Six u.s. utilities sign on as initial testers of new transmission grid resilience fix – daily energy insider grade 6 electricity quiz

That equipment includes an inventory of transformers and circuit breakers, as well as secure warehouses to store them in select locations and the preplanned transportation and logistics to get them where they need to go as the situation requires.

Six energy companies formed the company Grid Assurance in 2016 in order to provide an industry-led solution for the need to immediately respond to grid disruptions after a catastrophic event. Thus far, American Electric Power, Berkshire Hathaway Energy’s MidAmerican Energy Co. and NVEnergy, Eversource, FirstEnergy, Kansas City Power & Light and National Grid have signed on to participate in the grid resilience option and have access to the transmission equipment. The companies collectively have transmission facilities in 26 states.

“Increasing the security and resilience of the U.S. bulk power grid is a must for our country,” Michael Deggendorf, CEO of Grid Assurance, said in a written statement. “Having an adequate supply of on-hand, on-shore access to long-lead-time equipment is the biggest challenge to utilities when recovering from catastrophic events.”

According to Grid Assurance, sharing access to inventory will cost three to five times less than transmission-owner companies putting capital towards maintaining an inventory of spare transformers on their own. Grid Assurance charges cost-based subscription fees. These transparent fees will facilitate subscribers’ ability to recover their expenses through the Federal Energy Regulatory Commission (FERC) regulated stated or formula rates.

The need for companies to be ready to respond to outages is nothing new. However, the grid continues to grow, the system is aging, and new threats to it continue to emerge, particularly when it comes to cyberattacks on the power system. In the past, according to Deggendorf, transmission owners relying on manufacturers could wait anywhere from 12 to 18 months for the sort of equipment Grid Assurance proposes to keep on hand.

“Our customers and our economy are increasingly dependent on electricity for everything from high-tech manufacturing to transportation, so a resilient transmission system is more important than ever,” said Rudy Wynter, National Grid president and COO of Transmission, Generation and Energy Supply. “Grid Assurance will be critical to helping us – and our customers – recover more quickly in the event of a major disruption to our grid.”

Every recovery effort comes with its share of cost considerations, though. While a stockpile as such might seem costly, Grid Assurance proposes to keep costs down individually by pooling the total costs among its subscribers. Rather than each transmission-owning company having to purchase spare equipment from manufacturers on their own, they can instead turn to the ready, shared supply guaranteed by a cost-share model.

In essence, the more companies that buy into the plan, the less preparation could cost each of them. Grid Assurance also works with each company to establish a model which best suits their needs, individualizing the response to aspects of high impact, low frequency (HILF) considerations. These include location and type of HILF event, their frequency and severity of occurrence, the diversity of equipment involved, the number of spares required and the restoration required by the subscriber.

In advance of any incident, the subscribers also will be provided with the condition, location, dimensions, weights, manufacturer, performance characteristics and accessory details of the replacement parts being stored for them, along with the aforementioned plans for transportation and installation. Grid Assurance said the equipment will be ordered by the end of this year, and expects deliveries to begin by the middle of next year.

Such moves have been several years in the making. Back in 2015, lawmakers passed the Fixing America’s Surface Transportation (FAST) Act which, among other things, called on the Department of Energy to study the need for a strategic transformer reserve to reduce threats to the nation’s power grid. The DOE released its own report on the topic last year – the Strategic Transformer Reserve Report – which favored an industry-based approach to the issue.