MID-ATLANTIC UTILITIES UNDERGROUNDING PROGRAM CASE STUDY 56 4. OBTAINING APPROVAL After establishing a potential resiliency program objective, how a resiliency program can support the pursuit of the objective, how to create a resiliency program, and developing the resiliency program plan, the next step in the Utility Infrastructure Resiliency Playbook (Playbook) is to obtain approval. The case study represents a combination of three Mid-Atlantic utility experiences and is used to introduce this concept and describe how they chose a legislative approval route of the resiliency program rather than a traditional PUC route. CHALLENGE In the 2013/2014 time period, the existing rate case structure was restrictive and regulatory structure adjustments were necessary that could only be addressed through legislative change. The state Public Utility Commission was not supportive of significant undergrounding efforts or pilot projects. Pilot projects are perceived as problematic by Utility A as the iterative process to design them, get them approved, implement them, and document the impact did not fit well into the current reliability measures of success due to the targeted and small scope of these projects. Either a state Public Utility Commission or legislative route for resiliency program approval required a champion, or champions, to help move the program forward. SOLUTION Collaborate with bi-partisan legislation sponsors and champions to raise the likelihood of crafting legislation that will pass the State Legislature and be signed into law by the Governor. Develop effective communication plans that address public, ratepayer, and other stakeholder concerns: o Position research completed to understand opportunity; 60-65% of outages were related to approximately 20% of the tap line mileage. o Position clearly defined objective; up to 50% reduction in restoration time duration and an overall measure of success: Total Length of Restoration (TLR). o Position overall program nature and size; undergrounding of approximately 4,000 miles of tap lines with an approximate cost of $2 billion or $500,000 per mile. o Position phasing to control risk and support oversight. o Document that the data-driven plan yielded a socially equitable result of completed projects between highincome and low-income areas. o Detail controls and limits; $20,000 per zone and downline customer; Average cost per mile below $750,000 – includes total of engineering, design, and construction. o Demonstrate cost versus benefit using non-traditional metrics like impact to State Gross Domestic Product. RESULT Three iterations of legislation were required for full program structure, approval, and implementation. The state Public Utility Commission rejected the first request, scaled back the second as a pilot program, and initially allowed only partial recovery of costs in the third. o Round 1: The State Legislature passed the original law with nearly unanimous support. The state Public Utility Commission described difficulty interpreting what was allowed and expected under the new legislation and ultimately the legislature updated the law – implementation began slowly. o Round 2: Updated legislation was passed and the second iteration was forcefully critiqued by the Office of Attorney General Consumer Protection unit resulting in a third iteration – implementation continued. o Round 3: The third iteration was passed and full program implementation accelerated. The legislation includes limitations, constraints, and individual cost limitation of $20,000 per zone and downline customer, and the average cost-per-mile should not exceed $750,000 (exclusive of financing costs). Current results are approximately $500,000 per mile and $10,000 per customer, well below the limitations.
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