STORMS HAPPEN AROUND THE GULF COAST FREQUENTLY enough to make planning for them a matter of good business practice. Like all of the utilities in the path of Katrina, Mississippi Power Co. (Gulfport, Mississippi), Entergy (New Orleans, Louisiana) and various cooperatives have formal storm plans they update annually. The plans are both tactical and operational.

For Mississippi Power, inventory levels for storm-related materials are adjusted and a “storm reserve” is put into place prior to the storm season. Some distributors, such as Stuart C. Irby Co. (Jackson, Mississippi), are asked to raise their inventory levels during the storm season. In other cases, utilities place orders for transformers, line hardware and so forth, and have the suppliers build and hold the products at their plant sites. Mobile storm trailers are pre-positioned and staging areas are reviewed. Permutations of this approach are in place at Entergy, too.

Forty-eight hours before a storm reaches landfall, utilities set their plans into motion:

• Fuel is purchased.
• Suppliers and distributors are notified.
• Yards and lay-down areas are secured.
• Everyone has pre-assigned duties.

For the supply chain and logistics functions at Mississippi Power, this “war plan” consists of a stack of binders about 4 inches thick. It is all very premeditated.

That is, as they say, the good news. The bad news is that war plans do not survive first contact with the enemy — even an enemy with a name as lovely as Hurricane Katrina, which made landfall at the Louisiana-Mississippi border on August 29. As Katrina destroyed Mississippi Power's corporate headquarters and flooded its disaster response center, it also managed to leave all of Mississippi Power's 195,000 customers without power. All 70,000 members of neighboring Coast Electric Power Association (Bay St. Louis, Mississippi) were without power as well. And Entergy, especially in Louisiana and particularly in New Orleans, had a level of destruction to its system that was nothing short of epic. Katrina caused nearly 1.1 million outages in Mississippi and southeast Louisiana.

Hurricane Rita added to Entergy's system destruction when it came ashore at the Texas-Louisiana border. The 15-ft storm surge obliterated large parts of southwestern Louisiana. On Sept. 24, when Rita delivered this second blow to Entergy's system, there were about 200,000 customers, mostly in the New Orleans area, who were still out of power from Katrina. Rita added almost 611,000 Entergy customers in Texas and Louisiana to the outage total. The terrific understatement is: This was worse than the worst-case scenario.

The end result is that the plan for disaster response is vital. And putting that plan into action often involves a utility quickly obtaining a lot more wire, poles, hardware, cutouts, insulators and transformers — more than any utility is going to have in stock. By definition, the supply chain is the linkage of goods and services, which creates a value chain, from the supplier of your supplier to the customer of your customer. For first-tier manufacturers of the materials that go into the electrical system, the utility represents either the customer or, in the case of a manufacturer-distributor, the customer of your customer. These manufacturers — for instance, Southwire, ABB, Thomas & Betts and Hubbell — each have their own approach to storm-response preparation. It is interesting to note that all of the manufacturers were shifting operations into storm-response mode as Hurricane Katrina was making landfall in Florida, an event that is overshadowed by her impact on the Gulf Coast a couple of days later.

SOUTHWIRE

There was just no way to know how unprecedented Katrina's destruction would be as Southwire (Carrollton, Georgia) drew on a 55-year history of responding to storm emergencies. Charlie Murrah, vice president of supply chain at Southwire, calls it “pre-emptive planning.” It is all about getting out in front of what the customers' needs will be — not a short order, he says. To reach this goal, Southwire's storm-response planning team is called upon to ensure that storm-specific products are produced for rapid delivery to affected utilities, while minimizing disruptions to nonaffected utilities. During the response, this team meets twice a day to adapt to daily changes as the response scenario unfolds.

To begin with, Southwire's typical product mix is about 30% overhead products and 70% underground. It is a no-brainer that the required products after a hurricane are predominantly overhead. So, even before Katrina tromped across the southern part of Florida, existing manufacturing capacity was being shifted. In addition, surplus manufacturing equipment was being reconditioned, allowing for running more coiling machines and overhead cable-specific machinery. The workforce was also put on notice that the coming Labor Day weekend would likely be a working weekend.

Another component of Southwire's pre-emptive plans involves working with suppliers. For instance, steel for ACSR cores needed to be drawn, galvanized and delivered. The wrinkle in this instance was that the major steel supplier had scheduled a plant shutdown before Labor Day, with inventory during the following week. But, Southwire's suppliers were also dedicated to this response. As the Gulf Coast was determining how bad the pummeling really was, coils of service drop to repair the damage were being produced.

