US Regulators Consider the Value of Resiliency

23 April 2018

The Federal Energy Regulatory Commission (FERC) told congressional lawmakers last week its commissioners are investigating ways for electricity markets to value reliability, while distancing themselves from immediate reform. The Nuclear Energy Institute (NEI) says the discussion follows the “concrete action taken by several states, most recently New Jersey, to properly compensate nuclear power’s zero-carbon attributes”. 

At a recent subcommittee hearing before the House Energy and Commerce committee, FERC Commissioner Neil Chatterjee gave his reasons for why, in his response to a proposed rulemaking from the US Department of Energy, he had not voted to compensate baseload power plants for their attributes of having fuel on site.

“The record simply did not support compensating plants based on the availability of a 90-day supply of fuel,” Chatterjee said. “That doesn’t mean that [Energy] Secretary Perry didn’t ask the right question. The question of resilience that we’re examining in this current docket is an essential one. … We are going to ultimately have resilience challenges in this country and we need to be prepared for that.”

NEI noted that, late last year, Perry had directed FERC to issue a rule requiring electricity markets to develop and implement reforms that would fully compensate generation resources for attributes necessary to maintain the grid’s reliability and resiliency. In an order issued in January, FERC terminated the proposed rulemaking, instead directing regional transmission organisations (RTOs) and independent system operators (ISOs) to assess the resilience of the electricity grid and to recommend additional actions to mitigate any identified issues.

During the hearing, FERC Chairman Kevin McIntyre said that the commission had received initial comments from RTOs and ISOs, adding that grid resilience is a “critical” issue, NEI said.

“We need to ensure that our markets are properly compensating the resources that we regard as important to ensure the resilience of our grid,” McIntyre said. “We’re looking very hard at these issues now.”

Commissioner Richard Glick said that the commission risks overturning the decisions of states – some of which have recently passed legislation compensating for their low-carbon benefits – if it intervenes unduly in electricity markets, NEI said.

“These electricity markets for the most part don’t take into account externalities, so I think states and the federal government both have a role in ensuring externalities – such as greenhouse gas emissions – need to be addressed,” Glick said. “If state policies are then overturned by FERC decision making, those states are going to cause their utilities to pull out of these [electricity] capacity markets.”

Mike Doyle, representative for Pennsylvania’s 14th congressional district, said the recent closures of nuclear power plants are setting off “alarm bells” for those who want to see a reduction in the country’s carbon emissions.

“Many Pennsylvanians – including myself – are strong supporters of nuclear power. It satisfies reliability issues and is also carbon-free,” Doyle said. “There should be alarm bells going off across the country as we see how many of these plants … are going to be replaced with natural gas or something else that emits greenhouse gases and make it almost impossible to reach our climate change goals.”

Researched and writte nby World Nuclear News

US electric sector provides 5% of GDP, supports 7 million jobs, study finds

The electric power industry in the United States supports more than 7 million jobs — or one in 20 American jobs — and contributes 5 percent of total gross domestic product, or GDP, says a report released Aug. 2 by M.J. Bradley & Associates.

The MJB&A report, Powering America: The Economic and Workforce Contributions of the U.S. Electric Power Industry, was written for the Edison Electric Institute, the American Public Power Association, and the National Rural Electric Cooperative Association. It offers a detailed analysis of the role that electric companies play in the nation’s labor force and economy.

The study found that the electric power industry directly provides nearly 2.7 million jobs nationwide through its employees, contractors and supply chain, and investments. More than 4.4 million additional jobs are supported through the induced effects of these jobs, the report says.

Among the study’s findings:
⦁    Employment – About 5 percent, or 1 in every 20 jobs in America, depends on the electric power industry. Each job directly provided by the industry “supports an additional 1.7 jobs in our communities.”

⦁    Job quality – The average job in the electric power industry pays twice the national median wage. In 2015, the median annual wage in the industry was $73,000.

⦁    Supporting veterans – The electric power industry “has a long history of hiring military veterans,” who have training and skills that match those required for technical, engineering, support and leadership positions, the report said. Military veteran hiring “accounted for more than 10 percent of new hires in the industry as of year-end 2014, the latest year for which data are available.”

⦁    Infrastructure investment –The significant annual investments by the electric power industry to build smarter energy infrastructure and to continue the transition to cleaner electric generation sources are expected to exceed $100 billion annually for the next several years. This level of investment provides more than 1.4 million jobs, the report estimated.

