Hurricanes Redux

The Essentials Newsletter, Thirty-first Edition

Just 12 days ago, I wrote my last newsletter as Hurricane Helene made landfall in Florida and was making its way into Georgia. Now, I write this edition as Hurricane Milton approaches Florida again, but this time on a different trajectory, with its potentially significant impacts only to be felt by that state. We now know about the tragic loss of people’s lives – more than 230 as of this writing – and the devastation of property and infrastructure that resulted from Helene. We also know about the difficulties faced by families and authorities trying to access stranded communities in western North Carolina, many of which were cut off for days due to washed out roads and bridges. Communications were also down in many locations, for a matter of hours or even days in some places. While this situation is fluid and I am, therefore, not yet inclined to draw definitive conclusions, I am compelled to point out several observations:

1) Local, individual actions are crucial.  Neighbors helping neighbors by keeping track of them before impact and checking on each other afterward, when possible. Individuals making reasonable preparations for emergencies such as securing potable water and other emergency supplies like first aid kits and extra medicine in the event of flooding. According to initial reports, those who had all-terrain vehicles in the mountains of western North Carolina have served a crucial role in delivering water and other supplies to stranded victims. This also requires access to fuel, which these ATV owners have clearly had on site.

2) Local charities and churches, including local chapters of national groups, have jumped into the breach to provide help, even staging help as close as possible to impacted areas while roads were closed.

3) Americans will contribute money to relief and will volunteer if they can. My amazing assistant, Caley, who lives in eastern North Carolina, has taken the last several days to volunteer via Samaritan’s Purse.

4) Unfortunately, there is still (as of this writing) a “who’s on first?” lack of understanding at the state and federal levels about who is in charge when the need goes beyond that than can be provided locally. Hurricane Helene’s devastation requires big trucks and machinery to even access certain communities. That’s a military and/or Federal Emergency Management Agency (FEMA) function and one of them needs to lead the effort – the decision about which entity is best suited to lead, in my opinion, should flow from the governor given historic disaster response roles and responsibilities. Regardless, one group needs to lead or there will be ongoing confusion and balls will get dropped. This situation should be evaluated after the response is completed, perhaps via a joint effort between the National Governors Association and FEMA.

5) Federal congressional representatives and senators can be valuable resources for local constituents to get the needed services and lifesaving assistance they need. As an anecdote, my friend contacted her parents' congressman for assistance to get bottled water to her mother and father who were stranded in their home.

6) Communications services in the immediate aftermath of the storm were abysmal. Given my previous role as the CEO of the Utilities Technology Council and my experience representing the electric sector for almost 25 years, I know that infrastructure like cell towers can be damaged in storms and if roads are inaccessible, then repairing those structures can be challenging, at best. However, if the cell towers are not damaged, but rather are out of service because the electricity is out, that is unacceptable. Just like military bases, critical manufacturers, and other key sectors understand the need to have backup power onsite, critical cell towers should have battery backup generators onsite. The question is, did they? When they did, were the backup generators and their batteries functioning in the aftermath of the storm? Were they maintained? Unlike electric utilities, telecommunications companies are not regulated in any meaningful way so it may be difficult for the governor’s office to get clarity on this point, but it should try.

7) Running water requires electricity (reminder). What can water utilities do to improve their resilience when the grid goes down? For example, do they also need to have backup generation onsite?

8) Electric utilities should understand what went wrong and what went right in terms of their response and how they can improve, as typically happens in the aftermath of any major event.

9) Critical infrastructure sectors are inextricably intertwined and such intersections are glaring during disasters. More coordination is needed. I don’t think there can ever be too much coordination, honestly.

10) On a very big picture, future-oriented matter, what happens when gasoline/diesel fuel is not easily available to power vehicles? If all transportation is electric and the electricity goes out, it will be problematic unless contingencies are well thought out in advance. We know this in the electric sector and need to start thinking about it now more broadly.

As disaster response continues in western North Carolina, Florida is bracing for Hurricane Milton, which as of this writing is expected to be a Category 4 when it makes landfall in Florida’s Central Gulf Coast. On a personal note, I’m relieved to say that my brother-in-law and his family have evacuated Tampa as Hurricane Milton approaches. We’ll see what happens with their house, but they will be out of danger, thank goodness. I hope others in the hurricane’s path in Florida have heeded the warnings and done the same and that your loved ones in Florida remain safe. 

As I have noted previously, Florida’s electric utilities have made significant investments to “harden” (actions and strategies to make the grid more resilient to storms) their systems and improve preparedness and response to hurricanes. In particular, the 2004-2005 and the 2017-2018 series of hurricanes there (according to floridainsider.com, Charley/Wilma and Michael/Ian during those years are on the top-10 list of the most devastating on record in the state) prompted increased scrutiny by the state government into such efforts, including establishing mandates and incentives for such hardening for the larger utilities.

Electric utilities can be challenged when large transmission towers and lines are downed or destroyed, depending on the circumstances. For example, if such towers are in remote locations and roads are inaccessible, then they cannot be repaired/rebuilt until the roads are cleared/repaired or if air transportation can be deployed (not always practical or possible).  These are major construction projects that must be completed in a matter of days or weeks. When these higher voltage lines/towers are in this situation, utilities will try workarounds by connecting to other transmission pathways or by bringing in transportable generation – think of very large diesel-power generators – that could sustain distribution systems. The lower voltage distribution poles and the lines that go directly into homes and businesses are easier to repair, but as noted earlier, if such homes/businesses are flooded or experienced flooding, they will likely need electrical work and inspections before service can be restored, even if other parts of the system/community can come back online.