In the nine days following Katrina's strike, Southwire shipped more than 90 truckloads (approximately 3500 miles) of cable and had plans to ship more than 150 truckloads during the first three weeks. However, this was not as smooth as the preceding sentence implies: Southwire faced significant challenges from FEMA and others competing for finite trucking resources.

THOMAS AND BETTS

Thomas and Betts (T&B; Memphis, Tennessee) also began preparations for responding to Hurricane Katrina before it reached the Gulf Coast. Meyer Steel Structures always figures prominently in utility hurricane restoration scenarios. For instance, about 1000 poles — the majority being transmission class poles — were shipped to Florida last year during the response to the 2004 hurricanes. One of the critical advance preparation items is putting all suppliers on notice for steel, galvanizing and transportation. Additionally, T&B develops a listing of finished structures with dimensions and capacities that have been delivered to customers and not yet installed. This list is made available to facilitate cross-use of available structures between utilities.

T&B was responding to the aftermath of Katrina's damage from four plants:

• Gadsden, Alabama
• Lancaster, South Carolina
• Houston, Texas
• Hager City, Wisconsin.

T&B began stockpiling materials and producing transmission class poles before the damage reports started coming in. The best description of the immediate aftermath of Katrina was impending motion, at T&B and elsewhere. Everyone knew that all heck was going to break loose. But, it took several days for the utilities to get a handle on the damage they experienced. The wait was over during the first week after Katrina. Mississippi and Alabama were the first to start assessing the damage. Notwithstanding the devastation in New Orleans, the worst damage was east of the hurricane eye. The flooding in southeast Louisiana prevented an immediate start there.

Then, as everyone was working a 24/7 schedule, Hurricane Rita took aim at Houston and, along with everything else, one of the principal T&B/Meyer plants. Preparing for the worst, the plant's raw materials were evacuated to another plant. Thus, in the midst of the fourth week after Katrina, production was suspended at the Houston plant to prepare for Rita. To compensate, production at other plants was stepped up.

Transportation is one of the key supply-chain linkages. Early on in the preparations for Katrina, this was not a serious problem. However, in the weeks after Katrina, there was a lot of competition for trucking resources from federal agencies and other restoration projects. By the time transportation was needed for the Houston plant evacuation, it was difficult to secure adequate trucks and fuel for the effort. Fortunately, this was accomplished in time for Rita's strike. With the plant surviving Rita, the raw materials were returned to Houston and production resumed.

The normal production schedule was enormously compressed. T&B shipped transmission class standard poles as early as two days after notice to proceed. For customized structures, designs, drawings, approvals and fabrication can take 16 to 18 weeks on a normal schedule. In an effort to bring critical lines back, these elements were condensed to a single week with delivery shortly thereafter.

To ensure timely delivery, much of the transportation was accomplished using team driving so that a product would continuously be moving toward its destination. Entergy was particularly helpful in coordinating special letters of permission from various state agencies to facilitate this task.

One of the many critical lines on the Entergy network has twin 69-kV circuits and a distribution underbuild that was on long spans on lattice structures. The tubular steel caisson foundations for the H-frame replacement structures are 40,000 pounds each (78-inch diameter and 60-ft length) and have already been vibrated into place. The replacement H-frame structures are 201 ft tall and weigh 100,000 pounds each and were shipped in four weeks.

Rita seriously damaged the part of Entergy's south Louisiana transmission network that had been untouched by Katrina. The damage extended into Texas. The T&B/Meyer response to the combined ravages of Rita and Katrina was several hundred transmission class poles and caissons with a total weight in excess of 5 million pounds.

Months later, the men and women at T&B/Meyer Steel Structures continue to work an exhausting schedule to meet the remaining structure needs of Mississippi Power (Southern Company) and Entergy, and to satisfy existing commitments.

HUBBELL POWER SYSTEMS

Hubbell Power Systems (Orange, Connecticut) provides the materials needed to build T&D from the ground up: anchors, hardware, connectors, fittings, insulators, switches, cutouts and hot line tools. Storm-restoration response is integral to this company's business strategy. Before a disaster strikes, Hubbell provides the products needed for restoration because of the materials and equipment it keeps in stock. The company is committed to maintaining an extensive inventory so that it can respond immediately, if not sooner. Actually, 48 hours before projected damage happens, Hubbell carriers are alerted. Also, products in transit are expedited to delivery points.

