130 1 BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION 2 3 DOCKET NO. UNDOCKETED In the Matter of 4 ELECTRIC UTILITY INFRASTRUCTURE 5 WORKSHOP. ________________________________/ 6 7 8 9 10 11 12 ELECTRONIC VERSIONS OF THIS TRANSCRIPT ARE A CONVENIENCE COPY ONLY AND ARE NOT 13 THE OFFICIAL TRANSCRIPT OF THE HEARING, THE .PDF VERSION INCLUDES PREFILED TESTIMONY. 14 15 VOLUME 2 16 Page 130 through 279 17 PROCEEDINGS: Electric Utility Infrastructure 18 Staff Workshop 19 DATE: Monday, January 23, 2006 20 TIME: Commenced at 9:00 a.m. Concluded at 5:41 p.m. 21 PLACE: Betty Easley Conference Center 22 Room 148 4075 Esplanade Way 23 Tallahassee, Florida 24 REPORTED BY: JANE FAUROT, RPR Official FPSC Reporter 25 (850) 413-6732 FLORIDA PUBLIC SERVICE COMMISSION 131 1 I N D E X 2 PAGE 3 PRESENTATIONS BY: 4 MICHAEL SPOOR 132 5 DAVID McDONALD 181 6 ALAN SHAFFER 215 7 PAUL DAVIS 234 8 CHRISTIE MIREE 250 9 MARK CUTSHAW 271 10 MICHELLE HERSHEL 275 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 FLORIDA PUBLIC SERVICE COMMISSION 132 1 P R O C E E D I N G S 2 (Transcript continues in sequence from Volume 1.) 3 MS. HELTON: We have heard from the local governments 4 and some technical experts during the morning session, and now 5 we're going to turn to the utilities to hopefully learn some 6 things about what has happened in the state the last couple of 7 years, at least, and to hear what ideas they might have for 8 mitigating any future damage in the next upcoming storm seasons 9 that unfortunately we have been told could be just as bad if 10 not worse than the ones we have had the last two years. 11 We are not going to keep a tight time frame this 12 afternoon like we did this morning. We have asked the 13 utilities to work among themselves to kind of decide how much 14 time they each needed, but we are also not going to be perhaps 15 as polite as we were to the presenters this morning in that we 16 envision interrupting you and asking questions as you are going 17 along. I think that that might give us a little bit more 18 meaningful dialogue. 19 So first up is Michael Spoor with Florida Power and 20 Light. 21 MR. SPOOR: Thank you. Good afternoon, everyone. 22 Before I get started, actually, on the Florida Power 23 and Light presentation, I would like to just say a couple of 24 opening remarks on behalf of all of the IOUs. As was 25 mentioned, my name is Michael Spoor. I'm the Director of FLORIDA PUBLIC SERVICE COMMISSION 133 1 Distribution System Performance for Florida Power and Light. 2 I'm responsible for distribution reliability and hardening and 3 emergency preparedness. 4 A couple of points that I do want to make in regards 5 to, again, on behalf of all the invest-owned utilities. First, 6 we recognize the impacts of the 2004 and 2005 hurricanes on 7 Florida's electrical system. And, more importantly, the 8 impacts it has had on our customers and actually the 9 communities that we, ourselves, live in. Because of this, it 10 is time to take a fresh look at these ideas. And so, 11 therefore, all of the IOUs endorse this effort and agree that 12 it is critical for Florida's economic vitality and the security 13 moving forward. 14 We compliment the PSC and Staff for undertaking this 15 effort, and certainly appreciate the opportunity to participate 16 in today's workshop and any activities that may be happening 17 moving forward. Florida's investor-owned utilities have 18 extensive experience and are ready to actively and 19 constructively help evaluate infrastructure alternatives that 20 work for Florida. For this process to ultimately provide the 21 best results, we must take time to understand all of the facts 22 and options to ensure that whatever changes we make are truly 23 for the better. 24 So now I would like to speak specifically about FPL. 25 With me here today are some of our technical engineers from FLORIDA PUBLIC SERVICE COMMISSION 134 1 both our transmission and distribution groups if there is, by 2 chance, a question that I may not be able to answer that they 3 may be in a better position to answer. In addition to my 4 presentation today, the staff had asked a series of questions 5 in advance of this workshop which I believe we provided 6 detailed responses already in advance. 7 MS. HELTON: Let me say, I think those responses have 8 been handed out today and also are available on the web. And I 9 have learned, since I made an announcement this morning that 10 everything was available on the website as of this morning, 11 that wasn't exactly true. We are having some technical 12 difficulties with Gulf Power's presentation, not because of 13 what Gulf Power gave to us, but because we are just having 14 computer issues that are larger than that. So hopefully by 15 tomorrow Gulf Power should be up, as well. 16 MR. SPOOR: I want to first start out by providing 17 some specifics about our service territory in Florida. We have 18 facilities along the east coast from Georgia all the way down 19 through Miami-Dade County. And on the west coast, we serve 20 just below Tampa all the way down through Naples and Fort 21 Myers. We have a growing system. In fact, for the last 22 several years we have been adding over 100,000 customer 23 accounts to our service territory. We have a very large 24 infrastructure, which includes over 68,000 transmission 25 structures, over 800,000 distribution transformers, and over FLORIDA PUBLIC SERVICE COMMISSION 135 1 one million distribution poles that serve 4.3 million customer 2 accounts in the state. 3 My presentation today will cover our experiences from 4 the 2004 hurricane season and how those storms impacted our 5 infrastructure and customers. Next I'll talk about some 6 lessons that we learned from the '04 season, specifically ones 7 that we were able to apply to the 2005 season. Following that, 8 I will cover this past year's experiences and certainly, again, 9 how it impacted our system and our customers. What lessons we 10 might have learned already from the 2005 season, but more 11 importantly, what are the next steps that we need to take in 12 this initiative. 13 I think it's important to start, first, by providing 14 a recap, certainly going back to last season, or the '04 season 15 in terms of hurricanes. We believe this approach will only 16 work if, first, we recognize where we have been, where we are, 17 and then certainly where we need to go. 18 In 2004, FPL's service territories were impacted by 19 three direct hits by hurricanes. The first was Hurricane 20 Charley made landfall on the west coast of Florida on August 21 13th, 2004, as a Category 4 with winds of 145 miles an hour. 22 The hurricane force winds spread out over 60 miles and tropical 23 storm force winds were 210 miles wide. Charley was a 24 fast-moving storm. It impacted not only our west coast with 25 hurricane force winds, but also exiting near Daytona Beach FLORIDA PUBLIC SERVICE COMMISSION 136 1 still as a strong hurricane. 2 Not soon after we completed our restoration efforts 3 for Charley, we were again impacted by a second hurricane, 4 Hurricane Frances, which made direct landfall in our Treasure 5 Coast area. Again, Frances was a very large hurricane. 6 Hurricane force winds were spreading out over 145 miles and 7 tropical storm force winds 345 miles wide. In essence, our 8 entirely 27,000 square mile service territory was impacted by 9 this hurricane. 10 Not only was it a big hurricane, but it was a 11 slow-moving hurricane. In fact, some of us that were involved 12 with it wondered if it was ever going to move off us. Well, 13 thank God it did 60 hours later, so we could effectively begin 14 our restoration efforts. 