“The electric power industry is one of the great American success stories and provides high-quality jobs that empower our nation’s economic growth,” said MJB&A President Michael J. Bradley, in an Aug. 2 news release describing the study. “Behind every wall outlet or light switch, there is a dedicated workforce focused on powering the lives of millions of Americans who rely on electricity for nearly everything they do.”

Electricity: ‘the first 5%’ of the US economy

The 5 percent of GDP that flows from the electricity industry “is the first 5 percent of the American economy,” said Paul Allen, senior vice president of MJB&A, during an Aug. 2 conference call with reporters. “Other industries depend on the men and women of the electricity industry because they depend on electricity,” he explained.

Agreeing that the electricity industry is the “5 percent of the American economy that supports the rest,” APPA President and CEO Sue Kelly noted during the conference call that public power utilities “are the backbone of our communities.”

Kelly noted that although there are large public power utilities, the median public power utility serves 4,000 customers, so “we are very prevalent in small-town America.”

“Whether we are small or large, we are top employers in our communities,” she said. These local utilities, owned by the people they serve, offer “good government jobs with good government benefits,” she said — jobs that keep dollars in their communities.

Public power utilities are “part of the fiber of our communities,” Kelly added. “The economic impact is only one part of what we provide … we represent the values of our communities.”

The electric industry “provides tremendous value” to Americans, said EEI President Thomas Kuhn. Pointing out that the study found that the electricity sector is either directly or indirectly responsible for 5 percent of GDP, Kuhn said, “We like to say it’s the first 5 percent of GDP” because without electricity, “you can’t power the rest of the economy.”

NRECA Chief Operating Officer Jeffrey Connor drew attention to the “contribution we make not only to the economy, but to the quality of life.”

Electrons underlie ‘nearly everything we do’

“Nearly everything we do depends on an affordable and reliable supply of electricity,” said the report.

Overall, the power industry “offers a diverse number of careers — system operators, engineers, computer programmers, architects, lawyers, accountants, environmental researchers, cybersecurity specialists, call center employees and customer service representatives, and many more,” it said. For example, power companies employ meteorologists to forecast bad weather, and foresters work alongside tree trimmers to keep long-distance transmission lines working.

The electricity industry “is a major driver of our economy, directly providing more than 2.7 million good jobs in communities across the nation,” said Lonnie R. Stephenson, president of the International Brotherhood of Electrical Workers.

 From the August 3, 2017 issue of Public Power Daily
The full report, Powering America: The Economic and Workforce Contributions of the U.S. Electric Power Industry, is available at this link: http://mjbradley.com/about-us/case-studies/powering-america.

National Grid Action Plan (Dec 2016)

The White House and the Government of Canada released the Joint United States-Canada Electric Grid Security and Resilience Strategy (Strategy) fulfilling the commitment made in March in their joint statement on Climate, Energy, and Arctic Leadership to “develop a joint U.S.-Canadian strategy for strengthening the security and resilience of the North American electricity grid,” including “against the growing threat from cyberattacks and climate change impacts.”  The Strategy describes joint goals and objectives to address the vulnerabilities of the two countries’ respective and shared electric grid infrastructure as a matter of energy security and national security.

The North American electric grid is one large, complex, interconnected machine. The Strategy relies on the existing strong bilateral collaboration between the United States and Canada and reflects a joint commitment and a shared approach to risk management for the electric grid. It also articulates a common vision of a future electric grid that depends on effective and expanded collaboration among those who own, operate, protect, and rely on it. Because the electric grid is vital to the functioning of modern society and dependent on other infrastructure for its function, the United States and Canada developed the Strategy under the shared principle that security and resilience require increased collaboration and shared approaches to risk management.

The Strategy envisions a secure and resilient electric grid that is able to withstand hazards and recover efficiently from disruptions. In pursuit of this goal, the Strategy describes joint approaches to protect today’s electric grid, manage contingencies by enhancing response and recovery capabilities, and cultivate a more secure and resilient future electric grid.

Three strategic goals underpin the effort to strengthen the security and resilience of the electric grid:

  • Protect Today’s Electric Grid and Enhance Preparedness: A secure and resilient electric grid that protects system assets and critical functions and is able to withstand and recover rapidly from disruptions is a priority for the governments of both the United States and Canada.
  • Manage Contingencies and Enhance Response and Recovery Efforts: The Strategy sets out a shared approach for enhancing continuity and response capabilities, supporting mutual aid arrangements such as cyber mutual assistance across a diverse set of stakeholders, understanding interdependencies, and expanding available tools for recovery and rebuilding.
  • Build a More Secure and Resilient Future Electric Grid: The United States and Canada are working to build a more secure and resilient electric grid that is responsive to a variety of threats, hazards, and vulnerabilities, including increased threats from climate change. To achieve this, the electric grid will need to be more flexible and agile, with an architecture into which new technologies may be readily incorporated.

