Eight electric utilities and energy companies announced an initiative to pool transmission equipment for improved response to major events affecting the electric transmission grid by securing access to domestically warehoused long lead-time critical equipment, according to a Grid Assurance release.
Affiliates of American Electric Power, Berkshire Hathaway Energy, Duke Energy, Edison International, Eversource Energy, Exelon, Great Plains Energy and Southern Company signed a memorandum of understanding to develop Grid Assurance, a limited liability company that will offer its subscribers cost-effective solutions for enhancing grid resiliency and protecting customers from prolonged transmission outages. As proposed, Grid Assurance would own and provide subscribers with quick access to an inventory of emergency spare transmission equipment that can otherwise take months to acquire.
The project will first have to jump through some regulatory hoops. Grid Assurance filed a petition with the Federal Energy Regulatory Commission (FERC) yesterday seeking confirmation that this service can be part of a transmission-owning entity's strategy to effectively address grid resiliency mandates. Grid Assurance will not be FERC regulated, but plans to charge cost-based subscription fees, similar to FERC-regulated transmission formula rates. Cost-based subscription fees are expected to facilitate subscribers' ability to recover expenses.
Restoration of the transmission grid can be hampered by long lead times required to design, build and deliver critical replacement equipment including large transformers, circuit breakers and other specialized electrical equipment.
Grid Assurance plans to own and maintain equipment at secure, strategically located warehouses, contending that it can do so more cost-effectively than companies independently securing emergency spare equipment for high-impact, low-frequency events due to economies of scale, diversification and improved logistics.
Grid Assurance expects to offer additional logistics support to expedite transportation of equipment to impacted sites. Subscribers can call on equipment when they experience certain events, such as physical attacks, electromagnetic pulses, solar storms, cyberattacks, earthquakes and severe weather events.
Grid Assurance said it can complement existing programs transmission owners have, and industry initiatives, like the Spare Transformer Equipment Program (STEP) coordinated through the Edison Electric Institute, to enhance access to spare transformers and other equipment by providing a more comprehensive inventory of critical spare equipment.
Contingent on regulatory approvals, Grid Assurance is expected to begin accepting subscribers and identifying inventory in 2016.