15 The last hurricane of the '04 season that had direct 16 impact on us was Hurricane Jeanne, which made landfall in 17 almost the exact area as Hurricane Frances did just a few weeks 18 earlier. Again, hurricane force winds extended 125 miles out 19 with tropical storm force winds at 315 miles wide. 20 Again, as part of the materials we have provided 21 already in advance we furnished maps that break down the 22 equipment repaired by FPL management area and/or region. This 23 slide here shows a cumulative summary of all the equipment we 24 repaired for the three 2004 hurricanes for the entire T&D 25 infrastructure. I don't want to necessarily highlight or go FLORIDA PUBLIC SERVICE COMMISSION 137 1 through the entire list, but there are a couple that I would 2 like to highlight for everyone here today. 3 First is in terms of distribution poles. Just over 4 10,000 poles out of the one million that we have in our service 5 territory were replaced through all three hurricanes in the '04 6 season. This represents about one percent of the million poles 7 that we have in our pole population. 8 Our analysis after the hurricanes determined that the 9 majority of these poles broke due to falling trees and flying 10 debris, certainly a significant factor. Keep in mind that 11 these three hurricanes did have limited storm surge. In 12 essence, these were hurricanes that certainly had high winds, 13 but at least our service territory did not see the typical 14 impacts that you may have involving storm surge. I believe one 15 of the IOUs later today may be able to share a different 16 experience that they had in terms of storm surge on their 17 electrical grid. 18 For our transmission system, less than one percent of 19 the over 68,000 structures replaced were replaced during all 20 three hurricanes, with less than .1 percent of these structures 21 being replaced at any one storm. Although, as you can see on 22 this slide there was some substation equipment that was 23 replaced, none of the substations were damaged to the extent 24 that they were inoperable for the storms. 25 As has always been the practice at FPL, after the FLORIDA PUBLIC SERVICE COMMISSION 138 1 2004 hurricane season we conducted a thorough lessons learned 2 assessment to not only identify what we did well, but more 3 importantly what lessons and what things we needed to do to 4 improve on our performance moving forward. To help us with 5 this effort, we hired a third-party consultant to assist in 6 evaluating our system performance as well as our restoration 7 processes. A copy of their report that they completed again 8 has been provided to staff as part of our advance responses to 9 the questions that you had asked. 10 Some of their key findings, though, were that FPL met 11 or exceeded standard utility restoration practices. FPL's 12 distribution, transmission, and substation facilities performed 13 well, and their comment, concluding comment was that they 14 believed that no other North American-based utility that they 15 were familiar with had restoration plans and practices in place 16 that could have successfully restored customers in a six-week 17 time frame after three major back-to-back disasters. 18 They did provide recommendations in terms of 19 opportunity for improvement, which several have been 20 implemented in time for this past 2005 season. Some of the key 21 ones are listed here. Specifically, certainly communicating 22 with our customers in terms of estimated time of restoration, 23 providing them better information at a lower level in terms of 24 when they can expect to have their service restored. 25 Secondly, establishing a better partnership with the FLORIDA PUBLIC SERVICE COMMISSION 139 1 local EOCs to identify the critical infrastructure that is key 2 to bringing up on the front end of these hurricanes to get the 3 communities back up and running. 4 Lastly, was certainly a key one, which was to 5 establish partnerships in terms of resources. You heard 6 earlier today from a representative from EEI the criticalness 7 of mutual aid assistance. This was a key enhancement to 8 continue to leverage those alliances with other utilities. 9 In addition to the third-party consultant review, we 10 also conducted our own internal reviews. For distribution, 11 although we believe we had good data after the '04 season, we 12 recognized that there was an opportunity to obtain even better 13 data. So one of the key learnings that we had was the 14 development of what we called forensic teams, which were, in 15 essence, our product engineers being able to go out immediately 16 after a storm has passed, when it's safe, to gather firsthand 17 information on the ground, if you will. And you will see later 18 where that has been a critical feed to our analysis after the 19 '05 season. 20 For our transmission and substation system, there 21 have been several initiatives that are or have been 22 implemented. Again, several of those details have been 23 provided in advance to the responses to the questions that were 24 asked by Staff. It's important to emphasize that these parts 25 of our transmission systems that did have activities completed FLORIDA PUBLIC SERVICE COMMISSION 140 1 after the '04 season actually performed quite well for the '05 2 storm season. 3 In 2005, there were four hurricanes that actually 4 impacted our service territory, two with the outer bands 5 sweeping across our service territory, which were Dennis and 6 Rita, and certainly having an impact on our customers, and then 7 two direct hits. 8 On the evening of August 25th, Hurricane Katrina made 9 landfall near the Broward/Miami-Dade line. It made landfall 10 with hurricane force winds of 80 miles an hour which intended 11 over most of Southern Florida, which happens to be our most 12 densely and highest populated areas. Tropical storm force 13 winds extended out 160 miles. 14 Hurricane Wilma, which became a hurricane on October 15 18th, grew in strength to a Category 5 on October 19th, 16 registering the lowest central pressure ever, and therefore the 17 most powerful hurricane on record in the Atlantic basin. It 18 made landfall on the southwest coast of Florida near 19 Marco Island on October 24th as a strong Category 3. It 20 crossed the state quickly and exited just north of Palm Beach 21 as a Category 2 hurricane. Hurricane force winds again 22 extended out 125 miles from the center and tropical storm force 23 winds out over 200 miles. 24 In addition to impacting our customers on the west 25 coast, Wilma also impacted our customers in the tri-county FLORIDA PUBLIC SERVICE COMMISSION 141 1 area, Palm Beach, Broward, Miami-Dade. Although Hurricane 2 Wilma was not the strongest hurricane ever to hit our service 3 territory, I believe many of us believe it was certainly one of 4 the most challenging to provide restoration to our customers. 5 Again, in our written responses we have provided the 6 equipment that we replaced at a regional or management area for 7 the 2005 season, and here are the cumulative totals. Again, 8 there are just a couple that I would like to highlight. The 9 first being that just under 13,000 distribution poles, or again 10 around one percent of our total one million poles were in need 11 of replacement with the cumulative of the hurricanes of 2005. 12 This is both for FPL and non-FPL poles. 13 For our transmission system, no structures needed to 14 be replaced during Hurricane Katrina and those structures that 15 were replaced as a result of Hurricane Wilma were located in 16 the center part of the state near Belle Glade, with the 17 majority of the damage occurring on just a few line sections. 