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Montgomery County Council PEPCO Hearing Packet July 19 2012

Montgomery County Council PEPCO Hearing Packet July 19 2012

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Published by delegatearora
AGENDA ITEM #1 July 19,2012 Discussion

MEMORANDUM

July 17,2012

TO: .FROM:

County Council

~ith Levchenko, Senior Legislative Analyst
Discussion: Pepco Response to the June 29 Storm Event

SUBJECT:

The following officials and staff are expected to participate in this meeting: Maryland Public Service Commission • Douglas Nazarian, Chairman Pepco • Tom Graham, President, Pepco Region Montgomery County Government • Eric Friedman, Director, Office of Consumer Protection Maryland Legislatur
AGENDA ITEM #1 July 19,2012 Discussion

MEMORANDUM

July 17,2012

TO: .FROM:

County Council

~ith Levchenko, Senior Legislative Analyst
Discussion: Pepco Response to the June 29 Storm Event

SUBJECT:

The following officials and staff are expected to participate in this meeting: Maryland Public Service Commission • Douglas Nazarian, Chairman Pepco • Tom Graham, President, Pepco Region Montgomery County Government • Eric Friedman, Director, Office of Consumer Protection Maryland Legislatur

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AGENDA ITEM
#1
July 19,2012
Discussion
MEMORANDUM
July 17,2012TO: County Council.FROM:
~ i t h
Levchenko, Senior Legislative AnalystSUBJECT:
Discussion: Pepco Response to the June 29 Storm Event
The following officials and staff are expected to participate in this meeting:
Maryland Public Service Commission
Douglas Nazarian, Chairman
Pepco
• Tom Graham, President, Pepco Region
Montgomery County Government
Eric Friedman, Director, Office
of
Consumer Protection
Maryland Legislature
• Brian Feldman, House
of
Delegates -District 15, Chair
of
the Montgomery CountyHouse Delegation• Brian Frosh, State Senator -District
16
Chris Voss, Manager
of
the Office
of
Emergency Management and Homeland Security(OEMHS) will also attend the meeting. The Council has scheduled a separate briefing for July 24,focusing specifically on the County Government response to the June 29 storm event.
Attachments to this memorandum include:
• June 29 Background Slides (from OEMHS) (©1-9)• July 9 News Release from Council President Berliner (©10-12)
 
The Council President has invited Douglas Nazarian, Chairman
of
the Maryland Public ServiceCommission, to provide his thoughts on the Commission's upcoming review
of
Pep
co's
response tothe June 29 storm event in particular.
1
He can also speak to the Commission's ongoing work regardingelectricity reliability issues and Pepco's rate increase review.Pepco Region President Tom Graham will also participate in the meeting to provide Pepco'sperspective on these issues.Eric Friedman, Director, Office
of
Consumer Protection, will speak to the County's positionand advocacy efforts before the Public Service Commission.Montgomery County Delegate Brian Feldman and State Senator Brian Frosh are also expectedto participate in the meeting.
June 29 "Derecho" Storm Event
Pepco provides electricity to approximately
88
percent
of
Montgomery County's electricitycustomers. The recent "Derecho" storm event on June 29 resulted in 238,000 (or 77 percent)
of
Montgomery County's 309,583 Pepco customers losing power? Some Pepco customers lost power formore than a week. Problems from the loss
of
power were exacerbated by the extreme heat experiencedby the region at that time and the fact that the "Derecho" storm hit with relatively short notice and itsimpacts were widespread, well beyond just the DC region.In advance
of
the Council's July
19
discussion with
Mr.
Nazarian and with Pepco, Chris Voss,Manager ofOEMHS, has provided some summary slides (see ©1-9) regarding the scale and scope
of
thepower outages and some issues associated with Pepco's response (both in Montgomery County and in theDistrict
of
Columbia and Prince George's County). As noted on the slides, a number
of
critical facilitieslost power as a result
of
the storm, including both
of
the Washington Suburban Sanitary Commission's(WSSC) water treatment plants and most nursing homes and assisted living facilities. 72 hours after thestorm, Montgomery County still had 59 critical facilities without power. Montgomery County also had550 out
of
800 traffic signals out
of
power soon after the storm event.On July
9,
Council President Berliner issued a statement (see ©1O-12) stating that "Pepeo'sperformance -on every level was unacceptable." He notes a number
of
short-term issues requiring thePublic Service Commission's attention (including its review
of
Pep
co's
performance in the June
29
storm) and some longer term work that needs to be done to make Montgomery County less dependent on"this centralized monopoly", such as micro grids and distributed generation and, ultimately, perhapsalternatives to Pepco.Not surprisingly, the Council received hundreds
of
emails and letters questioning and criticizingdifferent aspects
of
the restoration effort. Council President Berliner is in the process
of
compiling andsummarizing this correspondence and will provide this package to fellow councilmembers, the Public
1
The Maryland Public Service Commission has scheduled legislative style for September
13
and
14
to review themajor outage event reports filed by the applicable electricity distribution utilities (including Pepco). The Commission willreceive public comments at 8 evening public hearings during August (dates, times, and locations to be determined).
2
Most
of
the County's BG&E customers (13,622 out
of
13,663) and about one-third
of
the County's First Energycustomers (9,823 out
of
28,725) also lost power.
-2
 
