it doesn’t mean it isn’t happening in the most responsible, economical way that it can. It is being done methodically and responsibly so that it doesn’t create a sticker shock for ratepayers.”

Customer costs are key

Oklahoma’s Supreme Court, in past cases dealing with utilities, upheld the state constitution’s “takings clause,” which sets out that private owners of facilities used to serve the public must be justly compensated.

“That is the foundation that all the other statutes, rules and case law rest upon,” Wreath said. “If you are going to use privately-owned property (in this case, electrical transmission and distribution systems) for the public good, the owners have to be allowed to earn a reasonable return on their investments.”

The Oklahoma Corporation Commission, he explained, is responsible for monitoring the companies to make sure they aren’t either earning too much or too little through regulatory rate cases that are filed periodically and through annual reviews.

Wreath said his division plans to file a primer explaining the relationship between the utilities and their customers as part of its inquiry.

Jim Roth, the dean of Oklahoma City University’s school of law who was serving as a corporation commissioner in 2007, pushed for the agency’s public utility division to open the inquiry it conducted after the ice storms then.

He agreed the constitutional and case law plays the key role in determining how hardening work can be planned and paid for.

“For customers, there is both value and a price for reliability,” Roth said.

Benefits observed

After Hurricane Irma in 2017, the Florida Public Service Commission sought data from the utilities, customers and other interested parties to evaluate the value of storm protection work that had been carried out by the service providers over the past dozen years.

Despite the storm’s severity, a report issued by the agency in 2018 stated all the regulated utilities were able to show hardened facilities performed better than non-hardened facilities. It also showed there were clearly fewer outages involving under-grounding circuits, compared to overhead counterparts.

While the utilities suggested other improvements might help, such as targeted under-grounding projects for certain lateral circuits, possible legislation to require inspections and hardening of non-electric utility poles, and additional coordination and communication regarding vegetation outside of the utilities’ rights of way, the report concluded the benefits were demonstrable.

“Overall, portions of the system that had been hardened performed reasonably well,” Futrell said.

Roth said this week he believes Oklahoma could eventually achieve Florida’s results, but only if all electrical service providers are involved in a consistent, sustained, thoughtful effort that addresses hardening needs for transmission and distribution systems that eventually could reach neighborhood levels.

But that, he continued, would take legislative intervention, since the corporation commission only has jurisdiction over investor-owned utilities and just a few out of dozens of electric cooperatives that serve residents across the state.

“Weather has only gotten more erratic over the past dozen years. Even though there have been some modest investments over that time, we don’t have a statewide approach to address reliability issues in this new weather paradigm. We have a responsibility on behalf of public safety and the economic peril that comes from outages to try again,” Roth said.

“We should do so with an understanding that we didn’t get here overnight and that it isn’t something that can be fixed overnight. My hope is that the corporation commission partners with legislative leaders to make some needed statutory changes to give system operators a better path to follow to make systematic improvements that will benefit both customers and themselves, over time. It is past time to do something different, in my opinion.”