Burying the Distribution WiresBurying the Distribution Wires(A Modest Proposal To Encourage Investment in (A Modest Proposal To Encourage Investment in

Underground Distribution Lines)Underground Distribution Lines)

Presented at Presented at

The Florida PSC’sThe Florida PSC’s

Electric Utility Infrastructure Staff WorkshopElectric Utility Infrastructure Staff Workshop

by by

Charles A. FalconeCharles A. FalconeCommissioner, Town of Jupiter IslandCommissioner, Town of Jupiter Island

Tallahassee, FloridaTallahassee, FloridaJanuary 23, 2006January 23, 2006

Town of Jupiter IslandTown of Jupiter Island

A Small Town of Some 600 Homes on a Barrier Island in Martin CountyA Small Town of Some 600 Homes on a Barrier Island in Martin County

We’ve Pressed FPL For Underground Conversion Since Year 2000We’ve Pressed FPL For Underground Conversion Since Year 2000

Our Power Supply Reliability Has Been PoorOur Power Supply Reliability Has Been Poor

We Love Our Trees!We Love Our Trees!

We’re We’re Willing to Pay the Cost of ConversionWilling to Pay the Cost of Conversion , but……., but…….

We don’t want to We don’t want to Overpay!Overpay!

I Used To Be An I Used To Be An 800 Pound Gorilla Too!800 Pound Gorilla Too!

Obstacles To ConversionObstacles To Conversion

High CostHigh Cost

FPL’s Policies—FPL’s Policies—

Easements vs. ROWsEasements vs. ROWs

OverheadsOverheads

Duration of Construction ProjectDuration of Construction Project

OwnershipOwnership

We’re Now Collaborating We’re Now Collaborating

With FPL!With FPL!

History of Jupiter Island’s EffortsHistory of Jupiter Island’s Efforts To Bury Distribution Lines To Bury Distribution Lines

Year s 2000-2002: High Cost Discouraged UsYear s 2000-2002: High Cost Discouraged Us

Years 2003-2004 : On The Back BurnerYears 2003-2004 : On The Back Burner

September 2004 Hurricanes: On The Front Burner!September 2004 Hurricanes: On The Front Burner!

Early 2005: FPL Develops Engineering EstimateEarly 2005: FPL Develops Engineering Estimate

October 2005: Wilma! October 2005: Wilma!

FPL’s EpiphanyFPL’s Epiphany

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

simple and strikingsimple and striking

Hurricane Wilma CausedHurricane Wilma Caused A Sea Change! A Sea Change!

We’re Now Working Collaboratively We’re Now Working Collaboratively With FPL!With FPL!

The Project Cost may be Lower! FPL is evaluating a The Project Cost may be Lower! FPL is evaluating a cost incentivecost incentive

Agreement on Using the ROW, Where Feasible, for Agreement on Using the ROW, Where Feasible, for Underground Facilities!Underground Facilities!

Town Collaboration on the LayoutTown Collaboration on the Layout

Good Understanding on Hardening the Feeders Coming Good Understanding on Hardening the Feeders Coming Into TownInto Town

Evaluation of Waterproof SwitchgearEvaluation of Waterproof Switchgear

Is Underground Distribution More Is Underground Distribution More Reliable?Reliable?

You Bet!You Bet!

We’re convinced; but you may not be yetWe’re convinced; but you may not be yet

There’s an “Understanding” There’s an “Understanding” Among Utilities….Among Utilities….

Underground is no more reliable than Underground is no more reliable than overheadoverhead

Avoid publishing any data that would Avoid publishing any data that would contradict thiscontradict this

Reliability of Underground vs. Reliability of Underground vs. Overhead DistributionOverhead Distribution

Florida and NationwideFlorida and Nationwide

I’ve read 12 Recent Reports on I’ve read 12 Recent Reports on UG DistributionUG Distribution

Scant Data on Reliability!Scant Data on Reliability!NO Data at all in Florida Reports!NO Data at all in Florida Reports!FPL Ignored Several Requests FPL Ignored Several Requests We’re Collecting Data Ourselves!We’re Collecting Data Ourselves!

Utilities Have Discouraged Conversions!Utilities Have Discouraged Conversions!

Why?Why?It would be a lot of trouble to carry out extensive It would be a lot of trouble to carry out extensive conversionsconversions

This work would not increase ROE— in fact, This work would not increase ROE— in fact,

it would lower ROE!it would lower ROE!

For the existing customers and the same rates, For the existing customers and the same rates, the utility must contribute capital the utility must contribute capital

New customers are different. The utility must New customers are different. The utility must connect them to do businessconnect them to do business

Underground Distribution is Underground Distribution is Especially Desirable in FloridaEspecially Desirable in Florida

Salt Spray Contaminates InsulatorsSalt Spray Contaminates Insulators

Fast Vegetation Growth Interferes With Fast Vegetation Growth Interferes With Overhead LinesOverhead Lines

Highest Lightning Frequency in the USA!Highest Lightning Frequency in the USA!

Hurricanes Happen Here!Hurricanes Happen Here!

Distribution Has Been A Distribution Has Been A “Stepchild”“Stepchild”

Most facilities are oldMost facilities are oldMaintenance and capital additionsMaintenance and capital additions

are “as needed”are “as needed”Book values are a fraction of original cost, Book values are a fraction of original cost, and a smaller fraction of today’s costand a smaller fraction of today’s cost

This is This is great businessgreat business for the utilities! for the utilities! It’s a “Cash Cow”It’s a “Cash Cow”

New neighborhoods are mostly going New neighborhoods are mostly going undergroundunderground

Needed: A Customer-friendly Needed: A Customer-friendly Underground Conversion PolicyUnderground Conversion Policy

In FloridaIn Florida

Good Public Policy--Encourage Good Public Policy--Encourage Towns and Communities to ConvertTowns and Communities to Convert

Towns Must Pay Conversion CostsTowns Must Pay Conversion Costs

But-- Provide a Cost IncentiveBut-- Provide a Cost Incentive

Facilitate Administrative ProcessesFacilitate Administrative Processes

Example:Example:Municipal Utilities Have Carried Municipal Utilities Have Carried

Out Some ConversionsOut Some Conversions

Generally they have encouraged Generally they have encouraged neighborhoods to convert with a modest neighborhoods to convert with a modest cost sharing– around 25%cost sharing– around 25%

Examples: Examples:

Town of Pawley’s Island, SC (Served By Santee Cooper)Town of Pawley’s Island, SC (Served By Santee Cooper)

also --Vero Beach, Fort Piercealso --Vero Beach, Fort Pierce

Questions?Questions?