Posts about Pepco

Pepco gives very high cost estimates

Residents listed burying the lines as a top priority during early public meetings for the project. The lines are unsightly, and Pepco would often truncate the street's trees to keep them from disrupting lines. Plus, putting the lines underground would reduce the change of trees falling on the lines and knocking out power.

Pepco told DDOT that it would cost $60 million to bury the lines along 12th. Plus, DDOT then-spokesperson Karyn LeBlanc said in an August 2008 email, Pepco rents space on its poles to telecommunication utilities as well, and burying the lines would require moving those wires.

LeBlanc added,

Each property that currently receives service from an overhead connection would need to be "rewired" to accept service from the newly undergrounded connection. This is a cost that would not be burdened to the utility but rather to the property owner. The current cost estimate is $15,000 per property and again that is just for the electrical service. The other communication lines would also need to be "rewired." All these estimated costs would, of course, increase as costs for materials continue to increase.

Are these estimates reasonable?

At DDOT oversight hearings at the time, residents and council staff found comparable cost estimates from other jurisdictions that were putting lines underground. Scenic America said that burying the wires costs $500,000 to $3 million per mile. Since the project covered one mile of street, that means the estimate differ by a factor of 20 to 120.

Information from an undergrounding project in San Francisco put the cost to move a property's connection at $1,500 to $2,000 per property, not $15,000.

These costs are still not small, but they might have been achievable. DDOT had $5.5 million in the project budget left over for miscellaneous streetscape tasks, which could have gone toward wires, but it was too late to make it happen at that point.

More importantly, this reveals a credibility gap for Pepco. The utility wasn't really interested in putting lines underground, so it seems it threw out a very high estimate.

One streetscape won't solve storm reliability

Underground wires on 12th Street could have saved businesses there from losing power, but wouldn't have done much for a broader area. To really combat outages, Pepco would need to bury its main trunk lines.

According to DeBonis, Pepco does want to bury two lines, on Oregon Avenue NW along Rock Creek and on Michigan Avenue NE, near Brookland. It's offered to do this as part of a rate increase currently before the Public Service Commission (PSC); Mayor Gray and other officials today said that maybe the utility doesn't deserve to get its rate hike given what's happened this week.

One thing is clear; unless the PSC starts pushing Pepco hard, wires won't go underground. To the utility, there's no incentive to invest in the cost of expensive infrastructure that's more reliable, or just having more crews on hand to make repairs. As a for-profit company with fixed rates, their only incentive is to keep costs low, and that means skimping on reliability.

The PSC will have to push Pepco harder—if the District can get members confirmed who want to do so. It would help get the discussion going if there were independent, more realiable estimates for costs. We just can't trust Pepco or industry groups whose incentives don't line up with the general public.

In some cases, new poles and old poles were attached to each other with odd collections of metal cables and brackets. Residents wondered whether there was any rhyme or reason to the seemingly random metal supports. W Street NW even had the distinction of a triple pole cluttering a tree box.

According to meeting minutes, ANC3B first attempted to hold Pepco accountable to a specific removal timeline at a November 2004 meeting.

Commissioner [Christopher] Lively reported that Pepco has been in the area and has almost completed removed [sic] their lines off the old poles on to the new poles. Verizon, Comcast, and Starpower, however, have not removed their lines so the poles still cannot be removed. Commissioner Lively will write a letter on behalf of ANC 3B to OCTT [Office of Cable Television and Telecommunications] to bring the issue to their attention.

Nearly a year later, at ANC3B's October 2005 meeting, Commissioner Melissa Lane brought up the issue again, to Pepco representative Roger Green. Green asked for a list of double pole locations in order to identify removal needs. The ANC complied and expected Pepco to deliver.

In June 2007, ANC3B invited Pepco to explain its plan to remove the double poles.

Pepco Regional Vice President, Vincent Orange, and Linda Jo Smith, Public Relations, reported on the status of the double utility poles that has been a problem throughout Glover Park for the past five years. Pepco replaced their poles but could not take all of them down because other service companies (Comsat, Verizon, etc.) and the district had their products on the original poles. Pepco is making a concerted effort to work with these other companies and get rid of the original poles. Ms. Smith committed to returning in September with a status report.

As a concerned resident, I corresponded with Councilmember Mary Cheh and DDOT in 2008 and 2009. Cheh's Director of Constituent Services stated, "Trust me, we have asked and mentioned it, and reminded Pepco. We will keep doing all of the above until we get responses/action."

