Con Ed gets a post-Sandy reboot

More than a year after the city’s electric grid failed in superstorm Sandy, the utility giant Con Edison is on the verge of cementing a billion-dollar plan to upgrade its facilities to endure the projected future impacts of extreme weather, under an unusual agreement signed by the utility, city, environmentalists and consumer groups.

Participants in the Con Ed pact — currently under review by the state Public Service Commission — hail it as a breakthrough in preparing the electric grid for climate change.

A Brooklyn Con Edison substation, submerged during superstorm Sandy, is one of many the utility is now fortifying against future threats. AP Photo/Bebeto Matthews

A Brooklyn Con Edison substation, submerged during superstorm Sandy, is one of many the utility is now fortifying against future threats. AP Photo/Bebeto Matthews

“This worked so well that I hope it becomes a model for the future, not only for New York, but also for other states,” said Michael Gerrard, the director of Columbia University’s Center for Climate Change Law, one of the signatories to the agreement.

“Assuming the full commission approves the settlement, our plan is to take this around the country as a model for how utilities should plan for future climate change.”

In announcing the deal on New Year’s Eve, Gov. Andrew Cuomo highlighted its accompanying freeze on the rates utility customers will pay. But in the near future, customer advocates warn, rate increases are inevitable.

Early in 2013, Con Edison had asked the Public Service Commission to approve a rate increase, promising to use the fundsto prepare against future storms. But Con Ed’s plans faced criticism from many corners, including environmental groups and engineers working on the city’s storm resiliency efforts, for preparing only for flood levels seen in Sandy — not anticipated future ones.

Klaus Jacob, a Columbia University climate researcher, testified to the state commission that the company was “designing to Sandy” and had “failed to engage in a robust evaluation of the full range of climate-related risks.” The Public Service Commission itself had faced condemnation after Sandy for oversight of electric utilities, with Gov. Andrew Cuomo’s Moreland Commission slamming it for taking “a reactive rather than a proactive approach to regulating utility storm preparedness and response.”

Seeking transformative action, PSC staff, which advises the commission, took the unprecedented step of calling for a broad group of climate-change and renewable energy experts to convene during proceedings over Con Ed’s bid for a rate increase. Con Ed has since been meeting with city officials and environmental and consumer groups, in a collaborative effort to map out actions the utility must take in order to brace for climate change.

If the Public Service Commission approves the proposal at its Feb. 20 meeting, Con Edison will have to comply with all plans coming out of the effort, formally known as the Storm Hardening and Resiliency Collaborative.

“It’s just massive in its scope and its massive in its timeframe and its an innovative way to do planning,” said Andrea Cerbin, staff attorney at Pace University’s Energy and Climate Center, who has been participating in the process with Con Ed. “This is not the way a company usually does planning. A company doesn’t open itself up to stakeholders and say, ‘Help us out here.’ And that’s why this is a little different.”

The collaborative is starting to generate results. Where Con Edison previously relied on outdated flood maps, the utility has agreed to build its fortifications to the latest flood levels and standards from the Federal Emergency Management Agency.

Con Ed has already been hard at work this year, raising equipment and seawalls in and around their vulnerable substations in Brooklyn, Lower Manhattan and on Staten Island, replacing copper cable with more flood-resistant fiber-optic equipment, installing “smart switches” to isolate the effects of flooding from the rest of the system and isolation devices on overhead wires designed to stop the surge from a downed line from spreading to other parts of the grid.

But with the encouragement of its outside advisors, the Con Ed is preparing its systems not just for onslaughts of wind and water, but also for other projected risks of climate change, like heat waves.

“One thing that became very clear after Sandy was they were thinking about sea-level rise, but they were not thinking at all about temperature,” said Gerrard. “But extreme heat is actually the climate event that is likely to lead to the greatest mortality in cities.”

Cerbin is part of a team working with Con Ed to explore new ways to grapple with “peak demand,” when customers use the most electricity. In the worst-case scenarios, transformers overheat and power cuts out altogether. Air conditioning during extreme heat is by far the biggest driver of demand. “Rather than going in and plopping in a new transformer, how can we meet that needotherwise?” asked Cerbin.

Solutions could include retrofitting buildings for energy efficiency, expanding the use of “modlets” — devices that signal the customer to turn off the AC temporarily during power surges — and rewarding customers with discounts on their electric rates for temporarily turning off their appliances during periods when Con Edison predicts the system will become overloaded.

Cerbin’s team is also working on ways to help Con Edison embrace “distributed generation” — power created by solar and other sources operated by private citizens — and self-sufficient energy systems like the one at New York University, which runs on its own, small power station and remained up and running when surrounding lower Manhattan went dark during Sandy.

Both can help fill holes in Con Ed’s system, especially during crisis situations but have been resisted by the utility as income-draining competition. Under the draft agreement, Con Ed will now be required to install equipment protecting distributed generators from damaging power surges, an important step toward harnessing their power. And the group continues to discuss other ways Con Ed can help encourage electricity generation from outside sources.

“We’re like a weird laboratory right now,” Cerbin observed. “How do you make the grid more resilient, how do you make it more efficient, and how do you recognize and capture the new ways that utilities are operating?”

The utility has already spent about $105 million on resiliency measures in 2013, and proposes to spend more than $1 billion in all through 2016. None of it will come for free. Under the settlement, Con Ed customers will have no rate increases over the next two years for electricity, and three years for gas and steam service.

But the deal also builds in rate increases totaling about $97 million, kicking in right after the freeze. “New Yorkers are worried about paying their current Con Ed bills; it’s a disservice to tell consumers there’s no rate increase, when there’s one built right into the proposed deal,” AARP state director Beth Finkel said in a statement when the rate freeze was announced. What’s more, utilities can’t control fluctuations in the prices of fuel that drives power generation, meaning customers could see increases in their bills even during the freeze period.

And sooner or later, Con Ed will have to increase rates further to pay for all the investments it’s making now. But this time around, Con Ed customers can expect to get better value for the money they spend — above all, confidence that in future extreme weather events, New York City’s power grid will remain active.

“Con Edison has had a huge education curve,” Cerbin said. “The collaborative was a very non-confrontational area where people could share ideas, and the best have risen to the top.”

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