Cheaper to upgrade than to repair after each storm?



By Liz Enbysk

SGN Managing Editor


Reeling from the high cost of repairs after Superstorm Sandy and earlier storms that battered the Northeast, utilities, regulators and politicians in the region are taking a hard look at the math on prevention versus restoration, according to The New York Times.


Part of that is because utilities have been roundly criticized for doing too little on the prevention side. Yet as The Times suggests, it is typically cheaper for utilities - and their customers - if they skip the prevention measures and focus on restoration.


Here's an example: Consolidated Edison has said it expects to spend as much as $450 million in post-Sandy repairs to the electric grid in and around New York City, which is expected to add about 3% to customer bills over a three-year period.


But to fully storm-proof the system, if that is even possible, could cost 100 times that amount, according to the Times report. Based on Con Ed estimates, even doing just one piece of it - putting power lines underground - would cost $40 billion. Con Ed CEO Kevin Burke said recovering those costs would force electric rates to triple for a decade if not longer.


But with three devastating storms hitting the region in just over a year's time, and no reason to believe there won't be more of the same, some are thinking it's time to take another look at the math.


"We need to think now of not just restoring the grid, but how to make it more survivable,” NARUC President Philip B. Jones said in The Times article. "I think most commissioners are coming around to that.”