Likewise, DDOT's Customer Service Officer assured me, "You will be happy to know that we are working with Pepco and other agencies to resolve the double pole issue. You're right, it isn't happening overnight, but we're getting there."

A few back and forth tweets with the @PepcoConnect Twitter account in June 2011 didn't help either, even after I offered to provide an inventory of locations.

Finally the long drawn out issue turned around in October 2011, when I asked my ANC3B single member district commissioner Brian Cohen to intervene. Cohen worked with Tom Smith, Ward 3 Liaison, Mayor's Office of Neighborhood Engagement, who immediately contacted Pepco's Public Affairs Public Affairs Manager for the DC Region, Chris Taylor. Smith also pulled DDOT and the city's cable office back into the issue.

Taylor provided a 521-page document called NJUNS covering the entire Pepco service area. His email walk-through of the pole removal process may be very useful to other neighborhoods trying to resolve this same issue.

To tell you more about the list, NJUNS stands for National Joint Use Notification System. Several states nation wide use this system. The basis of the system is that all utilities in a specific geographic region voluntarily participate in a program to help track progress in removing double poles. As was indicated earlier, equipment must be removed in sequential order from top to bottom. Pepco normally initiates the process when we first remove wires and equipment. Generally, the order is as follows:

1. Pepco
2. DDOT
3. RCN
4. Verizon
5. Pepco inspects to ensure pole is completely stripped
6. Contractor pulls the pole

The NJUNS sends an automated email each time a location is updated. If you look on the report, each page has various steps. At each step, NJUNS automatically sends an email to each utility notifying them of any action that is taken and needed next steps.

Pepco, while now apparently willing to coordinate wire transfers, didn't know where the poles were located. NJUNS listed only three or four double poles for Glover Park, but there were a lot more. Cohen and I counted 41 during our block-by-block survey, and provided a list to Pepco in January 2012.

But moving wires was only part of the problem. In some cases, other utility companies still had wires on the old poles.

Behind the scenes, Pepco lit a fire under the other utilities. Only 2 months after identifying all the pole locations, temporary no parking signs went up and convoys of utility trucks scattered around Glover Park to begin removing the redundant poles.

Over half of the excess poles have been removed already, though ironically 3 new double poles were recently installed.

10 years later, a final resolution is in sight. It took a long time, but Glover Park's double poles are nearly gone. There is hope for other neighborhoods willing to put in the work to identify pole locations and repeatedly follow up with Pepco.

The FBI requires 55 acres surrounded by a large security "moat," which makes it impossible to locate downtown and undesirable in most any DC neighborhood. Prince George's and Fairfax counties are both vying to make one of their Metro stations the future home for the FBI.

As the map above shows, Pepco's main parcel (outlined in black) covers approximately 80 acres. There is plenty of space here for a new FBI headquarters. This could be an option if DC truly wanted to fight to keep the FBI here.

There would be other obstacles, though. A Senate committee required that the GSA place the FBI within 2½ miles of the Beltway, and within 2 miles of a Metro station. The Pepco site is less than ½ mile from the Minnesota Avenue Metro, but more than 5 miles from the Beltway. It is, however, adjacent to a freeway that directly connects to the Beltway in two places, but Congress would need to amend the requirement to make the Pepco site eligible.

FedEx Field, the current home of the Redskins, and its adjacent parking lots encompass approximately 160 acres. A National Park Service maintenance facility and land used as a trash-transfer station lie immediately north of the power plant. These could be combined with the plant site, creating a 90-acre parcel (outlined in red).

While this is significantly smaller than the area currently used by the Redskins, it's not much smaller than the approximately 95 acres of RFK Stadium and its adjacent parking lots, which the Redskins used for decades (when the team actually won multiple championships). Plus, a new stadium could take up less space by replacing the massive asphalt deserts that surround RFK and FedEx Field with more compact parking decks while still leaving some surface space for tailgating.

The Pepco plant abuts a freeway, two Metrorail lines, a major street that provides direct access to downtown, and eventually, a streetcar line which will run along that street. Bicycle infrastructure in the form of trails and Capital Bikeshare stations are being added adjacent to the site; the Anacostia River trails are already close by. An infill Metrorail station could be built at the western end of the parcel, serving a stadium or a headquarters building as well as the River Terrace neighborhood to the south.