However, this philosophy of keeping a storm stock does not mean that storm response just involves a trip to the 370,000-sq-ft distribution warehouse and alerting carriers. Because supply chains for many Hubbell products are long and interconnected, a glitch in any one of several places can have major downstream impacts. So, production to meet an oncoming storm's drawdown of inventory begins as the storm approaches. And that production continues until stocks are replenished.

Manufacturing sites directly affected by the response to Katrina are in:

• Centralia, Missouri
• Aiken, South Carolina
• Leeds, Alabama
• Elkton, Tennessee
• Juarez, Mexico.

Products are made from raw materials and often individual components, and the suppliers to these plants can be spread out across the globe. As this manufacturing capability is shifted into recovery mode, it presents an extreme situation where raw materials are required to feed the supply chain.

No matter the plans that were in place, workers at Hubbell's factories and distribution centers were operating at full capacity over the Labor Day weekend. The difference that each person makes, especially in times of stress such as these, cannot be overestimated. In the six weeks immediately following Katrina, Hubbell employees logged more than 36,000 overtime hours related to the storm response. And with the increased damage caused by Rita (and then Hurricane Wilma), they are certainly not finished.

Ron Salberg, Hubbell vice president, marketing services and logistics, said: “We have embraced a lean manufacturing process. Stuff that didn't add value was tossed. And, we have become more agile and flexible. We can change over processes without long tooling delays. Measured in truckloads of product shipped, this response has seen more than 150 loads of storm-related product shipped in the first six weeks after Katrina. And that is in addition to the 300 loads that normally ship. This is a 50% increase in shipments of storm-related products.”

Even as the response to Katrina and Rita continues (and the needs for Wilma are yet unknown as of this writing), the supply job will never be done. Hubbell considers this a continuous process: “The first steps are plan and execute. Then, when that is ‘done,’ check and revise. And then back to the first steps,” Salberg explained.

ABB

In the wake of Hurricane Katrina, ABB, whose U.S. head office is located in Norwalk, Connecticut, took a variety of steps to facilitate the recovery process:

• Mobilized factories and service centers across North America.

• Put European facilities on notice to extend ABB's manufacturing capacity.

• Started work with verbal agreements without waiting for contracts.

• Planned for additional equipment orders by ordering materials ahead of orders.

• Waived expedite fees on recovery-related orders.

• Studied customer histories to see what they would need.

• Worked with customers in other regions to give up their “place in line” for delivery to serve utilities in the affected area.

• Set up emergency 24-hour phone line for Katrina-related calls from customers and employees.

ABB delivered more than 20,000 cutouts and almost 5000 pole-type distribution transformers and pad-mount transformers. But, this is not the interesting part of the recovery story at ABB.

Typically, high-voltage station transformers and dead tank circuit breakers aren't affected by hurricanes because they are built to withstand high winds and are located inside substation structures. But with the massive flooding this time, several units needed to be replaced. ABB's factory in Mt. Pleasant, Pennsylvania, worked night and day to build, test and ship several high-voltage breakers in record time. At ABB's South Boston, Virginia, factory, more than 50 employees gave up their Labor Day holiday plans to work through the weekend to build and ship three critical transformers in the immediate aftermath of Katrina.

Additionally, the Northrup Grumman Ingalls Shipyard (Pascagoula, Mississippi) saw massive flooding. ABB sent a team of engineers and technicians to help restore power to the 13.8-kV power system that had been completely submerged. They worked 16-hour days and slept on a Navy ship due to the lack of local accommodations. Its authorized service provider, Southern Power Systems, was an outstanding partner in the project. Much of the refurbishment and repair work had to be done in Mobile, Alabama, and Baton Rouge, Louisiana, because no facilities were left at the shipyard. Nine days after Katrina made landfall, the power system was energized, and by day 12, the shipyard's 10,000 employees were back to work.

Services of this nature are not normally part of hurricane recovery. In this case, the work included damage assessment, the overhaul of three substations and refurbishment of 330 low-voltage breakers. ABB also supplied six new substations (three within three weeks, three more within five weeks), and one additional 1000-kVA transformer at other sites.

UTILITIES HELP EACH OTHER

Katrina's magnitude of physical destruction surpassed Mississippi Power's 1969 experience with Hurricane Camille, which was a Category 5 hurricane when it reached land. The formal storm response plan envisioned supporting about 4000 workers from six to 10 sites. The actual response to Katrina saw the support of more than 11,000 workers (from 24 states and Canada) operating from about 30 staging sites.

Normally, Mississippi Power's fleet of 600 vehicles consumes 4000 gallons of fuel a day. A week after the storm, a fleet of more than 5000 trucks, special equipment, building/office generators and support equipment consumed about 140,000 gallons of fuel on the peak day of usage.

