The Florida hurricane story began in 1992, when Hurricane Andrew struck southern Florida with Category 5 devastation. More than 150,000 homes were destroyed or damaged, and about 1.4 million people experienced extended loss of electricity service.
In the wake of Andrew, extensive claims resulted in 11 insurance carriers going bankrupt, causing hurricane insurance premiums to skyrocket or not to be offered at all. Since utilities could no longer get hurricane insurance for their T&D systems, the Florida Public Service Commission allowed them to establish storm reserve accounts to pay for future hurricane costs. Any storm costs in excess of accrued reserves would be recovered through commission hearings.
Fast-forward 12 years to 2004. This was a very active tropical storm season in Florida, including Hurricanes Charley, Frances, Jean and Ivan. Utility workers in Florida worked tirelessly to restore power to customers with each successive storm, and utilities were largely applauded for their efforts. Power system restoration costs for these hurricanes significantly exceeded utility storm reserves, resulting in storm cost-recovery hearings that received little public attention.
All might have been well had Florida had a break from severe weather in 2005. This was not to be. Hurricanes Katrina and Wilma both resulted in extensive damage to electricity infrastructure, with Wilma, in particular, causing millions of customers to lose power, many for more than two weeks.
After two consecutive extreme hurricane years, many customers were understandably frustrated. Whereas utilities were portrayed heroes in 2004, they were portrayed as profiteering evil corporations in 2005. Newspapers attacked utilities for having rotten poles, insufficient maintenance, inadequate tree pruning and waiting for hurricanes to wipe out neglected infrastructure so equipment replacement costs could be separately recovered. What a difference a year can make.
The 2005 storm cost-recovery hearings were quite contentious compared to 2004. Word was out the utilities would be passing on approved storm costs to customers, and some felt less damage would have occurred and restoration costs would have been lower if the utilities were properly maintaining their system. Even the Attorney General Charlie Crist (then considering a run for governor) intervened on behalf of the people of Florida. The auditorium-sized hearing room was standing room only, consistently packed with reporters and organized groups such as retirees wearing matching AARP T-shirts.
Besides cost recovery, these hearings addressed two additional issues. First, all regulated electric utilities in Florida were required to submit a storm-hardening plan. These plans should strengthen infrastructure so less damage occurs during hurricanes, restoration takes less time and restoration costs are lower. Second, the utilities were instructed to collaborate with Florida universities to investigate the costs and benefits of overhead-to-underground conversion.
The undergrounding question seems to come up after every major weather event anywhere in the U.S. The costs and benefits of undergrounding have been studied ad nauseum, but no matter. All of the Florida electric utilities, coordinated by the Public Utility Research Center out of the University of Florida, performed an exhaustive literature review, examined several Florida case studies, and developed a hurricane-simulation model capable of examining the costs and benefits of various storm-hardening approaches, including undergrounding.
As with previous studies, this research showed widespread undergrounding is not cost-effective and can actually make things worse in coastal areas subject to storm surge.
The Florida research did show targeted hardening can be cost-effective. For example, a utility could harden critical structures they really do not want coming down during a hurricane. This could be because it is difficult, timely or costly to repair. Damage to these critical structures also could be disruptive to the overall restoration process, such as downed power lines on highways or the loss of power to critical facilities like hospitals and police stations.
A good case study in system hardening is Florida Power & Light (FPL). Since 2006, FPL has invested nearly $1.5 billion to strengthen its T&D system and make it more storm resilient. This includes the following:
• Strengthening more than 450 feeder mains serving critical community facilities such as hospitals, police stations, fire stations and emergency communications systems
• Inspecting more than 1 million poles, and upgrading or replacing more than 95,000
• Clearing vegetation from more than 100,000 miles (160,934 km) of power lines. FPL also added flood monitors and storm-resistant doors and windows to more than 200 substations (thanks to Hurricane Sandy for the heads up).
As a side benefit, FPL has found its storm-hardening efforts have improved normal-weather reliability, as well.
Now it is 2014, a full decade since the 2004 and 2005 hurricane seasons — after vast amounts of money have been spent on system hardening — and not a single major hurricane has made landfall in Florida since then. However, utilities in Florida have stayed the course knowing future hurricanes are not a matter of “if” but “when.”
This commitment to system hardening is challenging because utilities tend to focus on news-of-the-day issues and because multi-year infrastructure investment programs are inherently difficult to sustain within the typical utility budgeting and ratemaking processes. Still, the Florida story shows significant storm hardening is possible. It just might take an initial Category 5 hurricane followed by back-to-back multi-hurricane years to convince everyone that this is the right thing to do.