18 Just as in 2004, minimal substation equipment needed 19 to be replaced, however, eight of the substations, or 1.5 20 percent of the total substations were inoperable for a short 21 period of time after Wilma until this equipment could be 22 replaced. 23 Just as we did in 2004, we again have begun an 24 exhaustive and comprehensive lessons learned to really review 25 and understand how we can improve moving forward. Immediately FLORIDA PUBLIC SERVICE COMMISSION 142 1 following the restoration effort, we retained an 2 internationally recognized outside consulting firm, KEMA, to 3 perform a review of the FPL facilities after Wilma to better 4 understand if the transmission and distribution systems 5 performed appropriately. 6 Earlier today, just before lunch, you heard from 7 Doctor Richard Brown with KEMA, who led this effort. The key 8 areas that KEMA evaluated as part of our review are shown here 9 on this slide. This review is not only covering the 10 infrastructure performance, but it also reviewed our standards 11 and compliance with the NESC, which there has been some 12 discussion this morning about, the quality of the poles that we 13 purchased, our pole maintenance practices, as well as an 14 industry benchmark with other utilities that may be subject to 15 areas of impact from hurricanes. 16 KEMA utilized an extensive amount of data, including 17 the forensics data I highlighted before, to draw their 18 conclusions and issue their final report. That final report 19 was completed just over a week ago, and we have included it not 20 only as part of our direct testimony in a docketed matter, but 21 also I believe there are copies that have been presented here 22 today, as well. 23 The key finding of the KEMA report was that FPL's 24 transmission, substation, and distribution systems are designed 25 to meet or exceed all safety standard requirements, and during FLORIDA PUBLIC SERVICE COMMISSION 143 1 Wilma performed as expected and in accordance with FPL's 2 standards. In fact, they recognized that FPL's distribution 3 standards require poles that are 50 percent stronger than 4 required by the NESC. 5 As I mentioned, the final KEMA report was just 6 completed a week ago, barely two months after we completed 7 restoration efforts for Hurricane Wilma. We are now in the 8 process of reviewing those findings. More importantly, we are 9 now in the process of what we consider entering the next phase, 10 and that next phase is about further exploration to harden our 11 infrastructure. 12 As I showed you earlier before, the system 13 performance after the '04 and '05 hurricane seasons, both of 14 which were unprecedented, recognize or showed that our system 15 performed well. But as we have been saying here today, if 16 indeed the weather has changed, so must we. 17 We are currently in the process of now working with 18 KEMA to provide assistance in developing what we are calling a 19 hardening road map. And what this is really about is to what 20 extent do we want to harden the system, where we are now, and 21 the steps that we must take to get there. There has been some 22 talk this morning that, you know, there is no silver bullet. 23 It would be great to have one. 24 However, we do believe that there are opportunities 25 that we must explore. We must keep in mind that although there FLORIDA PUBLIC SERVICE COMMISSION 144 1 is no single answer, that we must evaluate several items, some 2 of which Doctor Brown mentioned, many of which are listed here, 3 as just examples of areas that we must explore. In essence, we 4 have to take the probabilistic benefit of what some of these 5 items may do and certainly evaluate that against the cost. 6 Additionally, this will be a long process. I think this 7 morning it was highlighted, we certainly through this process 8 need to determine what we can do in the short-term and then 9 what we can do in the long-term, and we support that approach. 10 FPL believes this is the right thing to do. If 11 indeed, again, we are entering a period of heightened hurricane 12 activity, we must take a fresh look at these ideas. We at FPL 13 assure you that we will continue to support these efforts and 14 we will share our plans as we continue to develop them in the 15 coming weeks and months. 16 That concludes my formal presentation. 17 MS. HELTON: Mr. Spoor, I think that we have some 18 questions for you. 19 Mr. Trapp. 20 MR. TRAPP: Mr. Spoor, I'm Bob Trapp of the Economic 21 Regulation Section. I just have a few questions I would like 22 to direct your way, if I could. 23 MR. SPOOR: Certainly. 24 MR. TRAPP: Staff has looked at residential rates 25 being charged by Florida Power and Light, and we note that the FLORIDA PUBLIC SERVICE COMMISSION 145 1 transmission component in the residential rates is roughly 4.3 2 percent total rates. We notice that distribution is about 15.8 3 percent total rates, so together we are only talking about 20 4 percent of the bill being represented by transmission and 5 distribution costs to the typical residential customer. So 6 that means that 80 percent of the system cost is going into 7 power plants and fuels for those power plants. Can you give me 8 some assurance or some feel that because you are only 9 20 percent of the dog, that you are giving the appropriate wag? 10 MR. SPOOR: Sure. I think that is a fair question. 11 And certainly I don't mean to stand up here and understand 12 everything about our rate structures, I will certainly leave 13 that to our rate structure department. In terms of investment, 14 though, as we have stated before, we have been investing in our 15 system. Certainly I think since 1998 we have invested over one 16 billion dollars alone in just the distribution infrastructure. 17 So we believe we are making the appropriate investments for the 18 world that we have lived in in terms of normal reliability. 19 Now, again, certainly as I mentioned, with the 20 weather changing, as it has changed we acknowledge that we must 21 take a fresh look in terms of what we are doing to our system. 22 So I recognize certainly that, you know, and certainly when we 23 develop our plans in the coming weeks and months, that we will 24 be looking at all avenues in terms of what we are currently 25 doing and then just certainly as important what we need to do FLORIDA PUBLIC SERVICE COMMISSION 146 1 in the future. 2 MR. TRAPP: What about maintenance costs, have they 3 been on the increase? Have your budgets reflected increased 4 commitment to maintenance in the field for distribution in 5 particular, and also transmission? 6 MR. SPOOR: I can't speak for the transmission side, 7 but certainly in distribution. In fact, I know just this year 8 alone our vegetation budgets, I believe, are increasing in the 9 magnitude of 20 percent over what they were even last year, 10 which has already been increasing. So, in terms of investing 11 in our infrastructure, we certainly have been investing 12 dollars, yes, sir. 13 MR. TRAPP: But how long has that commitment taken 14 place? Has it just been the last two years as a result of 15 these hurricanes, or how does it compare to budgets ten years 16 ago? Are we keeping up with at least inflation? 17 MR. SPOOR: Well, again, I can't speak for some of 18 the funding levels ten years ago, but I can tell you dating 19 back as far as 1998 when we made a concerted effort to improve 20 our reliability, centralizing our efforts, and certainly doing 21 a more targeted approach in terms of how we can best spend our 22 money to get the biggest bang for our buck on our system, I can 23 tell you each and every year I believe those level of 24 investments have certainly been to a level that, again, as you 25 look at our performance, has certainly helped in our FLORIDA PUBLIC SERVICE COMMISSION 147 1 estimations. 