Tuesday, Aug. 28, marks the end of a bad year for Connecticut Light & Power.
On that day in 2011, Tropical Storm Irene made landfall in Connecticut, knocking out power to 670,000 of the electric utility’s customers, some for more than a week.
The situation worsened for CL&P on Oct. 29, when a nor’easter dumped wet, heavy snow on leaf-laden tree limbs, which broke and knocked out power to 810,000 customers, some for up to 11 days.
Those were the worst two outages in CL&P history.
The public outcry following Irene was limited as the state’s other major electric utility — New Haven-based United Illuminating — faced similar problems. Following the snowstorm, however, UI didn’t face the same level of difficulty, and CL&P took the brunt of the public and government official criticism.
In the months that followed, CL&P’s parent Northeast Utilities gave customers a $30 million payout for the outages; Jeffrey Butler, CL&P president and chief operating officer, resigned; NU faced greater scrutiny for its proposed merger with NStar and had to agree to $439 million in concessions to regulators to seal the deal, including $300 million for CL&P infrastructure hardening; and CL&P still faces up to a $150 million penalty for its outage response whenever the company makes its next rate request, likely in 2014.
Despite all the problems, NU completed its $5 billion merger with NStar, the company has new leadership in place, and investors largely have moved on from outages.
“The storm response is really more of history,” said Maurice May, equity analyst out of Westport, Mass., for investment firm Wellington Shields & Co. “It was a major issue that the company and the stakeholders dealt with.”
NU’s stock price has risen 19 percent in the past year, although below the increases for the S&P 500, NASDAQ, and Dow Jones Industrial Average over the same time period.
“Storms are unavoidable whether you are a good utility or a bad utility,” said Christopher Ellinghaus, principal for New York investment firm Williams Capital Group. “Every storm has a negative impact on the public image of the company, but that doesn’t impact investors.”
Meanwhile, CL&P tries to win back hearts and minds by improving its emergency preparedness and outage response, particularly through better communication and removed inefficiencies.
Shortly after the snowstorm, CL&P created the new position of senior vice president for emergency preparedness to better the utility’s outage response. William Quinlan, who had been CL&P vice president for customer solutions, took over the new role. His previous position had focused on all things related to ratepayers.
Quinlan started the process of improving outage response in September, right after Irene, by meeting with local government officials, but none of the changes were in place before the Oct. 29 snowstorm. After the nor’easter, the company accelerated Quinlan’s work and created the new position.
“We were better prepared for the nor’easter because we knew where the issues were, although we hadn’t put in the technology or solutions yet,” Quinlan said.
CL&P’s improvements over the past year center on better and more pertinent communication with state and local officials, and treating each major event as a disaster recovery effort rather than power restoration.
All the utility’s emergency crews have been equipped with GPS, so CL&P officials can track their location and progress from the company’s emergency operations center in Berlin.
“This is an attempt to develop some technology to answer some questions about, ‘Where are your crews?’ and ‘What are they working on?’” Quinlan said.
To prioritize power restoration, CL&P met with local officials to identify the critical facilities — police, fire, shelters — in each town that need power first. Based on those conversations and other with state officials, CL&P instituted a new philosophy in emergency response.
First, the utility plans to eliminate imminent threats to humans, such as down wires. Second, CL&P will work with state and local transportation officials to clear roads. Third, restoration crews will get critical facilities back online. Lastly, the company will perform bulk restoration of its customers, focusing on the largest blocks of ratepayers in the quickest time.
The philosophy is a shift from previous events where CL&P would focus only on its infrastructure. The new priority list — particularly clearing roads — is a shift toward a well-rounded emergency response, Quinlan said.
“When you can’t move ambulances around, and people can’t drive around in their cars, there is no normalcy around the state,” Quinlan said.
The company is still working to improve the mutual assistance system that was much maligned during the 2011 outages. Since utilities don’t staff enough crews for the worst possible scenario — due to costs — they rely on other utilities not in a state of emergency to send crews to help with restoration efforts. The storms in 2011 were so widespread that nearly every utility in the Northeast needed more crews, so the mutual assistance crews had to travel from further distances and didn’t necessarily go to CL&P immediately.
On the national level, the country’s electric utilities are working to improve the mutual aid system with the help of the Edison Electric Institute, said Quinlan. The problems aren’t solved yet but are being addressed.
“The single most important issue on CEOs’ minds is emergency preparedness,” Quinlan said.
CL&P wants to eliminate some of the inefficiencies in the mutual aid system on its end. The company is developing a real-time database to track incoming mutual assistance crews from across the country to determine when they will arrive and how that impacts restoration projection times.
The utility purchased gateways to process mutual assistance crews so they can be briefed on safety and technology, given the proper equipment, and put out to work all from one location. CL&P contracted with Louisiana emergency supplement provider Base Logistics to feed and house large numbers of crews during an emergency.
To minimize the size and frequency of outages, CL&P filed a $300 million infrastructure hardening plan with the state Public Utilities Regulatory Authority. The plan includes enhanced tree trimming, installing tree resistant wires, strengthening utility poles, and using system automation technology that can isolate the impact of a downed wire or other event. CL&P already doubled its tree trimming budget to $54 million, but the plan filed with PURA seeks to keep vegetation control as a priority for years.
CL&P is working with the Department of Energy & Environmental Protection to develop pilot programs for more capital-intensive hardening, such as undergrounding lines, installing back-up generation, and using microgrids that can power a small, critical area during an outage.
“All this is designed to hasten the restoration,” Quinlan said.
Prior to 2011, the worst outage in CL&P history came after Hurricane Gloria ripped through the state in 1985, causing 470,000 customers to lose power. Following that event, the company and regulators made emergency preparedness and storm restoration a priority; but corporate, government, and public memory faded over the ensuing two decades, and other priorities took precedent, such as reducing electric rates.
While CL&P can’t control what regulators decide, Quinlan said, the utility will keep emergency vigilance an important part of the company culture over the next generation by striving to be better through use of industry benchmarks and keeping employees trained on preparedness and recovery.
“The single best thing you can do it make sure you have a robust training, drill and exercise program,” Quinlan said.
While Quinlan feels the company has started to win back the trust of local and state officials through its upgrades and better communication, he said the public as a whole will need more time.
The best thing CL&P can do is minimize outages and perform better when disruptions do happen, he said. Next time Connecticut has a large-scale event, CL&P will judge itself on how quickly power is restored; how well it set, achieved, and effectively communicated realistic expectations; the level of coordination with state and local officials.
“Human nature is to rebuild trust, you have to see those changes in action,” Quinlan said. “Hopefully, it doesn’t take a large-scale event for CL&P.”
