Burying the Distribution Wires A Modest Proposal To Encourage Investment in Underground Distribution

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Burying the Distribution Wires(A Modest Proposal
To Encourage Investment in Underground
Distribution Lines)

• Presented at
• The Florida PSCs
• Electric Utility Infrastructure Staff Workshop
• by
• Charles A. Falcone
• Commissioner, Town of Jupiter Island
• Tallahassee, Florida
• January 23, 2006

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Town of Jupiter Island

• A Small Town of Some 600 Homes on a Barrier
  Island in Martin County
• Weve Pressed FPL For Underground Conversion
  Since Year 2000
• Our Power Supply Reliability Has Been Poor
• We Love Our Trees!
• Were Willing to Pay the Cost of Conversion,
  but.
• We dont want to Overpay!

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I Used To Be An 800 Pound Gorilla Too!

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Obstacles To Conversion

• High Cost
• FPLs Policies
• Easements vs. ROWs
• Overheads
• Duration of Construction Project
• Ownership

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• Were Now Collaborating
• With FPL!

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History of Jupiter Islands Efforts To Bury
Distribution Lines

• Year s 2000-2002 High Cost Discouraged Us
• Years 2003-2004 On The Back Burner
• September 2004 Hurricanes On The Front Burner!
• Early 2005 FPL Develops Engineering Estimate
• October 2005 Wilma!
• FPLs Epiphany

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Epiph-a-ny (Webster) an intuitive grasp of
reality through something (as an event) usually
simple and striking

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Hurricane Wilma Caused A Sea Change!
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Were Now Working Collaboratively With FPL!

• The Project Cost may be Lower! FPL is evaluating
  a cost incentive
• Agreement on Using the ROW, Where Feasible, for
  Underground Facilities!
• Town Collaboration on the Layout
• Good Understanding on Hardening the Feeders
  Coming Into Town
• Evaluation of Waterproof Switchgear

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Is Underground Distribution More Reliable?

• You Bet!
• Were convinced but you may not be yet

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Theres an Understanding Among Utilities.

• Underground is no more reliable than overhead
• Avoid publishing any data that would contradict
  this

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Reliability of Underground vs. Overhead
DistributionFlorida and Nationwide

• Ive read 12 Recent Reports on
• UG Distribution
• Scant Data on Reliability!
• NO Data at all in Florida Reports!
• FPL Ignored Several Requests
• Were Collecting Data Ourselves!

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Utilities Have Discouraged Conversions!Why?

• It would be a lot of trouble to carry out
  extensive conversions
• This work would not increase ROE in fact,
• it would lower ROE!
• For the existing customers and the same rates,
  the utility must contribute capital
• New customers are different. The utility must
  connect them to do business

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Underground Distribution is Especially Desirable
in Florida

• Salt Spray Contaminates Insulators
• Fast Vegetation Growth Interferes With Overhead
  Lines
• Highest Lightning Frequency in the USA!
• Hurricanes Happen Here!

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Distribution Has Been A Stepchild

• Most facilities are old
• Maintenance and capital additions
• are as needed
• Book values are a fraction of original cost, and
  a smaller fraction of todays cost
• This is great business for the utilities!
• Its a Cash Cow
• New neighborhoods are mostly going underground

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Needed A Customer-friendly Underground
Conversion PolicyIn Florida

• Good Public Policy--Encourage Towns and
  Communities to Convert
• Towns Must Pay Conversion Costs
• But-- Provide a Cost Incentive
• Facilitate Administrative Processes

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ExampleMunicipal Utilities Have Carried Out
Some Conversions

• Generally they have encouraged neighborhoods
  to convert with a modest cost sharing around 25
• Examples
• Town of Pawleys Island, SC (Served By Santee
  Cooper)
• also --Vero Beach, Fort Pierce

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Questions?