Duke Energy Florida Gears Up for the Coming Storms

Challenge 

Some of the most destructive hurricanes in recorded history have hit Florida, sometimes with dire consequences for utilities, such as in 2017, when Hurricane Irma knocked out power to 6.7 million customers—almost two-thirds of the state. In 2019, the Florida Legislature passed a bill requiring every utility to create a 10-year storm protection plan that hardens and increases the resilience of electric transmission and distribution facilities to extreme weather events through managing vegetation, installing sturdier overhead wires and poles, and undergrounding distribution power lines. With assets such as poles and power lines exposed to high winds and falling trees, and transformers and substations vulnerable to storm surges and flooding, Duke Energy Florida had already implemented several programs to reduce outages and restoration costs. But the new legislation meant the company needed to develop a longer-term plan that reflected a systematic approach to enhancing resilience and reliability, while also ensuring overall program investments were reasonable and benefited customers. 

Solution 

Duke Energy Florida turned to Guidehouse to help evaluate its options and craft a rigorous 10-year storm protection plan aiming to build resilience, deliver value to customers, and comply with regulatory requirements while reducing both customer service interruptions and storm restoration costs. Guidehouse’s first task was to identify and quantify extreme weather risk across all transmission and distribution system assets. The team modeled three hurricane scenarios, one based on empirical average observed weather hazard frequency in the territory, a second increasing the annual chances of storm strike by 10%, and a third increasing them by 25%. With asset exposure risks understood, the team then quantified the exposure risk and the value of mitigating investments. Guidehouse utilized industry-recognized methodologies to conduct a cost-benefit analysis of each of the proposed distribution and transmission hardening programs. Investment program benefits included reduced customer outages, decreased restoration and facility replacement costs, and lower operations and maintenance expense for hardened assets. Costs included capital expenditures, operation, and maintenance of new programs and investments. Finally, Guidehouse worked closely with Duke Energy Florida to develop a prioritized 10-year road map and detailed three-year investment plan that recognized funding, timing, and resource constraints. Duke Energy Florida was then able to develop a practical program implementation plan that reflected its understanding of community needs, technology risk, and customer experience to deliver maximum value and reduce customer disruptions in a cost-effective way.

Impact 

Drawing on in-house multidisciplinary expertise, Guidehouse united and merged over 750 GB of data across six major systems, extensive proprietary modeling, and billions of dollars of resilience investments into a clear but comprehensive storm protection plan, which Duke Energy Florida filed for regulatory approval in 2020. Guidehouse professionals then supported the utility through the regulatory filing of the plan, which involved hundreds of data and evidentiary requests from a diverse range of stakeholders and interest groups. The commission approved Duke Energy Florida’s storm protection plan, enabling the company to move forward with proposed investments that will harden its systems against extreme weather, reduce power outages, and benefit customers.