July 21, 2006

Blackouts from wind, lightning vex utilities

By Eileen O'Grady

HOUSTON (Reuters) - Power outages that left more than 1.5
million customers without lights this week have fired up
criticism that U.S. utilities aren't investing enough to
fortify electrical lines against wind, lightning and falling

Blackouts in the Midwest and the mid-Atlantic states left
neighborhoods without power just as a heat wave settled across
most of the country, giving the electricity industry a public
relations headache.

Utilities blamed violent storms packing hurricane-force
winds that snapped trees and downed power lines. But consumer
advocates said the outages point to deeper issues that give the
U.S. worse power problems than other developed countries like
England, France, and Japan.

"It's a huge customer issue," said Jim Owen, spokesman for
Edison Electric Institute, a Washington-based utility trade
group. "Utilities understand this is a priority."

Some experts say U.S. power companies are cutting costs by
spending less money than many other countries to harden
infrastructure against Mother Nature.

"U.S. power prices are cheaper than in the rest of the
world, but we have lower reliability. It is a choice that we've
made," said Jay Apt, executive director of the Electricity
Industry Center at Carnegie Mellon.

The U.S. power grid held up well to the strain of record
electric use against a nationwide heat wave this summer but saw
distribution lines falter in delivering power to individual
homes and businesses during the recent storms.

PECO, a unit of Exelon Corp., said it was hit by the worst
summer storm ever to cross its Pennsylvania territory. The
storm cut power to about 365,000 customers.

"It covered our service territory in less than two hours,
from west to east," said spokesman Ted Caddell. "You can't
fight Mother Nature, you can only deal with it afterward."

Around Chicago, Commonwealth Edison, Exelon's Chicago-based
unit, reported 110,000 customers without power on Tuesday after
storms pushed through.

David Kolata, an Illinois consumer advocate, said he wants
Illinois regulators to investigate the number of outages which
he said seemed excessive based on that storm's severity
compared to more powerful ones that later hit Missouri.


Utilities spend millions each year to trim trees away from
power lines, add circuit ties which allow neighborhoods to
receive power from different substations, and upgrade
transformers and conductors.

But increased spending won't always reduce outages, said
Gautam Mukherjee, a director of Cambridge Energy Research
Associates in Boston. "It's a sophisticated system, but a gust
of wind can knock it out," he said.

According to Apt, Americans on average lose about 214
minutes of power per year compared with 70 minutes in the
United Kingdom, 53 minutes in France and six minutes in Japan.

"Countries like Japan invest a great deal more into the
infrastructure, harder utility poles and towers," Apt said.
"But the cost of power is twice as high."

Burying power lines is the best option to avoid storm
damage but is extremely expensive and vulnerable to problems
such as water intrusion and overheating, Mukherjee said.

An EEI study completed this month showed the cost of
underground lines can be $1 million per mile, or 10 times that
of above-ground lines, and their outages last longer.

Even so, EEI said about half the capital spent by utilities
on new power lines in the past 13 years has gone for
underground lines, especially in densely populated areas.

Deregulation of the power industry has had no impact on
distribution operations, said EEI's Owen, a service that
remains regulated at the state level.

"Regulators are eager to do what they can to reinforce the
distribution system, but they have to be in a position to pass
the costs along to customers. There's no free lunch," he said.