Page 16 - CARILEC CE Industry Journal_Oct_2019

While many small island systems could already be called FINANCIAL CONSIDERATIONS
microgrids, even smaller microgrids consisting of
distributed generation, energy storage, and energy Cost-benefit Analysis
management systems can be configured to operate in An important element in making wise investment
parallel with the grid but also to operate independently as decisions is to evaluate resiliency strategies and solutions
a complete “islanded” electricity system during outages. against the costs and benefits to customers over the
Microgrids are typically end-user, customer driven and long-term.
funded, however, in some cases, utilities are involved,
specifically in the case of two-way systems (interoperable Reviewing vulnerabilities to the system and the potential
systems) and security. Microgrids can reduce peak solutions with related costs is the first step. According to
demand and load growth, as well as help utilities defer the U.S. Department of Energy Outline for
additional power capacity investments. Climate-Resilience Assessment Framework, utilities can
develop resilience plans that identify system threats and
The caution here is that where these microgrids or assess a variety of resilience solutions based on the costs
distributed generation systems are utility owned, they and impacts of each option using both a
are, in essence, redundant systems and therefore will cost-effectiveness and risk management perspective.
lead to corresponding increases in overall cost, both
capital and operational. Strong Financials
It’s equally important for a utility to maintain a healthy
Remote monitoring and control. Utilities can combine financial position including profitability and a strong
information technology and automated monitoring to limit balance sheet. Demonstrating sound financial
customers affected by outages. Reclosers, switches, and performance allows a utility to access capital more readily
sectionalizers limit the spread of outages and allow faster for restoration efforts.
service restoration.
Self-insurance
Smart grid technologies can detect outages and remotely While commercially viable insurance of the transmission
reroute electricity to undamaged circuits and feeders. and distribution systems is unobtainable in the
Automated distribution technologies allow faults to be Caribbean, utilities can maintain a fund for disaster
isolated and power to be rerouted in order to minimize the recovery costs to help mitigate financial constraints after
number of impacted customers. a catastrophic weather event. Securing sufficient
hurricane reserves in advance through electricity rate
As utilities implement resiliency plans, monitoring mechanisms acts as a self-insurance measure, and will
implementation progress and costs will be critical to avoid the need for sudden rate increases to recover
assess impacts and effectiveness for reliability, restoration costs and prevent post-event financial trauma
sustainability, and affordability. to customers. Being prepared to pay for restoration efforts
ahead of time helps to speed recovery activities while
minimizing customer rate impacts.
RESTORATION PLANNING
Prudent Pacing of Service Restoration
Many utilities have instituted formal processes involving Rebuilding of an electric system needs to be done
multiple regions for responding to major outage events commensurate with the reconstruction of the local
and restoring power quickly. Sufficient utility crews, communities, homes, and businesses. If the island’s
equipment, and fuel are critical to restoration efforts. residents have not recovered and rebuilt, then it’s prudent
According to a recent EEI study, “Utilities must measure to pace the restoration efforts to meet the actual customer
the costs of having available crews compared with the demand. The utility’s disaster management plan needs to
costs of extended outages due to insufficient numbers of balance restoring full operations and service as quickly as
prepared crews.” In the Caribbean, the Disaster possible against the associated costs and the actual
Assistance Program implemented by the Caribbean customer demand for electricity. Otherwise, the utility
Electric Utility Services Corporation (CARILEC), ensures can face shortfalls in revenue at the same time as
that crews from regional sister utilities are available to incurring significant expenses which will negatively
support each other in disaster relief efforts. impact the utility’s financial health. Strategic restoration
plans that coincide with the actual recovery activity in the
In addition, standby equipment can be used, including service territory may help to better facilitate efficient
mobile transformers, mobile substations, and mobile restoration efforts.
generators that can enable quicker temporary restoration
of electricity service while more extensive repairs are
conducted.

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