Service Commission, and Pepco officials when completed. While this package will include many issuesand questions (many specific to the June 29 event), Council Staffhas noted a few general questions belowfor discussion:
1. 
Preparedness:What,
if
any, impact has Pepco's increased vegetation management efforts had with regardto minimizing isolated outages and/or outages from major storm events like the June 29storm?Is
Pepco's
infrastructure in Montgomery Count particularly susceptible to major stormevents? Will Pepco's planned replacement
of
aging infrastructure over the next severalyears make a significant difference in major storm events such as the June 29 storm?• How does Pepco determine its appropriate "maintenance" level
of
in-house and contractualstaff versus its "peak" staffing level when supplemented by the importation
of
outsideassistance during major storm event responses?• How does Pepco determine how much outside assistance to request and/or how muchassistance Pepco is eligible to receive (from its membership in the Southeastern ElectricExchange and/or other avenues)?• What are the limiting factors as to how many outside contractors Pepco can bring in? Isone limiting factor the number
of
contractors Pepco has the capacity to coordinate andmanage? Is a cost-benefit analysis done
in
considering how much outside assistance toseek?
2. 
AssessmentlRestoration• What work does Pepco begin immediately, once weather conditions are safe?• What work does Pepco wait to do until its damage assessments are completed?• How does Pepco determine when to begin restoration work specific to the County's list
of
critical facilities? Some restoration work begins immediately (e.g., water filtration plants)while other work (related to nursing homes and assisted living facilities) seems to wait untilassessments are completed and/or other infrastructure is repaired.Why does Pepco's assessment
of
storm damage take so long (one to three days)? Wouldadditional staffing reduce the assessment timeframe?3. CommunicationWhy
can't
Pepco provide more specific estimated times
of
restoration (ETRs) for specificfacilities once the assessment process is completed? Do other utilities in the region
or
nation provide more specific ETRs at an earlier stage in the restoration process?
Pepco Reliability and Current Rate Increase Request
The issue
of
Pep
co's
reliability was brought to the forefront two years ago during the majorregional snow event in February 2010 and by a July 2010 severe rain event, both
of
which resulted
in
widespread and multiple day power outages in Montgomery County.In the summer
of
20 1
0,
Pepco disclosed that it ranked in the bottom 25%
of
utilities for twocommon measures
of
day-to-day reliability. Pepco also released a multi-year "ReliabilityEnhancement Plan."On August 12,2010, the Maryland Public Service Commission (PSC) opened an investigation(Case #9240) into the reliability and quality
of
the electric distribution service
of
Pepco. A keyelement
of
the investigation was an independent 3rd party (consultant) review
of
Pep
co's
system
-3

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