2 Again, that is not to say moving forward do we need 3 to explore other opportunities, I think my opening comments, as 4 I said, I think we certainly welcome the opportunity to work 5 with staff to understand if, indeed, there are things we can 6 do, again, to get the biggest bang for our buck. 7 MR. TRAPP: In terms of some of the speakers this 8 morning, we heard from -- let me look at my agenda. We heard 9 from Mayor Castro of Dania Beach, who offered what sounded to 10 me like good business practice feedback from the local 11 community that you serve. Some actual input from your 12 customers and the opportunity to work one-on-one with them to 13 pre-identify such things as vegetation management, discuss 14 openly undergrounding, hardening issues, and things of that 15 nature, and she indicated that she had put a proposal forward 16 to Florida Power and Light. Are you familiar with that 17 proposal? 18 MR. SPOOR: I'm personally not familiar with that 19 proposal, but I can tell you when she was talking I was taking 20 notes. And I'm sure if I don't reach out to her quickly, 21 somebody from FPL, if they haven't already, certainly will. I 22 concur. I think she had some great ideas in terms of working 23 with the local communities in that area. 24 MR. TRAPP: In addition to the community of Dania 25 Beach, could I ask you to look more globally up and down your FLORIDA PUBLIC SERVICE COMMISSION 148 1 east and west coast and perhaps look at the concept of better 2 coordination/cooperation and get some input from those people? 3 MR. SPOOR: Certainly. I know other communities that 4 we are certainly engaged in conversation with and wanting to be 5 great working partners with them to ultimately improve things 6 moving forward. 7 MR. TRAPP: We also heard from the universities, and 8 there seems to be a lot more than I thought was going on in 9 terms of data collection with respect to coastal and inland 10 wind speeds and the effects on structures within the state. 11 What is Florida Power and Light doing in the area of working 12 with the educational community? 13 MR. SPOOR: Well, I believe Doctor Domijan from the 14 University of South Florida highlighted a project that we have 15 been engaged with them. It is really a research and 16 development program. To date, that has really kind of taken a 17 look at weather in terms of what it means to our day in/day out 18 reliability. Certainly, a question that can be asked is can 19 that be expanded to times of hurricanes? And although I don't 20 know if the definitive answer is yes, it is certainly an area 21 of exploration. 22 MR. TRAPP: I think Doctor Gurley outlined a program 23 that he is doing primarily in conjunction with the Department 24 of Community Affairs that is testing the impact of wind speeds 25 on building codes within Florida, and it just occurred to me FLORIDA PUBLIC SERVICE COMMISSION 149 1 that if the University of Florida can do wind tunnel tests on 2 models of residential homes, why can't they do the same thing 3 for poles and lines. Have you explored that? 4 MR. SPOOR: We have not explored that particular 5 option. But certainly, again, it was a very compelling 6 presentation and certainly an area of exploration. 7 MR. TRAPP: I know that there are certain rivalries 8 that occur within the colleges within the Florida system, but 9 it seems even the University of Miami might have something to 10 offer in terms of -- 11 MR. SPOOR: We actually do have -- in addition, as 12 Doctor Domijan had highlighted, even when he was at UF we were 13 still working on the project with them, and now he has moved to 14 the University of South Florida. We actually even have another 15 program that -- again, not necessarily related to hurricanes, 16 but in terms of weather, with FSU. So we do certainly try to 17 support and work with the local talent that we have in our 18 universities across the state. 19 MR. TRAPP: I think my staff has probably more 20 in-depth reaching questions, but I had just a couple overall, 21 and I think Connie wants to ask one before I turn it over to 22 staff, or before Mary Anne turns it over, Madam Chair. 23 I am a little concerned -- I want to ease my mind -- 24 of are we just focusing on what has occurred in the last two 25 years because of the hurricanes, or are we constantly aware of FLORIDA PUBLIC SERVICE COMMISSION 150 1 the problems of reliability, and concerns, and impact of 2 reliability on the citizens of Florida? And I wondered if you 3 could speak briefly on what that does Power and Light really do 4 in terms of being out there, looking at issues such as how do 5 you inspect your poles on a normal routine basis, how do you 6 inspect your lines on a routine normal basis, how do you 7 address vegetation issues? Could you give me just kind of a 8 brief overview of what is normal before we talk about what 9 maybe we need to react in terms of extra normal for hurricanes? 10 MR. SPOOR: Normal in terms of -- I mean, I guess if 11 I understand your question correctly, you know, it is part of 12 our annual reliability plans. They are made up of several 13 components that we believe touch our infrastructure in terms of 14 the conductors, the vegetation. Again, we do not have just one 15 program that would address one part of our system. It is 16 really a portfolio of reliability initiatives that we have been 17 deploying, executing, tracking for several years now. 18 So in terms of what we are doing for reliability, I 19 do believe we have those types of programs. I don't know if 20 there is one specific that you would like me to respond to, but 21 I guess my comment is, again, it is not just one specific 22 reliability initiative that we have. We believe we have a 23 fairly robust portfolio, if you will, of reliability 24 initiatives not only dealing with our overhead infrastructure, 25 but also our underground infrastructure. We invest a lot FLORIDA PUBLIC SERVICE COMMISSION 151 1 annually on maintaining our underground infrastructure in terms 2 of replacing aged cable, injecting aged cable, so there are 3 several things that we do, we believe, to touch our 4 infrastructure. 5 MS. KUMMER: This is Connie Kummer with the 6 Commission staff. There are just a couple of points I wanted 7 to raise. You made the statement several times that FPL had 8 met the standards. We heard this morning that as a 9 non-engineer, to me it sounded like standards are really kind 10 of a moving target. We heard that loading on the poles makes a 11 difference, weather makes a difference, combination of things. 12 When you say "meet standards," are you looking at something 13 other than just the bare pole sitting out there when you 14 evaluate whether you meet the standards? 15 MR. SPOOR: It is a good question. When I reference 16 or make a comment in terms of meeting standards that is as we 17 build our system. So that would be including those 18 attachments, the equipment we may hang on the poles in terms of 19 are we meeting the standards end state, or once everything is 20 built, if you will. 21 MS. KUMMER: And given that we still are having some 22 problems, have you looked at whether or not the standards ought 23 to be changed, ought to be increased? I note that you said 24 some of them are built to 50 percent greater. Have you 25 explored that as a possibility? FLORIDA PUBLIC SERVICE COMMISSION 152 1 MR. SPOOR: We certainly believe that, again, 2 although there is no silver bullet, I think it is an area that 3 we will look at. You know, I think part of what we are 4 concerned with, that it is not going to be just about a design 5 change, though. Certainly, and, again, I welcome the comments 6 from some of the community leaders today, specifically the 7 Mayor of Dania Beach. It is about how our system coincides, if 8 you will, with vegetation management in their communities. 