Charge of the Light Brigade: Preparing for Electric Cars

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By Mike Hyland, Senior Vice President of Engineering Services, American Public Power Association

For many people, the rise in popularity of electric vehicles may seem like something new. What they may not realize is that the first electric car was introduced in 1832, around the same time engineers were developing the first internal combustion engine. In fact, we’ve already had a president who was an electric car enthusiast: Woodrow Wilson, who drove a Fine Milburn electric car around Washington, D.C. in the 1910s and 1920s.

And President Wilson wasn’t alone. In those early days of automobiles, an estimated 25 percent of the cars on the road were electric. Driving an EV wasn’t unusual; it was fashionable.

Even if that wasn’t the case for the rest of the twentieth century, thanks in large part to Henry Ford’s manufacturing genius and the availability of cheap oil from Texas, it’s easy to argue that changes in consumer preferences and advancements in storage technologies have put the electric vehicle squarely back in fashion. If you don’t believe me, just walk by a Tesla dealership or spot the plug-in electric hybrids on the road next time you are commuting to work.

And last year, Energy Secretary Ernest Moniz announced that the Department of Energy would be putting forward $50 million to help accelerate the research and future production of electric vehicles.

What’s becoming clear is that the electric vehicle is likely here to stay this time around. There may be some debate about the environmental impact of going electric, but the trendiness of the cars and the pressure of environmental concerns has really increased the EVs popularity, especially among the affluent. And if they are here to stay, how are utilities supposed to react to a new technology pulling a lot of load off of their distribution systems? Even if the electric car is older than the electric power system, it hadn’t been plugged into the electric grid in modest numbers until relatively recently.

So what does the future marriage between electric distribution and the electric car require? I have some ideas.

First off, utilities need to recognize what these vehicles are going to do to their loads. In the 1970s, the prevalence of air conditioners suddenly put new load pressures on utilities as people upped their ACs on a hot day. Are we now going to see load influxes at night when people come home and plug in their electric vehicle? This may require rethinking rate structures and reappraising new peaks, according to the Electrification Coalition, a not-for-profit group promoting electric vehicles.

Second, utilities need to embrace the EV market, beginning with their own fleet of meter readers, bucket trucks and service vehicle. This should expand to the non-commuting vehicles. A scan of the electric service vehicles already in widespread use, from golf carts to fork lifts to farming equipment, shows a number of instances where better battery storage capabilities have made their presence fairly commonplace, and that’s not likely to change as these vehicles offer lower fuel and maintenance costs and quiet operation.

Thirdly, access to infrastructure is a must-have for cities that want to embrace electric vehicles. When I recently talked to a colleague in Florida at a Demand Response event about him making a visit to APPA’s new offices in Crystal City, Virginia, he asked if there was a charging station at our building. I’d never considered this since I don’t have an electric car but it’s clear that people who are going to own electric vehicles are going to plan out trips with the expectation that they will be able to charge their cars at meetings. (For the record, we do have places to plug-in your electric cars at the base of our new building.)

All this shows that utilities should look beyond just renewables, advanced metering, and distributed generation in considering how changes in customer preference, expectations, and needs will impact them. Major changes are also coming from a product that looks like something we’ve had in our garages for a century but which are now going to be plugged into the grid in greater and greater amounts with each passing year.

From Sacramento to Nashville, from Rochester, Minnesota, to Kissimmee, Florida, public power communities are developing the information resources and putting in the infrastructure to support their customers who are already part of this EV resurgence. Just this month, Burbank Water and Power in California is rolling out its curbside charging program. For many utilities, there’s already a critical mass of customers who are driving their electric vehicles and are happy to have a utility that is prepared.

So I applaud Secretary Moniz for trying to get ahead of this shift by boosting R&D in the electric vehicle market. Short of the next Henry Ford harnessing cheap hydrogen to bring the internal combustion engine roaring back, the electric vehicle may prove to be the way of the future — and the latest change that the utility industry must be prepared for.