In June of this year, the Department of Energy issued a report entitled “Undergrounding to Reduce Florida Power System Vulnerability to Extreme Weather.” Developed by researchers from Lawrence Berkley National Laboratory, the report provides a case study regarding Duke Energy Florida’s efforts to underground its infrastructure in the state. Given the expense of such efforts, they were prompted by legislative and regulatory efforts to improve hurricane resilience in Florida, according to the report:

• In 2004-2005 an unusually severe hurricane season prompted the Florida state legislature and Public Service Commission (FPSC) to introduce broad, stringent requirements for utility storm hardening.

• Another severe hurricane season in 2016-2017 demonstrated that underground lines were systematically less vulnerable to disruption than overhead lines, leading Duke Energy Florida (Duke Energy) to begin a “Targeted Underground Program.”

• In 2019, the Florida state government enacted legislation that streamlined the regulatory procedures for review and approval of storm hardening projects and their associated costs, by means of dedicated proceedings separate from rate cases. The 2019 legislation also:

- allowed utilities to recover costs of storm hardening projects benefiting localized areas such as overhead-to-underground conversions - from its entire customer base, rather than from only the customers directly affected; and

-required that the state’s electric energy utilities submit triennial “Storm Protection Plans” (SPPs), which new requirements included cost and benefit estimation, 10-year planning horizons, and more complete descriptions of proposed measures and implementation strategies.

While not profiled in the DOE report, other large investor-owned utilities (IOUs) in the state that are subject to the same regulations include Tampa Electric, Florida Power & Light, and Gulf Power. Tampa Electric notes its storm hardening efforts on its website:

Our Storm Protection Plan identifies and prioritizes overhead lines that will see the biggest improvement in reliability after extreme weather events. Currently, about 50% of Tampa Electric's power lines are underground, mostly in areas of new construction, which were paid for by developers. Our goal is to have up to 75 - 100 targeted overhead lines converted to underground every year.        

When we identify targeted overhead lines that need to be undergrounded, we begin a comprehensive outreach process to work cooperatively with property owners and neighborhoods on a plan to underground those portions of the circuit.        

While undergrounding is being actively undertaken as described above, utilities have also hardened above-ground infrastructure in many cases, including replacing wood poles with steel poles. In some cases, above-ground infrastructure will continue to be more reliable than below-ground, depending on ground conditions and accessibility.

Not-for-profit public power utilities and rural electric cooperatives also serve approximately 25 percent of the state’s population, according to an informative overview done by the Florida Public Service Commission. While not directly subject to the state regulations described above, they have also undertaken significant efforts to harden their respective grids. The nuance here is that the public power utilities typically serve smaller geographic service territories in municipalities such as Tallahassee and Jacksonville, with the rural electric cooperatives serving large swaths of rural areas. These different types of utilities also intermingle, with transmission service sometimes provided by the larger IOUs and power generation typically either managed by third-party consortia of these utilities or owned and operated by a larger not-for-profit utility, and in some cases provided by the IOUs as well. These various utility types have increasingly worked together in recent years to coordinate on storm response. They also rely on outside help from utilities in other states that pre-position line-worker crews in advance of major storms and help to restore power in the aftermath -- in return for appropriate compensation. As noted in previous newsletters, this is known as “mutual aid” in the industry and has become an invaluable way for U.S. utilities to restore power more quickly, even from major storms and with the challenges noted above.

All of this is to give some context to what the electric sector is doing in Florida to manage hurricane risk, but despite all these efforts, outages are certain to occur given the strength and breadth of Milton. Once again, I send thanks and moral support to the utility workers tasked with responding and those from around the country deployed to help.

I will be interested to see how the telecommunications companies respond to this week’s hurricane, given what just happened in North Carolina and their heavily criticized response to Hurricane Michael after it hit the panhandle of Florida in 2018. For the sake of their customers in Florida, I hope they do better. While generally I am not a fan of unnecessary regulation at either the state or federal level, I will note that electric utilities are heavily regulated because they are considered “natural monopolies.” As noted above, telecommunications providers have, contrastingly, largely been deregulated, even while consolidating and trending toward oligopolies or even monopolies in some areas of the country. In Florida, according to the Florida Internet and Television’s website:

• Florida has a Public Service Commission (PSC) composed of 5 individuals appointed by the Governor and confirmed by the Florida Senate. The PSC has regulatory authority over a variety of utility companies, including telecommunications providers. Any entity offering 2-way voice communications services for hire in Florida must have a certificate issued by the PSC. The PSC has no authority over providers of cable or video services and is expressly prohibited from regulating any “broadband or information services” which would chiefly include internet access services.
• Incumbent local exchange providers (“ILECs”) are those traditional phone companies who prior to 1995 were granted monopoly service areas to provide phone service in Florida. No competing phone service providers were allowed under Florida until the Legislature “de-regulated” local telecommunications services in 1995 and set up a process for the PSC to issue statewide certificates for providing such services to competitive local exchange providers (“CLECs”). The federal government followed Florida’s lead in 1996 by amending and adopting a new national telecommunications regulator framework which authorized local phone competition around the country subject to each state’s specific laws.
• There is a very minimalistic regulatory criteria at the PSC to apply for and receive a CLEC operating certificate. This certificate then allows the entity to provide local phone services. The PSC retains minimal authority to regulate CLECs and ILECs as the preference is for the market place to regulate the prices, service offerings and customer service experience. The PSC does have the authority to regulate and arbitrate carrier to carrier disputes involving the exchange of network traffic and payments.

As Florida weathers this newest hurricane, I hope and pray that no loss of life occurs, that individuals act responsibly and compassionately toward their neighbors, and that the response by critical infrastructure sectors such as electric, telecom, and transportation/public works are well-coordinated and timely.