9 Although putting stronger poles in, more poles, 10 shorter spans could ultimately be some of the solutions or part 11 of the things that we could consider to harden the system, we 12 also must recognize that, you know, a robust vegetation 13 management program, and that is not just necessarily the 14 utility trimming more trees, but it is certainly promoting our 15 right tree/right place, making sure that, again, both the 16 standards and where we build our system in terms of vegetation 17 that they both can coexist. 18 MS. KUMMER: And the last question. You mentioned on 19 your last slide, I think, that you are working to develop a 20 road map. Do you have a timetable when you expect that to be 21 in some kind of concrete form? 22 MR. SPOOR: We have not mapped out the time frame. I 23 know that we are -- just as we did with the final KEMA report 24 that just came out, we are fast-tracking that as quickly as 25 possible. I think all of the IOUs recognize that June 1 is FLORIDA PUBLIC SERVICE COMMISSION 153 1 right around the corner. So in terms of things that we may be 2 able to do this year and things we may be able to do longer 3 term, we recognize it is of an urgent nature. 4 MS. HELTON: Bill, did you have -- 5 MR. McNULTY: Yes, I believe both myself and Jim 6 Breman from staff have questions. And there may be additional 7 questions, as well. 8 MS. HELTON: And I want to remind the audience, if 9 you have any questions, if you would please put them on the 10 index cards so that Staff can ask them. 11 MR. McNULTY: Good afternoon, Mr. Spoor. I have just 12 a few questions. 13 One of them has to do with the response to a data 14 requests that went out related to this workshop, and I think 15 the very first question is actually covered in your 16 presentation, which is the damages that were done and the 17 various facilities that were replaced as a result of the 18 storms. 19 And I guess a general question I would have is that 20 is all good information to have. We see that it looks like the 21 preponderance of the data would indicate that distribution was 22 the larger infrastructure hit, but that transmission had an 23 important part of the storms, the recent storms, at least for 24 2005, and I'm sure for 2004, as well. 25 I guess my basic question is to what extent does data FLORIDA PUBLIC SERVICE COMMISSION 154 1 exist to be able to look at the time frames for the 2 restorations of the different types of components. For 3 instance, you had major transmission structures that were down, 4 and you had to restore those, and the priority listing as we 5 know from your data responses says that you have to get your 6 transmission up first and then you have to move down the line. 7 I'm wondering if there is a possibility of data that the 8 utilities have, and FPL in this case has that would say we can 9 create a Gantt chart, some sort of a schedule that would show 10 how long it took to get transmission back up and running, how 11 long it took to get, you know, transmission substations, and 12 then all the way down the line, all the way to the service 13 drops to see if there is a blockage there. Some sort of 14 bottleneck that says, you know, we have these thousands of 15 people from around the country that are in our service 16 territory working right now and our real bottleneck is this. 17 First of all, I want to kind of get a sense, 18 generally, if you know if there is a bottleneck? And then, 19 secondly, what kind of data would there be to support reviewing 20 that type of analysis? 21 MR. SPOOR: Yes. In terms of whether there is a 22 bottleneck or not, I'm not aware of any that exists in terms of 23 the restoration process. In terms of whether that data exists, 24 it is something we would just have to take a look at. I mean, 25 certainly the way we approach these storms in terms of FLORIDA PUBLIC SERVICE COMMISSION 155 1 restoration priorities, first and foremost our strategy is to 2 certainly get the generation and transmission systems back up 3 first and foremost, and then certainly working down to the 4 lower level devices. 5 You know, it has always been about restoring power to 6 the critical infrastructure in parallel to restoring power to 7 the parts of our system that can restore power to the most 8 amount of customers in the quickest and safest way. So it's 9 certainly something we would have to look at in terms of data 10 availability. 11 MR. McNULTY: And the reason I mention that is 12 because then that could help us focus on the type of equipment 13 that we would need to find the solutions for. Again, we have 14 heard the sentiment several times today there is no silver 15 bullet, but there certainly has to be areas to focus on. The 16 obvious thing that the eye is attracted to is 10,000 poles 17 down. But I'm wondering if there might be something to be 18 learned from if you have inventory data that says on day one 19 after the storm X number of transmission poles went out and 20 were replaced, and day two, and so forth, and so you can look 21 at and see on a day-by-day basis. That would be a data need 22 that I think that staff would like to review for the purposes 23 of seeing is there a bottleneck and how can we, you know, move 24 on from there to learn more about that bottleneck if there is 25 one. FLORIDA PUBLIC SERVICE COMMISSION 156 1 MR. SPOOR: Yes. I guess I would -- and certainly it 2 is something we can look into. Again, the term bottleneck, I 3 think, you know, our restoration plans, we certainly have 4 effectively been able to apply the resources, all of these 5 resources, as you mentioned, from around the country as they 6 come in to make them the most productive work force possible to 7 restore power to our customers. 8 MR. McNULTY: Right. And, of course, the idea being 9 that if it is replaced in a nonstorm sort of environment, the 10 costs for that go down. And, of course, then you also avoid 11 the outages, and that is the obvious concern there. 12 I think we heard a couple of times this morning, I 13 think Commissioner Falcone, and then expressed again by Schef 14 Wright the concern about, you know, what really affects the 15 reliability of the system, is it most distribution or 16 transmission, and that sort of thing. And I wondered if FPL 17 had done any studies on that? 18 MR. SPOOR: Studies in terms of, I'm sorry? 