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Energy Industry Confident Of Its Resilience To Hurricane Dorian


© 2019 Bloomberg Finance LP

Coordinated Effort

The electric industry looks at storms “holistically.”

“We’ve got resources all over the country that come together in a culture of mutual assistance. How do we help each other?” he said. “We are already in a battle rhythm of daily if not more than once daily phone calls that include senior government and senior industry leadership coordinating with each other under the auspices of the Electric Subsector Coordinating Council.”

Officials from the Energy Department (DOE) and the Federal Energy Regulatory Commission participate on those calls.

The Southeast Electric Exchange, a regional mutual assistance group of companies, is aggregating resources to help recovery, which includes vegetation management, road clearing, resetting electric poles and restringing transmission, Aaronson said.

He added that DOE’s role is critical. It reports into the Federal Emergency Management Agency about what the energy industry is doing and helps it get what it needs, from granting access for utility crews, making critical fuel available, improving situational awareness, and approving drones by asking for waivers from the Federal Aviation Administration.

“There’s all of these different problems that have come up through the years in different storms. We’ve learned from every one of them. And now we can get in front of them. We really do have a sixth sense about what this storm might look like, what challenges might arise and what can we do with our federal partners to get in front of those so they don’t become big issues and so that we can focus on the business of restoration,” Aaronson said.

Today, Energy Secretary Perry was briefed on the storm by DOE Under Secretary Mark Menezes, and Karen S. Evans, Assistant Secretary for Cybersecurity, Energy Security and Emergency Response and other DOE officials.

U.S. Department of Energy

The Federal Energy Regulatory Commission is monitoring outages from Washington. “The Office of Electric Reliability staff maintains situational awareness on real-time events on the bulk power system through a 24/7 emergency reporting system, and FERC staff is getting regular updates from utilities,” said Celeste Miller, a FERC spokesman.

Digital Grid Pays Off

Between the massive coordination and the new digital pieces of the electric grid, customers should see fewer and shorter power outages.

“When the storm hits, all of this digital infrastructure allows the companies impacted to do restoration while the storm is still hitting,” Aaronson said.

“During Hurricane Rita in 2005, it took Florida Power & Light 13 days to get restored,” Aaronson said.

Though more hurricanes make landfall in Florida than in any other state, the state was spared any hurricanes from 2006 to 2015.

During that time, the utility invested $3 billion for infrastructure hardening—equipment, materials, stronger poles, flood monitoring at substations, smart meters for better situational awareness on the grid. The utility improved its storm preparedness and recovery processes to be more aggressive on maintenance of lines and tree-trimming, Aaronson said.

“When we had Hurricane Irma [in 2017], it took five days to get fully restored, so that delta of eight days is extraordinary,” Aaronson said.

Florida’s GDP is just over $1 billion per day.

“Getting Florida back in business eight days more quickly actually can save money in the long run,” Aaronson said.

Once Dorian makes landfall, utilities will move into the affected area, assess damage, deploy resources, and restore service.

Fukushima Lessons Learned

The nuclear energy industry has spent $4 billion since 2011 to storm proof its facilities. The industry, which powers more than 2 million households in Florida, says it is ready for Dorian.

“We are equipping ourselves for things worse than [a category 4 storm],” said Nuclear Energy Institute spokesman Matt Wald. “We are substantially more prepared for severe weather.”

Four reactors in Florida are owned by Florida Power & Light, which is not a member of NEI.

After the disaster at Japan’s Fukushima Daiichi nuclear facility in 2011, where an epic earthquake in northeast Japan caused a massive tsunami that flooded the reactors, the global nuclear industry overhauled its safety processes, including disaster preparedness, Wald said.

Plants installed satellite phones and outfitted nuclear facilities with cots, food and portable toilets to meet basic human needs should a disaster require staff to be kept on site, Wald said.

“Over time, [nuclear] plants have been required to equip themselves on a ‘Beyond Design Basis,’ where operators prepare beyond ‘what’s the worst that could go wrong,’” he said.

