Obtaining Approval for a Resiliency Program – Playbook Review Part 5

In part four of this series, we discussed developing a resiliency program plan and how to effectively measure its impact. The next step is to obtain approval. This is the most challenging step of the process and success is not guaranteed. Completing the previous steps in detail with a focus on a clear objective and establishing the financial or ratepayer benefit is crucial.

Approval Process Steps

Here are the steps to obtaining approval:

1. Clarify and document a resiliency program objective, how a resiliency program can support the pursuit of the objective, and preliminary resiliency program plan, including a description of hardening, undergrounding, or other strategies anticipated.

2. Select a preliminary path to pursue approval—Public Utilities Commission (PUC) versus Legislative.

3. Capture and describe outage history and performance.

4. Capture and describe national weather history and demonstrate an increase in severe storm frequency and severity in your service territory.

5. Work with public affairs, rates, and communications groups within the utility to build a community outreach program to describe and position the resiliency program.

6. Identify and/or recruit champions within the PUC or legislature depending on the path chosen.

7. Build a regulatory or legislative approval approach in order to gain approval of the program and cost recovery approach. Cost recovery approaches are listed in chapter 4 of the Utility Infrastructure Resiliency Playbook.

8. Clearly document and incorporate anticipated performance improvement and ratepayer benefits.

9. Clearly forecast ratepayer impacts.

The collection and display of metrics to demonstrate implementation performance and results achieved for the benefit of ratepayers is critical. The reporting frequency is normally dictated by the PUC and annual reporting is most frequently selected. Utilities that have built effective stakeholder communications are reporting much more frequently.

Special Considerations for Undergrounding Strategies

Public Utilities Commission (PUC) Versus Legislative Path to Approval

Resiliency programs that rely on undergrounding strategies have and will continue to receive significant pushback, largely due to the high upfront cost. Ultimately, a utility wanting to pursue these types of programs for the ratepayer benefits in satisfaction and reliability will have to pick a traditional rate case, rider/surcharge, or legislative action. Regardless, a champion of this concept at the regulatory or legislative body is a necessary path. In addition, city, local, or regional government support and ratepayer communications are also required. In the case of a legislative approach, the development of a preliminary bill will require at least one, and preferably a bi-partisan group as a formal sponsor to develop and push the bill.

Severe Outage History

In addition to a champion, a customer satisfaction opportunity and outage history must be present. As is highlighted in Chapter 3 of the Utility Infrastructure Resiliency Playbook, a detailed analysis of outage performance focusing on geography, line, and equipment performance is required. Storm frequency and severity over a 10-year cycle is the financial driver of justification of a resilience program that will include undergrounding strategies.

Download the Playbook

Implementing a resiliency program is a long and multifaceted process—closer to running a marathon rather than a sprint. A well-developed program plan that supports implementation will raise the likelihood of approval and successfully executed construction. The next step of our process is implementing the resiliency program. Download a free copy of PDi²’s Utility Infrastructure Resiliency Playbook for a detailed look at each step, case studies, and links to additional resources.