During this same peak period of the storm response, more than 60 trailer loads of materials were unloaded in a 24-hour period in a distribution center designed to handle a small fraction of this volume of material and traffic. On this same day, 77 loads of transmission and distribution materials were delivered from the four Southern Co. Services' sister companies' — Georgia Power's, Alabama Power's, Gulf Power's and Savannah Electric's — material distribution centers and Mississippi Power's distribution center to 30 staging sites. Normally, no more than four trailer loads of materials are unloaded at Mississippi Power's distribution center and no more than two shipments are made to various company warehouses.

In 12 days, power was restored to all who could receive power. The sad postscript to this stunning achievement is that 18,000 to 20,000 former metering points could not receive power. Such is the level of devastation: More than 10% of former metering points were destroyed by Katrina.

Entergy's destruction was commensurate with the 1.1 million customers out of service due to Katrina. By Sept. 3, almost half of the hurricane outages had power restored. By this time, more than 10,000 linemen and contractors from around the country had restored power to almost all of Mississippi and were working on Louisiana. This workforce was more than eight times the size of the workforce during normal operations in the affected part of Entergy. By Sept. 9, the largest portion of outages remaining was in New Orleans, St. Bernard Parish and Plaquemines Parish — arguably the most devastated areas. When Hurricane Rita hit the Louisiana-Texas border, the workforce had diminished to about 7000 linemen. By the time the combined Rita and Katrina recovery was underway, Entergy was dealing with a workforce of 13,000 linemen and vegetation workers, plus about 3000 support personnel all working on storm recovery. Linemen from more than 130 companies worked to restore power in Mississippi, Louisiana and Texas.

EPILOGUE

The human dimensions of this devastation are incredible. The epic achievement of power restoration by the various utilities in the paths of these storms is almost the easy part of the overall recovery. In some areas of coastal Mississippi, 10% of the meters that lost power immediately after these hurricanes were unable to receive power after energy was restored in the service area. In New Orleans and St. Bernard Parish, the number of meters unable to receive power may approach 50%. This is yet another measure of the staggering cost of these hurricanes. So, while the utility industry and its supply-chain response to storm restoration is commendable, everyone is stunned by the work of rebuilding that remains to be done.

SUPPLY-CHAIN DISRUPTION

An interesting shipping disruption to the supply chain of Southwire's suppliers was being closely monitored in the aftermath of Hurricane Katrina. The hurricane had tossed barges around the Mississippi River at or below the port of New Orleans. And in some areas, the levee and adjacent railroad tracks were littered with barges. But what does this have to do with shipping service drops or ACSR conductors? Well, bauxite, the ore from which aluminum is refined, is shipped to smelters in Kentucky via the Gulf of Mexico. So, when a hurricane is active there, the shipping was disrupted. Compounding to this hitch in delivery, the normal transit through New Orleans was halted after Katrina due to runaway barges.

HUBBELL SHIPMENTS DURING THE FIRST SIX WEEKS AFTER KATRINA

4,000,000 Fasteners
1,000,000 Automatics/Splices
100,000 Arresters/Insulators
100,000 Anchors/Extensions
5,000,000+ Pounds of Product

TIMELY DELIVERY

It happens. Hardware gets lost, misplaced or not delivered. During the initial response to Rita, a batch of hardware was missing and a line was under construction. When a T&B sales person called the company's Houston plant on a late Saturday afternoon, he was connected with Gary Cook, the plant materials manager. Cook spent several hours that day pulling the materials needed. The next morning, at what the Marines call oh-dark-30 hours, Cook left the Houston area so that he could arrive at the work site near Jennings, Louisiana, at the start of the workday. The line rebuild continued without a hitch.

SUPPLY CHAIN EXTENDS WELL BEYOND THE PLANT FENCE

Stuart C. Irby is a key distributor for Hubbell in Jackson, Mississippi. Irby saw that its fuel-storage capacity was inadequate immediately after Katrina. It needed gas-storage tanks, which Hubbell was able to obtain for Irby, thus keeping the supply chain open to the customers of its customer.

THE POWER OF HOPE FUND

Following Hurricane Katrina, Entergy established the Power of Hope Fund to help displaced people transition from temporary housing back into permanent housing in their home communities. Entergy seeded the Power of Hope Fund with an initial $1 million contribution. Through donations from employees, individuals, businesses and organizations, the fund has grown to $3.5 million.

Donors can designate which state they wish their contributions to assist. Information on how to contribute can be found at www.powerofhoep.com.