Originally Reported in Bloomberg News: An electrical crew works on overhead lines in Melville, New York following Hurricane Sandy. Four days before Hurricane Sandy struck in October, Consolidated Edison Co. (ED) sought 1,800 power-line-repair workers from its fellow utilities to help respond to the massive storm brewing in the Atlantic Ocean. It got just 32. Three days later, the New York-based utility boosted its request to 2,500. It got 171.
Con Edison’s difficulties getting help from the industry’s mutual aid program, under which U.S. utilities send workers to other regions during emergencies, show how years of cost cuts and regulatory pressure to keep prices low has left them less prepared to restore power from the biggest natural disasters. “Utilities do not have the required field personnel at hand to effectively respond to large storms,” the Moreland Commission, a panel convened by New York Governor Andrew Cuomo to investigate utility storm response and preparation, said in a June 22 report. “National reforms are needed.”
Bigger storms hitting large cities has meant power failures have lingered, drawing the ire of customers, regulators and elected officials. Blackouts lasting more than five minutes cost U.S. power customers about $29 billion annually, according to a 2004 study by Lawrence Berkeley National Laboratory. Sandy caused an estimated $50 billion in damages, according to the National Hurricane Center. Con Edison is seeking to recover about $593 million in costs from its customers, the federal government and insurance. It asked state regulators in January to approve rate increases to help fund $1 billion of new infrastructure spending, including floodwalls to protect equipment.
U.S. utilities employed 61,000 line workers nationwide as of June 2012. That was 4.1 percent less than in 1999, according to the National Bureau of Labor Statistics. Employment had slipped to as low as 54,070 in 2009.
Contractor Employment. Meanwhile, employment of line workers by utility contractors has doubled since 2002, according to the Bureau of Labor Statistics. Last year, they earned an average of $27.70 an hour, 11 percent less than their counterparts at utilities, according to the bureau.
The Moreland report suggested National Guard troops should be trained to help with power restoration efforts. A Connecticut investigation into slow power restoration after two 2011 storms also found fault with the lack of aid from other utilities. A fast-moving “derecho” storm that swept through 11 states in June 2012 prompted Maryland regulators to ask utilities whether other states got an unfair share of line workers.
Outsourced Workers. Instead of keeping the employees year-round, emergency power-line repair has been outsourced to contractors who pay less, said Gregg Edeson, a Los Angeles-based member of the management group at PA Consulting Group and a retired lineman whose son joined in the Sandy power restoration efforts.
“Utilities are trying to figure out what is the critical mass of crafts -- linemen, utility workers, splicers -- to take care of business, new business, reliability on storm days but not major-event days,” Edeson said. “When that 100-year event comes in, they’re going to rely on mutual aid.”
Con Edison eventually used 5,600 mutual aid workers and contractors to complete power restoration from Sandy, said Allan Drury, a company spokesman. About 67,000 people joined in the multistate effort to restore power after Sandy, according to the Edison Electric Institute, a Washington-based group that represents investor-owned utilities. “I don’t think the mutual aid program was a failure,” said David Owens, executive vice president for EEI. The damage from the storm was unprecedented and unforeseen, he said.
Program Changes. The industry group is overseeing changes to the mutual aid program, including creating a standing committee that will plan how to allocate staff and equipment and a support team to coordinate that during storms, Owens said. Regional mutual aid groups will be consolidated to increase the pool of available workers, he said.
Contractors should be included in the allocation of mutual aid among utilities before storms, the Moreland Commission concluded. At present the program only includes workers employed by utilities.
American Electric Power Co. was one of several utilities that couldn’t answer Con Edison’s call for workers before Sandy. The Columbus, Ohio-based company, which serves more than 5.3 million customers in 11 states, kept its crews local until after the storm hit.
With uncertainty about where the storm would ultimately go, “everybody’s not going to send resources to New York four days before you know where landfall is going to be,” Bob Powers, chief operating officer of American Electric Power Co., said in a phone interview. “That’s just the reality.”
No Difficulty. In prior storms, utilities haven’t had so many problems getting workers. Ameren Corp. (AEE)’s Missouri utility “had no difficulty” mobilizing mutual aid crews for three major storms in 2006 and 2007, according to a report by KEMA, a consulting company. Utilities in the path of two of the storms withheld crews until the weather passed through without damage to their systems, according to the report. After Sandy, “now we have a new base level for severe storms,” Owens said. “There’s going to be a need for an increased labor force to deal with it.”
To contact the reporter on this story: Jim Polson in New York at jpolson [AT] bloomberg.net. To contact the editor responsible for this story: Susan Warren at susanwarren [AT] bloomberg.net