Michael Hyland

Senior Vice President, Engineering Services

Time to Reform Safety Benchmarks in Public Power

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By Mike Hyland, Senior Vice President, Engineering & Operations and Alex Hofmann, Director, Energy & Environmental Services — American Public Power Association

We spend a lot of time here at the American Public Power Association considering how public power utilities can better measure and improve workforce safety. We are deeply involved with the Institute of Electrical and Electronics Engineers’ National Electric Safety Code and want to ensure that the most up-to-date and data-driven safety practices are adopted by our industry. As staff stewards of APPA’s own Safety Manual and its associated Revision Task Force, we feel compelled to help public power continuously improve its safety culture.

Public power utilities take safety seriously, but the safety benchmarks we use, such as the Occupational Health and Safety Administration (OSHA) incidence rate, don’t always work as intended. The OSHA incidence rate can provide a measure of safety performance, but for true benchmarking purposes we need to measure safety over the long term to see if we really are getting better or worse. Unfortunately, the OSHA incidence rate is not effective for long-term measurement.

The OSHA incidence rate was developed to help industries measure themselves and their relative organizational safety by looking at incidents (injuries and illnesses) adjusted by organization. This is effective from a bureaucratic standpoint because it normalizes the incidents-per-100-employees rate for organizations of different sizes. However, problems arise when the metric is used as a benchmark.

Let’s walk through an example. If you’re a small utility and have a reportable illness or injury, your calculated OSHA incidence rate for the year might be huge compared to the rest of industry. However, we’ve also found that most years the OSHA incidence rate for that same small utility is zero. If you’re a large utility and you have the same number of incidents, your OSHA incidence rate is going to be a small fraction of the industry rate and this won’t vary much no matter how good or bad your safety record is.

At a large utility, your OSHA incidence rate will remain small even if a lot more workers have injuries or illnesses than at a small utility. Using the OSHA incidence rate can mislead utilities of all sizes on their safety performance.

To compound the benchmarking problem, there are fundamental differences in reporting. For example, not all utilities classify the same events as injuries or accidents, and not all injuries are the same — a death is not the same as a paper cut (but that’s a topic for another blog). We need to get better at consistently reporting accident and injury types so that we can focus on adapting to the conditions under which accidents happen. Consistent reporting will also help the industry better identify safety trends.

What we’ve found by analyzing APPA’s RP3 (Reliable Public Power Provider) and Safety Awards of Excellence data is that public power utilities have “five nines” of safety, or a 99.999 percent likelihood of not having an accident (reportable injury or illness) in any given hour of exposure. We found that because of this safety record, the OSHA incidence rate doesn’t seem to make much sense for a utility with less than 20 employees. This means more than 50 percent of public power utilities are left with inadequate benchmarking numbers because they are too small. And large utilities are left with an inadequate number of utilities to benchmark against and may have a false sense of safety.

This chart of 2014 utility safety data should help illustrate why the OSHA incidence rate doesn’t really work as a multi-utility safety benchmark. For the smallest utilities (less than 200,000 worker hours of exposure), there are highly visible incident rate curves. Note the OSHA incidence rate variance among the utilities that have had a single incident.

Safety Graph APPA

It gets worse if we try to take the average of the incidence rate across a utility group that is varied in worker hours of exposure. We almost always end up with too many zeros from the small utilities and the large utilities close to the industry standard case-per-1,000-worker-hours-of-exposure rate, no matter how they are performing. The graph illustrates how many people have to be injured at a utility to result in the same OSHA incidence rate, so consider the following:

  • A utility’s hazard-per-exposure-hour rate does not go away in a single zero-incidence-rate year.
  • A steady incidence rate that is lower than average does not indicate better than industry long-term safety performance.
  • Not all injuries and illnesses are equal and we need better and more standardized information on hazards that lead to incidents.
  • Larger utilities probably have better control over short-term safety-related factors, but don’t necessarily have better long-term safety performance. They also have proportionately more lower-hazard work employees (per worker hour), which reduces the effectiveness of the incidence rate metric as a benchmark. Public power utilities have similar numbers of lineworkers-per-customer, but they often have widely varying complements of additional staff (the position of “energy services director” for example would only be seen at a larger public power utility) — this is also a topic for another blog.

To us, the data says we need to start benchmarking over multiple years just as we do with reliability data to measure our safety performance over the long term and (hopefully) improvement from year to year. Only after we’ve done this can we focus on what’s needed next — true standardization of safety-related reporting.

For public power, the average cases per 1,000 hours of worker exposure over the last three years (without zero-incidence-rate year utilities) is 0.044. How does your utility measure up?

 

-Michael Hyland
Senior Vice President, Engineering Services

APPA Blogs > Public Power Chat > Energy Infrastructure > Time to Reform Safety Benchmarks in Public Power

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