It's been a week since the great power blackout, and there are still more than 500,000 customers sweltering in the dark. To add insult to injury, Kentucky, West Virginia and some of the other regions affected last Friday were hit again over the last several days. In all likelihood, we'll see more power blackouts as the summer progresses.
The damage from last Friday's storm was more comprehensive than many understand. Vast regions of Indiana, Kentucky, Ohio, West Virginia, Virginia, District of Columbia, Maryland, Delaware and New Jersey saw thousands of circuit miles of utility distribution systems destroyed. This included poles, wires, breakers, transformers and substations. Repairing and replacing this much infrastructure in just a few days seems like a physical impossibility.
But, impossible as it may seem, most of the region's utilities already completed a majority of the repairs. They did it with the assistance of other utilities.
According to the Edison Electric Institute, utilities previously organized mutual assistance networks. These networks -- a voluntary partnership of electric utilities from across North America -- leverage strength, skills and numbers to restore power. This network has become the cornerstone of electric utility operations during power emergencies.
Here's a more detailed explanation from EEI itself: "These networks are based upon voluntary agreements among electric utilities. Most of these agreements are managed by Regional Mutual Assistance Groups (RMAGs). When a utility determines it needs restoration assistance, it initiates a request through an RMAG. After receiving the request, the RMAG facilitates the process of identifying available crews, and helping utilities coordinate the logistics and personnel involved in restoration efforts."
Last week, a number of RMAGs were deployed. In Exelon's (EXC) territory under BGE services, a RMAG was formed by Canadian and New England crews, and they helped reconnect tens of thousands of Maryland consumers.
Westar Energy (WR) came to the aid of American Electric Power (AEP). PPL Corporation (PPL) sent support crews to a number of different states. Dominion Resources (D) deployed utility crews from 18 states and Canada to help restore their system -- and this is just a sample.
Of course, RMAGs represent a substantial investment in another's utility's infrastructure. RMAG participants need to be compensated for time and materials. Across all the states, these costs will likely add up to billions of dollars. Since affected utilities are regulated, each company receiving RMAG services will review RMAG and other costs and meet with their state utility commission to seek recovery. In the end, consumers may see a small increase in their monthly bills.
This leads to the question as to why utilities don't bury their wires and avoid the wind damage. There's a good reason: Burying wires solves the wind problem, but it creates two new challenges.
The first reason is cost. Burying live wires underground is much more expensive than the cost of using poles. Adding to high capital costs are higher operating and maintenance costs.
The second is water. In order to avoid degradation, short circuits and dangerous shocks, underground cable must be set in well-drained trenches, preferably in watertight conduits. In the end, water becomes an issue needing constant management attention; the additional investment did not necessarily return additional reliability.
When it comes to electric power distribution, there is no perfect answer. Going forward, exposure of local electric distribution systems to inclement weather will remain a reliability concern. For those less tolerant of power outages, electric backup systems may become an attractive option.