In the case of Florida, each plant operator will decide “whether the anticipated weather conditions are going to violate the [nuclear operating] license.” In the affirmative, operators can shut down a plant instantly, but prefer a gradual shutdown hours before a storm would make landfall, Wald said.

It’s up to Florida Power & Light which owns the four reactors in the state. Once a plant is shut down, it relies on the electric grid to power its pumps and valves to circulate water coolant throughout the reactor. If the grid goes down, it relies on diesel generators. The plant can run on the generators for at least a week, which is about how long it could take to restore power.

Relying On Natural Gas 

The state generates most of its power from natural gas though.

Dean Foreman, chief economist for the American Petroleum Institute, said it’s too early to tell where there might be supply constraints or whether there will be price spikes. But the oil and gas industry is confident it has built resilient infrastructure and an agile supply chain.

“[Fuel] price fluctuation has been normal with hurricanes and large evacuations and some probably should be expected,” Foreman said. “However, as we saw with hurricanes Irma and Matthew, Florida tends to have an excellent supply chain as well as power backup in many locations, which provides resiliency, so the market historically has returned to normal relatively quickly.”

As of Friday, gasoline and diesel fuel stocks in Florida are at near normal levels. Once Dorian hits, “some disruption in south Florida is possible,” Foreman said.

The U.S. Coast Guard has two ports on watch already—Port Miami and Port Canaveral.

Foreman is keeping an eye on Port Everglades near Fort Lauderdale, the Ports of Jacksonville and Tampa, and the Central Florida Pipeline, all of which receive refined products like gasoline and diesel for generators and vehicles.

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There’s no denying that Hurricane Dorian, a Florida-bound Category 4 storm with winds blowing upwards of 150 miles per hour, is likely to make a mess out of the state, tearing down power lines, disrupting fuel supplies, and causing price spikes of gasoline, diesel, and potentially wholesale electricity.

But the energy industry promises the recovery, highly coordinated among industry groups and Washington, should be the least painful in history for nearly 20 million Floridians in Dorian’s path.

The electric industry nationwide made $120 billion in capital expenditures in 2018, which includes storm preparedness and recovery to harden the grid.

“It doesn’t mean that you won’t have power outages, but it does mean the business of restoration can happen more quickly,” Scott Aaronson, Edison Electric Institute’s vice president of security and preparedness, told Forbes.

© 2019 Bloomberg Finance LP

Coordinated Effort

The electric industry looks at storms “holistically.”

“We’ve got resources all over the country that come together in a culture of mutual assistance. How do we help each other?” he said. “We are already in a battle rhythm of daily if not more than once daily phone calls that include senior government and senior industry leadership coordinating with each other under the auspices of the Electric Subsector Coordinating Council.”

Officials from the Energy Department (DOE) and the Federal Energy Regulatory Commission participate on those calls.

The Southeast Electric Exchange, a regional mutual assistance group of companies, is aggregating resources to help recovery, which includes vegetation management, road clearing, resetting electric poles and restringing transmission, Aaronson said.

He added that DOE’s role is critical. It reports into the Federal Emergency Management Agency about what the energy industry is doing and helps it get what it needs, from granting access for utility crews, making critical fuel available, improving situational awareness, and approving drones by asking for waivers from the Federal Aviation Administration.

“There’s all of these different problems that have come up through the years in different storms. We’ve learned from every one of them. And now we can get in front of them. We really do have a sixth sense about what this storm might look like, what challenges might arise and what can we do with our federal partners to get in front of those so they don’t become big issues and so that we can focus on the business of restoration,” Aaronson said.

Today, Energy Secretary Perry was briefed on the storm by DOE Under Secretary Mark Menezes, and Karen S. Evans, Assistant Secretary for Cybersecurity, Energy Security and Emergency Response and other DOE officials.