A serious obstacle with this site is that building anything first requires environmental remediation. While that might delay any construction there, Pepco and the District Department of the Environment have reached a preliminary agreement on site cleanup (more here and here (PDFs)). Planning for an actual use for the site could help make cleanup a higher priority for all parties involved.

A football stadium or FBI headquarters building would not foster good urbanism, but this site is already cut off from the neighborhoods to the east by the freeway, while the highway-like Benning Road and the Metrorail tracks form a formidable barrier to the south. Parkside, the neighborhood to the north, is not yet fully developed, and the Anacostia River lies directly to the west.

Administration officials are actively negotiating with the Redskins about putting a practice facility at Reservation 13, on the western side of the Anacostia. Unlike the Pepco site, this area can directly connect to the adjacent neighborhood if DC extends the street grid, as is planned.

If the District's leadership continues to insist on bringing the Redskins back, the Pepco would make more sense in the long run than Reservation 13. If they believe we shouldn't let the FBI walk away from DC, this could be a location worth looking into. In addition, there could be many other uses for this site, from adaptive reuse of the plant itself, to light industry (perhaps renewable energy generation?), a unique mixed-use neighborhood, or expanded parkland.

The District shouldn't wait to seriously plan for the reuse of this valuable piece of riverfront property, but will city leaders be able to pursue a use that's creative?

After Tropical Storm Isabel came through in 2003, my nearby Baskin-Robbins had to throw out their entire inventory of ice cream, thousands of dollars worth. They were just one of thousands of businesses that suffered major financial losses due to the power outages from that storm.

According to the article, some customers are spending $9,400 to install natural gas-powered generators in their homes because they can no longer rely on Pepco to provide them with reliable power. If 10,000 customers do that, it's a total expense of $94,000,000 incurred by them to reduce the risks associated with outages. Unlike, say, cell phone service, customers cannot choose to switch to a different utility for their electric distribution service, so there is no competition to raise the bar for reliability.

Pepco is regulated by the public utility commissions in DC and Maryland. The simplest way to get Pepco to make improvements is for these commissions to internalize the costs of outages with a simple mechanism.

Pepco has announced that they have a 5-year plan to improve reliability. So give them the five years they claim they need. Then, starting in 2015, the PUCs should require them to reimburse customers for outages. For example, any residential customer would receive $2 per hour or portion of an hour that their power is out after the first 15 minutes.

If Pepco experiences an equipment failure that knocks out 2000 customers for 3 hours, they pay $12,000: $6 to each customer. If, after a big storm, they lose 100,000 customers for 10 hours, that's $2 million: $20 to each customer. Reimbursements to commercial customers would be on a different scale. (I'm just making up the amount of these reimbursements for illustrative purposes; the appropriate dollar amounts could be higher or lower.)

The utility commissions would build into Pepco's rate case the expected costs to the utility for achieving "average" reliability based on regional or national statistics, or to return to their own reliability rate from 2004. If Pepco exceeds that, then their investors would reap extra profit; if they fall short, their investors pay. This is fair, since the customers who are directly affected are the ones who get the reimbursements if Pepco falls short, while the customer base as a whole would pay a slight premium for increased reliability if they exceed the goals.

The commission could set the bar anywhere they like. One idea would be to expect them to achieve "average" by 2015 and then increase the reliability expectation by some percentage each year, incentivizing Pepco to continuously improve.

What about "Acts of God?" I would propose that there are no "Acts of God." It's up to the utility to prepare for big storms and other large-scale disruptions. This is, in fact, the business they are in. Hopefully the risk of enormous payments would get them to start looking more seriously at undergrounding, redundancy, smart grid and other risk abatement strategies.

Also, they could purchase re-insurance for major losses. That would be good, because the re-insurer would likely be tougher on Pepco than the PUCs, since they would be scrutinizing Pepco's actions to make sure they reduce their own risks.

This customer rebate mechanism is very simple and easy to understand. The financial incentives are exactly aligned with the desired outcomes. The utility is rewarded for exceeding its goals and penalized for falling short. It even incentivizes them to go beyond the minimum and look for creative and cost-effective solutions.

For the last five years, Pepco has gotten fat and happy while allowing its reliability to go to pot. Sure, they've had a couple of uncomfortable press conferences, but no real penalties. A mechanism like this would keep them from letting it happen again.