Malloy panel questions CL&P’s tree-trimming budget
Despite recent budget increases, Connecticut Light and Power Co. spent less on tree-trimming–after adjustments for inflation–and cleared fewer miles of wires last year than it did a decade ago, according to testimony state utility regulators submitted Wednesday to Gov. Dannel P. Malloy’s panel studying responses to major storms.
Also, state regulators noted while they measure utilities’ tree-trimming efforts by monitoring past expenditures and annual incidents of limbs hitting lines, there is no clear external standard for assessing the adequacy of these measures, nor are requirements set specifically to mitigate the effects of major weather-related disasters.
“What sort of tree-trimming program would be required to eliminate that risk?” former state economic development commissioner Joseph McGee, chairman of Malloy’s Two Storm Panel, asked. He didn’t get a precise answer from regulators, municipal tree wardens and others who participated in Wednesday’s informational meeting.
But McGee noted that while CL&P’s state-approved budget for tree maintenance has fluctuated up and down over the last decade, it hasn’t matched the 3,532 miles of wires trimmed in 2001 in any year since.
McGee’s question stemmed in part from the charge Malloy gave the panel to open its Wednesday meeting.
Originally formed in September to explore utility and state agencies’ readiness and response to Tropical Storm Irene, which caused over 760,000 power outages, the panel was tasked with asking the same questions about a second storm after an Oct. 29 nor’easter dumped between one and two feet of snow on northern and central Connecticut, causing over 880,000 outages.
Malloy said the state and the utilities need to view the string of recent storms in the context of climate change. He said the benchmark used to be the 1950s, when then state saw three significant hurricanes.
“We’ve now seen perhaps two of the top three or four storms hit in a period of seven or eight weeks,” Malloy said. “We need to drill. We change the fabric, the backbone of our utilities so that they are better able to overcome these challenges.”
“Take the storm for what I believe it was, a warning of things to come,” the governor said. “We have to accept that that’s what it is.”
Malloy has rejected CL&P officials’ arguments that its power restoration efforts, which exceeded 11 days, were due primarily to an unprecedented storm causing historic damage levels. The governor, who also ordered a second, independent review being performed by Witt Associates, a Washington, D.C.-based risk management firm, said he’s convinced the problems stem in significant part by mistakes made by the utility.
“They told us what the standard was. They failed to meet the standard, and in doing so they can’t complain about the repercussions… They broadly disappointed the people of Connecticut, and that will require a response.”
That means improverd response to future storms similar to the Oct. 29 event. “They must have less impact on the citizens of the state of Connecticut,” Malloy said. “That’s our goal.”
The ongoing reviews will scrutinize CL&P from “top to bottom,” Malloy said. “Were they sufficiently structured to make sure that recovery was as high a priority as it needed to be?”
The governor ordered the panel not to rely on assumptions that another incident like this couldn’t happen any time soon.
“It’s no secret that we need to look at tree trimming budgets and programs going forward,” a statement issued Wednesday from CL&P read. “We are an active participant in this review and look forward to hearing the recommendations from the panel and others involved in this process.”
Malloy said the state had sufficient authority to force necessary changes.
“We have all kinds of tools,” he said. “We have the regulatory process. We have the ability to raise issues before [the state Public Utility Regulatory Authority]. We have a department of energy that we never had before, which I think was a failure in government, one which we addressed relatively quickly. And of course we always have legislative recourse, legislative action.”
Regulatory changes could affect the utilities’ rates, earnings, and required spending on tree-trimming and other maintenance.
The state utility regulators have to consider a delicate balance when making decisions in these areas, ensuring utilities have enough resources and spend sufficient funds to provide reliable service, while also working to keep customer rates as low as possible, said Steve Cadwallader, chief of utility regulation for the Public Utility Regulatory Authority.
Utilities bear primary responsibility for crafting their own budgets, including expenditures for tree-trimming, Cadwallader said.
After panel members noted that CL&P’s tree-trimming spending fell from an annual average of $20.4 million from 2001 through 2003 to a three-year average of $13.9 million from 2004 through 2006, Cadwallader said spending in this area tends to fluctuate as the need to “ramp up” tree trimming becomes clear. Regulators have authority to order higher spending, and have utilized it, he said.
The state wanted to accelerate CL&P’s tree-trimming efforts so that it could approach a cycle in which nearly all trees in power line buffer zones are cut back every four years, he said. Currently the utility’s pace is roughly a five-year cycle.
The utility’s tree-trimming spending rose over the last four years when ranged between $23.7 million and $27.4 million.
Still, CL&P’s $22.6 million tree-trimming expenditure in 2001 — is worth $28.9 million now according to the national Bureau of Labor Statistics’ inflation index. That’s larger than both this year’s budget, and last year’s $25.1 million expenditure when it also is adjusted for inflation.
Though the state measures utilities maintenance efforts by comparing past expenditures and monitoring annual problems, McGee asked regulators how they know these criteria are sufficient, and whether any national standard is used.
“I’m not aware that there is a national standard,” John Buckingham, PURA’s senior engineer for utility reliability issues told the panel. Regulators believe the utilities have access to industry data that ranks and compares tree-trimming and related maintenance efforts, but PURA hasn’t been able to obtain it. “There’s been some legal wrangling over submitting it,” Buckingham said.
“We would expect them to spend what is necessary to maintain safe and reliable service,” Cadwallader said.
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