U.S. Department of Energy

The Federal Energy Regulatory Commission is monitoring outages from Washington. “The Office of Electric Reliability staff maintains situational awareness on real-time events on the bulk power system through a 24/7 emergency reporting system, and FERC staff is getting regular updates from utilities,” said Celeste Miller, a FERC spokesman.

Digital Grid Pays Off

Between the massive coordination and the new digital pieces of the electric grid, customers should see fewer and shorter power outages.

“When the storm hits, all of this digital infrastructure allows the companies impacted to do restoration while the storm is still hitting,” Aaronson said.

“During Hurricane Rita in 2005, it took Florida Power & Light 13 days to get restored,” Aaronson said.

Though more hurricanes make landfall in Florida than in any other state, the state was spared any hurricanes from 2006 to 2015.

During that time, the utility invested $3 billion for infrastructure hardening—equipment, materials, stronger poles, flood monitoring at substations, smart meters for better situational awareness on the grid. The utility improved its storm preparedness and recovery processes to be more aggressive on maintenance of lines and tree-trimming, Aaronson said.

“When we had Hurricane Irma [in 2017], it took five days to get fully restored, so that delta of eight days is extraordinary,” Aaronson said.

Florida’s GDP is just over $1 billion per day.

“Getting Florida back in business eight days more quickly actually can save money in the long run,” Aaronson said.

Once Dorian makes landfall, utilities will move into the affected area, assess damage, deploy resources, and restore service.

Fukushima Lessons Learned

The nuclear energy industry has spent $4 billion since 2011 to storm proof its facilities. The industry, which powers more than 2 million households in Florida, says it is ready for Dorian.

“We are equipping ourselves for things worse than [a category 4 storm],” said Nuclear Energy Institute spokesman Matt Wald. “We are substantially more prepared for severe weather.”

Four reactors in Florida are owned by Florida Power & Light, which is not a member of NEI.

After the disaster at Japan’s Fukushima Daiichi nuclear facility in 2011, where an epic earthquake in northeast Japan caused a massive tsunami that flooded the reactors, the global nuclear industry overhauled its safety processes, including disaster preparedness, Wald said.

Plants installed satellite phones and outfitted nuclear facilities with cots, food and portable toilets to meet basic human needs should a disaster require staff to be kept on site, Wald said.

“Over time, [nuclear] plants have been required to equip themselves on a ‘Beyond Design Basis,’ where operators prepare beyond ‘what’s the worst that could go wrong,’” he said.

In the case of Florida, each plant operator will decide “whether the anticipated weather conditions are going to violate the [nuclear operating] license.” In the affirmative, operators can shut down a plant instantly, but prefer a gradual shutdown hours before a storm would make landfall, Wald said.

It’s up to Florida Power & Light which owns the four reactors in the state. Once a plant is shut down, it relies on the electric grid to power its pumps and valves to circulate water coolant throughout the reactor. If the grid goes down, it relies on diesel generators. The plant can run on the generators for at least a week, which is about how long it could take to restore power.

Relying On Natural Gas 

The state generates most of its power from natural gas though.

Dean Foreman, chief economist for the American Petroleum Institute, said it’s too early to tell where there might be supply constraints or whether there will be price spikes. But the oil and gas industry is confident it has built resilient infrastructure and an agile supply chain.

“[Fuel] price fluctuation has been normal with hurricanes and large evacuations and some probably should be expected,” Foreman said. “However, as we saw with hurricanes Irma and Matthew, Florida tends to have an excellent supply chain as well as power backup in many locations, which provides resiliency, so the market historically has returned to normal relatively quickly.”

As of Friday, gasoline and diesel fuel stocks in Florida are at near normal levels. Once Dorian hits, “some disruption in south Florida is possible,” Foreman said.

The U.S. Coast Guard has two ports on watch already—Port Miami and Port Canaveral.

Foreman is keeping an eye on Port Everglades near Fort Lauderdale, the Ports of Jacksonville and Tampa, and the Central Florida Pipeline, all of which receive refined products like gasoline and diesel for generators and vehicles.


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