Every utility places reliability as a top priority. But today, utilities and regulators are adding another layer of preparedness—resiliency.
“When we talk about reliability, the way that I like to define it is that reliability deals with events that are high frequency, but low impact,” said Richard Meyer, vice president of energy markets, analysis and standards at the American Gas Association. Examples include balancing supply and demand on a daily basis or addressing a typical disruption to energy supplies.
In contrast, Meyer said, resiliency deals with low-frequency, high-impact events. “We’re talking things like hurricanes, fires, or an exceptionally strong winter storm.”
However, that definition may be expanding. Once unusual, extreme weather and related concerns such as drought are occurring more often and with greater intensity. And with interdependence between natural gas and electric raising the stakes for resiliency planning, increasingly gas utilities must be prepared to supply fuel to back up power equipment—whether residential generators or larger units relied on by hospitals and schools.
Weather extremes are challenging our communities—and local energy providers are on the front lines. That’s why the American Gas Foundation and Guidehouse produced Enhancing and Maintaining Gas and Energy System Resiliency, which reviews useful actions and how regulators can partner with utilities to further resiliency.
According to the report, to a large extent, resiliency planning is an extension of the reliability, safety and sustainability efforts already integral to gas utilities. For example, many AGA members operate underground gas storage facilities or lease capacity. But new storage may be necessary, particularly to address increased reliance on backup generators when power is disconnected during high-wind events, for example.
Ongoing safety and emission-reduction projects are rebuilding pipelines to be stronger, rust-resistant and more flexible. These efforts also can help pipelines resist flooding and earth movement during intense storms.
Renewable natural gas developed for greenhouse gas reduction can also supplement supplies. Farms, food processing units and sewage treatment plants exist virtually everywhere, so locally produced RNG augments supply diversity.
But changing conditions may require different types of investments. For example, unprecedented cold periods have brought attention to the benefits of boosting resilience through weatherization and increased storage infrastructure.
Investing in resiliency means preparing for something we hope will never happen—and if it does happen, only rarely. A regulator’s primary charge is to ensure safe, reliable service at just and reasonable rates. As a result, new rate recovery mechanisms that encourage the development of resiliency assets may be necessary.
That’s why it’s important to illustrate the real impact of extreme weather events on both energy demand and infrastructure, said Meyer. Consider our newfound familiarity with terms like “bomb cyclone,” a weather phenomenon that can cause temperatures to drop more than 10 degrees within minutes. Recently, in California, “atmospheric rivers” brought days of torrential rains, mudslides and power outages. These events underscore the importance of a resilient energy system.
Immediately after AGF published its resiliency report, AGA presented it to the National Association of Regulatory Utility Commissioners. The report suggests federal and state regulators consider establishing resiliency baselines and standards, which can help prioritize investments within communities and on upstream systems. Such standards can inform regulators’ rate recovery decisions. New policies and rules also should address the increasing interdependence between the natural gas and electric systems.
Meanwhile, state regulators may need legislative support to modify definitions of the “used and useful” guidelines that require rate increases to benefit current customers. A strict interpretation of serving this principle can make it harder to improve resilience and harder to prepare for, withstand and recover from future extreme events.
Since regulatory models already support utilities’ capital investments for ongoing improvements, these models could be applied to resiliency. For example, many states allow utilities to recover pipeline replacement costs annually, without a full rate case.
In addition, an electric tariff may help companies whose gas demand goes up dramatically during wind events to supply backup generators. For example, during a 2020 hurricane, New Jersey Natural Gas experienced a 60% one-day increase in gas demand for generator use when regional power was knocked out.
Another mechanism could be a statewide resiliency fund, paid for by a line item on all utility bills. Regulators would review utility proposals for resiliency projects and provide funding for those that meet established criteria.
Still, even as new regulatory models are being discussed, utilities have remained proactive, assuring that reliability investments can also support resilience in the face of the unexpected.
This past December, a powerful winter storm brought unwanted holiday gifts to much of the country. In addition to blizzards and high winds, people in 36 states received wind-chill warnings on Christmas Eve.
Colder temperatures could have strained supply and equipment. But despite the cold, Duke Energy Corporation’s natural gas business—which operates as Piedmont Natural Gas in the Carolinas and Nashville, Tennessee, and as the combined electric/gas utility Duke Energy in Ohio and Kentucky—made sure natural gas customers could stay warm and enjoy their holiday meals. “We worked hard through Christmas so this cold snap could be a non-event for our natural gas customers,” said Sasha Weintraub, senior vice president and president of Duke Energy’s natural gas business unit.
On Dec. 23, the temperature fell to minus 8 degrees Fahrenheit in Duke’s Ohio and Kentucky service areas, hitting the same low in Maryland on Dec. 24. On the 23rd, the utilities delivered 2,690,315 dts—about 1.2 million dts over the average December day. Demand broke one-day records in Nashville, Kentucky and Ohio.
But the companies were prepared. “We have four LNG facilities that we operate for ourselves—three in the Carolinas, one in Nashville,” said Weintraub. “We just built the third one in the Carolinas in 2021. They allow us to have on-system storage for peaking supply when we need it for those really cold days.”
The companies also relied on five compressor stations to keep pressures steady despite fluctuations on the gas transmission system.
That readiness for an unusual weather event is due to the fact that the utilities are constantly upgrading and investing, Weintraub said, in large part to accommodate population growth. The Carolinas, in particular, are experiencing a wave of in-migration, and large new manufacturers use high volumes of gas. Weintraub has also noticed an uptick in natural gas demand for home power-generating equipment.