19 MR. McNULTY: There was the question about 20 reliability, the impacts of reliability versus the 21 transmission, versus the distribution segments; and 22 undergrounding, the undergrounding versus 23 transmission/distribution, and which one of those affects 24 reliability more. He said that he could find no information on 25 the reliability issues there. I was wondering if you had any FLORIDA PUBLIC SERVICE COMMISSION 157 1 information to share on that. 2 MR. SPOOR: Well, one of the difficulties, I think, 3 and, again, we continue to try to do that analysis in terms of 4 reliability differences, if they may exist, between overhead 5 and underground. And part of that challenge is certainly you 6 first have to define, you know, what is underground versus what 7 is overhead. I believe there was a slide from Doctor Brown 8 just before lunch that mapped out, you know, certainly you can 9 have parts of your system overhead, parts of your system 10 underground. You may have underground service in your 11 subdivision, but the lines that are feeding into those 12 subdivisions may be overhead. So to delineate, to say what 13 part of the system that is overhead, how is that performing 14 versus underground, we have not completed that analysis to be 15 able to say conclusively what that is telling us. 16 Again, a lot of that has to do with the hybridness, 17 if you will, of our system in that you may have an overhead 18 feed and you may also have part of the system that's ultimately 19 getting all the way down to your meter as underground. 20 MR. McNULTY: Is there a way to study the system such 21 that there may be pure overhead, pure underground and make 22 comparisons of those two different scenarios? 23 MR. SPOOR: We certainly would have to take a look at 24 that, if indeed those pure examples, as you highlighted, exist. 25 MR. McNULTY: Okay. Additionally this morning we FLORIDA PUBLIC SERVICE COMMISSION 158 1 heard from Homac manufacturing and their idea about breakaway 2 connectors. And I wondered at that time, you know, to what 3 extent FPL had analyzed those. It seemed like another example 4 of where is the bottleneck. There must have been thousands of 5 service drops that had to be replaced. How important is that 6 type of technology a solution for the two concerns that we are 7 here for today, which is storm costs and storm restoration 8 time? 9 MR. SPOOR: Well, that particular prototype we have 10 not been engaged actively with Homac. Of course we do do a lot 11 of business with Homac, as they highlighted in terms of 12 connectors. It is certainly one that I think we need to 13 consider, again, in terms of new materials. I believe part of 14 anything we do moving forward, hardening can certainly be 15 defined as mitigating the impacts that a hurricane may have. 16 And certainly that, to me, was an example of a mitigating type 17 of strategy. 18 In essence, you may not necessarily be able to 19 prevent entirely what the hurricanes are going to do to your 20 system, but, in essence, if you can mitigate the damage that 21 they are causing to that with this breakaway connector that he 22 talked about, it is certainly something that I think we would 23 be open to look at as a possible solution. 24 MR. McNULTY: An additional question I had is on your 25 wood pole databases. I understand that the company is in the FLORIDA PUBLIC SERVICE COMMISSION 159 1 process of developing a database that will eventually 2 incorporate the salient data such as vintage and pole type and 3 so forth throughout their service territory, and we are talking 4 about over a million poles, is that right? 5 MR. SPOOR: Yes. 6 MR. McNULTY: Is it on the table, and would it be -- 7 in consideration of the storms of the last few years, would it 8 be advisable that instead of kind of developing this over an 9 eight or ten-year period, would it be advisable to expedite a 10 pole database? 11 MR. SPOOR: Well, again, I think as we look at 12 ultimately what are some of the solutions or options that we 13 have to explore, I believe that we will take a look at 14 everything. That may be one of them, as well. I don't think 15 we have made a decision yet. Like I said, we are really right 16 now -- we have just recently got the KEMA report in terms of 17 how the system performed. We are obviously quickly moving 18 toward the next phase, which is understanding what we need to 19 do moving forward. 20 MR. McNULTY: I would like to speak for a moment 21 about the third-party poles. And I think the KEMA report said 22 that FPL doesn't have a method today of tracking actions of 23 third parties once the third party has informed FPL that one of 24 their poles requires replacement, bracing, or treatment. I 25 think that was a general statement at some point, a key FLORIDA PUBLIC SERVICE COMMISSION 160 1 finding. Is that something that needs to be addressed as well 2 in this process? I mean, does FPL need to start looking at 3 third-party arrangements with the third-party providers, and 4 whether or not they do a follow-through of their pole 5 population that is affecting electric service? 6 MR. SPOOR: Again, I believe that would be one of 7 those areas, again, that are certainly worthy of further 8 exploration in terms of what we can do with that moving 9 forward. 10 MR. McNULTY: I think you just a little while ago 11 mentioned a 20 percent increase in the tree-trimming budget for 12 the coming year, and that that follows upon previous increases. 13 Do you have an idea how that will best be spent in terms of is 14 it doing more of the same, or are you going to fundamentally 15 change the type of tree trimming that you are doing? 16 And by that I mean, for instance, if today you are 17 doing tunneling whereby overhanging branches are allowed to 18 remain, is there something different that is in your sights 19 today for becoming more -- having a more robust system? 20 MR. SPOOR: Yes. That particular one I can't respond 21 to in terms of are we changing our vegetation trimming 22 techniques, if that is what the question is. 23 MR. McNULTY: Yes. 24 MR. SPOOR: I would certainly have to get back with 25 you on that one and have to defer that one to our vegetation FLORIDA PUBLIC SERVICE COMMISSION 161 1 management group that are the arborists and kind of the experts 2 in that field. 3 MR. McNULTY: Well, just in your general sense of it, 4 is there -- you looked at, and I think it was mentioned in the 5 KEMA report that trees are a very big factor and that 6 vegetation is a very big factor. Do the utilities need to be 7 more aggressive in Florida in tree trimming, I mean, in the 8 sense of looking at those options? I mean, I know you are 9 looking at them now, but there has to be some sort of 10 consensus, I'm sure, built within the company. But is that 11 something that needs to be looked at not just in terms of the 12 cycle, but in terms of whatever that standard is for line 13 clearances, you know, given today's standard versus where we 14 need to be? 15 MR. SPOOR: Well, again, I think that is one of those 16 areas that, you know, we would probably consider almost a 17 shared responsibility in that, you know, in terms of what we 18 spend or what trees we trim, how many miles we may clear. 19 Certainly those instances where, you know, communities may have 20 challenges in terms of where trees are planted, what types and 21 species of trees are planted in relationship to proximity of 22 our facilities, you know, I believe that whole area certainly 23 needs a little bit more analysis to determine. I don't think 24 it is just about spending more money on vegetation. I 25 certainly believe it is certainly one of kind of a shared FLORIDA PUBLIC SERVICE COMMISSION 162 1 responsibility to understand what we can do to work with our 2 communities to better understand that. 3 MR. TRAPP: Could I interject here just a second, 4 Bill, and ask do I understand that Florida Power and Light's 5 current tree-trimming policy is confined only to road 6 right-of-way easement? 7 MR. SPOOR: When you say road -- 8 MR. TRAPP: Road right-of-way easement areas are the 9 only areas that you feel responsible for? 10 MR. SPOOR: No, I believe part of our vegetation 11 program is trimming trees that are in close proximity to our 12 facilities, which is not just in road right-of-way. 13 MR. TRAPP: What is your policy with respect to 14 responding to community or individual customer concerns about 15 trees on their property that may affect their service drop? 16 MR. SPOOR: I believe that policy right now is 17 certainly reviewed by an arborist that actually goes out to the 18 site to evaluate the criticality of that and whether a crew has 19 to be dispatched right then or if it is incorporated into some 20 type of cycle we may be trimming on. I believe that is how 21 those are addressed. 22 MR. TRAPP: How many of the extended outages, the 23 longer outages that occurred during the last two years 24 hurricanes were associated with individual laterals versus -- 25 excuse me, individual service drops as opposed to laterals or FLORIDA PUBLIC SERVICE COMMISSION 163 1 primaries or long lines? I mean, do you have a lot of 2 customers that are left over without power because they had 3 vegetation problems on their property? 4 MR. SPOOR: I don't have that data to be able to know 5 if that's true or not. 6 MR. TRAPP: Do you have an aggressive educational 7 program that you send out as bill-stuffers, for instance, to 8 your consumers saying how important it is to keep vegetation 9 away from their facilities? 10 MR. SPOOR: Absolutely. In fact, again, I referenced 11 it as kind of our right tree/right place campaign that we have. 12 We aggressively market to all of our customers in terms of 13 making sure that they are not planting trees, or more 14 specifically certain tree species in close proximity to our 15 lines that ultimately may cause some issues as the trees begin 16 to mature and grow. 17 MR. TRAPP: And if you spent like another million 18 dollars on that program, would it significantly affect the 15 19 percent of the bill that's distribution now? 20 MR. SPOOR: That I don't know. 21 MR. TRAPP: It would come out of the existing 22 revenues, wouldn't it? 23 MR. SPOOR: I'm not sure how we would pay for those 24 campaigns. 25 MR. TRAPP: It would affect stockholders right now, FLORIDA PUBLIC SERVICE COMMISSION 164 1 unless you came in for a rate case, is what I'm getting at. Is 2 that not true? 3 MR. SPOOR: Again, I'm more of a technical person. 4 In terms of how we would pay for those campaigns, I'm not quite 5 sure how we do that. 6 MR. TRAPP: Thank you. 7 MR. SPOOR: You're welcome. 8 MS. HELTON: Mr. Breman, did you have some questions? 9 MR. BREMAN: One or two. I've read some of the other 10 companies' responses. Progress, they decided in 2001 they are 11 going to get rid of all of their transmission -- wooden 12 transmission poles, especially their H-frame wood transmission 13 poles. Last year after some of the storms, I took the liberty, 14 or was told to, drive down and explore some areas in the 15 Treasure Coast area of FPL. And there is a lot of H-frame 16 construction on the transmission over there still, and some of 17 it was pretty patched together. My words, not technical. It 18 probably meets code and all of that. 19 I also took the liberty of looking through FPL's 1993 20 report post-Andrew, and it said FPL was reconsidering its use 21 of wooden H-frame pole construction. So it seems to me that 22 adding two and two together suggests that FPL should be not 23 only mitigating away about not putting any new H-frames in, but 24 also replacing the old ones. So where are we on that? 25 MR. SPOOR: That particular question, if I can, I FLORIDA PUBLIC SERVICE COMMISSION 165 1 will probably defer to Mike Warr, who is in our transmission 2 group. 3 MR. WARR: With regards to wood H-frames on our 4 transmission system, we no longer do that. It's not part of 5 our standard. Our standards now are, for the lower voltage, 6 typically made up of round spun concrete pole with polymer post 7 insulators. I recall the last sparwood H-frame line that we 8 installed was somewhere in the '80s, early '80s. 9 With regard to maintenance, whether we do 10 maintenance, relocations, new projects, we try and bring them 11 up to our current standards, which are round spun concrete 12 poles with polymer post insulators. 13 MR. BREMAN: Also, probably a transmission-related 14 question, but it might also fit distribution. Earlier today we 15 heard some comments about wind giving a good shake to the 16 infrastructure. Also, in the KEMA report, if you read through, 17 one of the paragraphs talks about finding loose bolts, nuts, 18 some of them missing, probably due to the shaking and the 19 vibration that occurs when winds impact the facilities. On 20 distribution it would be more related to the cross-arm 21 structures, whether they are bolted or whatever. 22 In the post-storm sweeps, how thorough are the 23 sweeps? Do you all check for loose nuts and bolts like that? 24 Do you climb the poles that are in the hurricane wind areas? 25 MR. SPOOR: For distribution, our post-sweep FLORIDA PUBLIC SERVICE COMMISSION 166 1 assessments do not include climbing the poles. It is certainly 2 more -- 3 MR. BREMAN: Well, you could use a bucket. 4 MR. SPOOR: I'm sorry? 5 MR. BREMAN: You could use a bucket. 6 MR. SPOOR: We could use a bucket. But really the 7 post-sweeps that we do are more about visually inspecting any 8 impacted areas items that certainly were caused by the 9 hurricane. In terms of whether we climb each distribution pole 10 or use a bucket to check, you know, all of the hardware, it is 11 more of a visual inspection just because mainly of the scope of 12 the work that we have to do, and certainly things that -- and 13 we believe we do a pretty good job of visually inspecting those 14 types of damage that may still be out there as a result of the 15 hurricane. 16 MS. KUMMER: Jim, if I could jump in just as a 17 follow-up. What do you look for? You do a visual inspection 18 for what? 19 MR. SPOOR: Certainly poles that may be severely 20 leaning still, as an example, from the hurricanes. Certainly 21 if there is dangered timber in that a tree was on the brink of 22 falling but has not fallen. Those are probably two of the more 23 obvious ones that we would do as part of our post-sweep 24 assessment in the impacted areas. 25 MR. TRAPP: On that transmission nuts and bolts FLORIDA PUBLIC SERVICE COMMISSION 167 1 issue, am I given to understand that the nuts and bolts were 2 tightened to specification, but maybe the specification needs 3 to be revisited? 4 MR. WARR: For that particular line section, they 5 were installed to industry standard and to the same manner that 6 other 500 kV lines were built. But for that particular line 7 and than particular line design it wasn't sufficient in order 8 to keep them tight. As a result of that, you know, FPL is 9 going out now and making sure that we tighten all of that, all 10 the bolts on every structure that is out there. Additionally, 11 we are trying to look for commonalities with that particular 12 line section to see if they exist with other 500 kV lines that 13 we have on the system. 14 MR. TRAPP: So in terms of your transmission 15 structures you are going to mechanically tighten as opposed to 16 hand tighten the 500 kV section that was affected, but you are 17 also going out there to check the looseness of any other bolts 18 that are -- 19 MR. WARR: I'm sorry, say that again, please. 20 MR. TRAPP: In terms of the one 500 kV section that 21 went down, and then you found problems with the specifications 22 for tightening the bolts, you have not only tightened those 23 bolts is what I am hearing you say, but you are going out to 24 all other transmission structures and testing whether or not 25 the current procedures for tightening still apply. Is that FLORIDA PUBLIC SERVICE COMMISSION 168 1 what I heard? 