Customers appear to be noticing the difference. Piedmont Natural Gas earned the No. 1 spot in customer satisfaction with residential natural gas service in the South among large utilities, according to the J.D. Power 2022 Gas Utility Residential Customer Satisfaction Study. “That’s because we serve our customers well and we make investments that allow us to provide reliable service,” said Weintraub. “That’s also a reflection of our regulators and our jurisdictions that allow us to serve our customers well. And we’re proud of that.”
The company also recently built new natural gas infrastructure, replacing 80-year-old propane caverns once used for peak demand. As demand is expected to rise, future supplies may include RNG, particularly from the many swine farms in the region. Weintraub said the company has made investments in RNG production, like dairy and landfill facilities, and is executing a strategy to produce RNG at a cost that is equal to geological gas.
Weintraub said the utility will continue to plan and improve its systems. Its measure of success during extreme weather is that natural gas customers “will have uninterrupted heat, warm water and a working cooktop to make their coffee.”
For a Florida utility, operating before, during and after a hurricane comes with the territory. Hurricane season extends from June 1 through November each year, and while some hurricanes are more threatening than others, TECO Peoples Gas always prepares for the worst.
And one of the worst was last year’s Hurricane Ian, which came roaring in at 155 miles per hour, just shy of a Category 5—and the worst hurricane to hit the state since 1935.
The natural gas utility serves just under 470,000 people across Florida. Its distribution and service systems are built to withstand high winds. Pipelines are buried, safe from hurricane-force winds. Gate stations and regulators remain operational after the most intense storms.
The gas utility’s main charge, then, is community resilience: to anticipate and respond to damage to their customers’ property. And that takes a lot of people power, which in turn requires tremendous advance planning.
Hurricane Ian made landfall in Florida in September 2022. For TECO Peoples Gas, the hurricane’s strength was only part of the problem. What made it particularly challenging was its unpredictability, said Timothy O’Connor, vice president of operations, sustainability and external affairs.
The utility must constantly monitor ever-changing storm tracks and prepare for all possibilities. TECO Peoples Gas has 14 divisions across Florida, so each local team prepares as if the storm could head its way. Plans to prepare and then respond to a variety of storm impacts are executed to ensure the right dispatch of crews, equipment and supplies. The utility must determine which service areas will be most heavily affected and who will be available from nearby field offices to help.
“More than a week out, the weather service was predicting Hurricane Ian would hit Tampa,” O’Connor said, and the utility started to plan for that path. “But a day or two from landfall, we saw the track was shifting, and the impact would be in other areas,” he said. The logistics planners quickly adjusted to revise their response plan.
Ultimately, the greatest damage was to Fort Myers, about 125 miles south of Tampa on the Gulf Coast. “Once it was safe to travel,” said O’Connor, “employees from all our divisions—some several hundred miles away—went to Fort Myers to help with damage assistance.”
Once workers arrived, they drove through every neighborhood and often went door to door. Their purpose was to make sure the system was safe and to identify and respond to any damage. Remote system monitoring and gas controls showed the gas system withstood the storm impact, but damage to homes and businesses required a “boots on the ground” response.
Despite the hurricane’s changed trajectory, utility operators had been able to prevent problems. Correctly predicting that Fort Myers Beach would see a lot of devastation, “we proactively turned off the gas supply to that geographic area,” O’Connor said.
While entire homes were demolished in Fort Myers Beach, the utility found that its system remained in excellent shape. Even flooded meters remained operational.
A post-mortem showed that TECO Peoples Gas accomplished its goal of protecting customers and public safety. “The key is strong preparation and great team members being willing to jump in as needed,” O’Connor said. “Our natural gas system exemplified its resiliency and why so many Floridians rely on us.”
Meyer is enthusiastic about the industry’s ability to respond quickly and effectively to the challenges of climate change, as it has to so many other changes since the establishment of the first gas utility in 1816.
“It’s a complex situation but a very interesting one, and a challenge we can meet head on,” he said. “We’re looking at an all-solutions approach—including RNG and hydrogen, and wind, solar and geothermal. A fully integrated system can make sure we have a safe, affordable, resilient and sustainable grid—without leaving anyone behind.”
The Microgrid Solution
An emerging resiliency strategy is the microgrid—a miniature power grid independent of larger power line systems and fueled by high-efficiency natural gas generating equipment. In February 2021, a massive winter storm in Texas demonstrated the value of microgrids during unprecedented and unexpected weather events.
Millions of Texas utility customers lost power when extreme cold interrupted the state grid system. During an eight-day period, microgrids operated by Enchanted Rock fueled 143 customer sites for nearly 5,000 outage hours, in addition to returning power to the main grid.
In other parts of the country, microgrids at large grocery chains have also helped keep point-of-sale equipment and freezers running during power outages—while inviting community members in to charge phones, connect with family members and purchase hot food.
According to Enchanted Rock, microgrids are popular with hospitals, water providers and data centers, where uninterrupted energy is essential. For natural gas utilities, they offer an opportunity to help customers keep emergency equipment and computer systems operating by fueling modern generating equipment. According to a white paper presented by the company, microgrids can also protect electric heating customers from the potentially lethal effects of extreme cold, while reducing pollutants and carbon associated with diesel generators.
For the full report, Enhancing and Maintaining Gas and Energy System Resiliency, by the American Gas Foundation and Guidehouse, visit gasfoundation.org/2022/10/14/enhancing-and-maintaining-gas-and-energy-system-resiliency.