2 MR. WARR: Well, it's two-fold. One of the things 3 that we are looking at are the commonalities for that 4 particular line section and does it apply for the rest of the 5 500 kV systems. But additionally, yes, sir, we have hired 6 contractors to go out to the our other 500 kV lines that were 7 not affected during Hurricane Wilma to do inspections on those 8 facilities, as well, too. 9 MR. TRAPP: What is confusing me is your terminology 10 "the commonality". What does that mean? You are looking for 11 similar -- 12 MR. WARR: Something caused the bolts to come loose. 13 And what are those commonalities that caused those bolts to 14 come loose, and do they exist on other 500 kV systems that we 15 have out there? 16 MR. TRAPP: Okay. 17 MS. HELTON: Tom, did we have any questions from the 18 audience? 19 MR. BALLINGER: That, and I've got a couple of my own 20 I'll do first. 21 Do you know either through your own experience or 22 through the KEMA report what the primary cause of damage to the 23 transmission system was? Was it flying debris, was it snapped 24 insulators, a general feel. 25 MR. WARR: The majority of the damage that occurred FLORIDA PUBLIC SERVICE COMMISSION 169 1 on the transmission system, I think we had a total of 100 2 structures that were impacted because of Hurricane Wilma, 65 of 3 those were single wooden poles. We had very little damage or 4 impact to wooden H-frames. The commonality between those 5 single wooden poles, they were confined, I think, to either 6 three or four transmission line sections, and they all had 7 similar profiles. Most were located in flat open terrain and 8 had some type of elevation berm in close proximity to it. 9 MR. SPOOR: I believe it is worth pointing out, 10 though, that I believe the KEMA report concluded that the 11 damage to the transmission structures did meet the standard at 12 the time that those structures were built, correct? 13 MR. WARR: (Indicating yes.) 14 MR. BALLINGER: And what is your typical inspection 15 and maintenance on your transmission system? If you want to do 16 it by voltage level, that's fine, or if it varies? 17 MR. WARR: It varies. We are continuously doing 18 inspections. We have primarily three methods of inspections. 19 The ones that we gauge everything off of is climbing 20 inspections, which is putting somebody on the structures and 21 physically climbing and sounding and looking and testing. And 22 it is from substation pull off to substation pull offs and all 23 points in between, and it is on some type of cycle, either a 24 three-year, four-year, or eight-year cycle. And the cycle is 25 consistent or is determined by several factors: The number of FLORIDA PUBLIC SERVICE COMMISSION 170 1 components that are involved, the importance of the line 2 section to the system, the last time it was inspected. There 3 is a whole variety of components that go into determining what 4 frequency of cycle it is on. 5 There are other inspections that we do. We do ground 6 inspections. Contingency patrols, if we are taking out one 7 section what is going on with the other sections. We do 8 vegetation patrols twice a year. And then we do special 9 patrols, or special assessments for problems or challenges that 10 we have known or are considering. 11 MR. BALLINGER: Back to these single wooden 12 transmission lines. I presume they were probably 69 kV, or 13 were they much higher voltages? 14 MR. WARR: Most of them -- I think all of them were 15 69 kV, yes, sir. 16 MR. BALLINGER: Okay. And are they required to have 17 the same, I guess, safety standards as we have for the 18 distribution poles, or what wind speeds are they designed to? 19 Is it any different than distribution, being that they are a 20 single pole construction? 21 MR. WARR: The structures that came down during 22 Wilma, and actually and Frances and Jeanne, were primarily 23 built -- they were originally built like in the 1960s, and then 24 I think a couple of line sections had been relocated in the 25 1980s. So I'm not exactly sure what the code was at that time, FLORIDA PUBLIC SERVICE COMMISSION 171 1 but, no, they would not meet the 60-mile per hour exemption for 2 distribution. But they would not be to the existing mile per 3 hour that is under the existing code. 4 MR. BALLINGER: So somewhere in between? 5 MR. WARR: Possibly, yes, sir. 6 MR. BALLINGER: During Wilma, Frances, and Jeanne, 7 did you have any equipment supply problems? Transformers, 8 conductors, insulators, did that ever cause a delay in 9 restoration that you can recall? 10 MR. WARR: In terms of material and delivery? 11 MR. TRAPP: Yes. 12 MR. WARR: No, sir. 13 MR. BALLINGER: Or labor problems? Did you have too 14 little labor or too much labor? 15 MR. WARR: No, sir. Actually for all Charley, 16 Frances, Jeanne, Katrina, and Wilma, we did it with in-house 17 personnel and on-site contractors for transmission and 18 substation. 19 MR. BALLINGER: So this is getting to that mutual aid 20 agreement, I guess, that seemed to work fairly well for you all 21 as far as -- I mean, does mutual aid also work for equipment as 22 well as labor? 23 MR. WARR: Yes, sir. And we never exhausted our 24 supply of materials. 25 MR. BALLINGER: Internal with FPL? FLORIDA PUBLIC SERVICE COMMISSION 172 1 MR. WARR: Yes, sir, that's correct. 2 MR. SPOOR: For transmission and distribution we, 3 again, did not have any material issues. 4 MR. BALLINGER: Okay. We heard a lot with Wilma of 5 significant damage to substations in this event, much more so 6 than any other storms, which is kind of an isolated thing. Was 7 that ever a critical path in restoration of getting a 8 substation up, or was there still problems on the distribution 9 side that you had to worry about? 10 MR. WARR: No, sir. 11 MR. BALLINGER: So it wasn't a critical path? 12 MR. WARR: That's correct, sir. 13 MR. BALLINGER: And what was the primary damage to 14 your substations? Was it flying debris, was it trees, was it 15 just wind damage to the actual structures? 16 MR. WARR: I think Mike talked about it earlier, with 17 Wilma we only had eight substations, which is about 1.5 percent 18 of our entire system, that was considered inoperable. The 19 majority of those were even restored upon arrival to the 20 substation, so most of those it was getting somebody there. A 21 lot of our substations are built, you know, with redundancy, so 22 there is more than one transformer at a substation. So as long 23 as one of them is there, you can still pick up service. 24 MR. BALLINGER: I will jump to the third-party 25 attachments a little bit. It's a little out of my field, but FLORIDA PUBLIC SERVICE COMMISSION 173 1 it raised an interesting question. What is done about contract 2 enforcement? We have heard a lot about other suppliers, if you 3 will, attaching on your poles, not notifying you, adding 4 additional things where it is changing loading and the utility 5 is not aware of it. What happens when you do find out about 6 something like this? Explain to me the contract enforcement, 7 how you go about that. 8 MR. SPOOR: In terms of if we find somebody attaching 9 to our facilities out in the field? 10 MR. BALLINGER: Yes. 11 MR. SPOOR: And, I'm sorry, if -- 12 MR. BALLINGER: If you find out that somebody has 13 attached without your knowledge or they have added on 14 additional equipment and increased the loading, how do you do 15 it with your current enforcement, I guess, with your contracts? 16 MR. SPOOR: I don't know all the details of that. I 17 do know we do engage periodically with assessments in the field 18 to determine, if you will, the attachments that we have on our 19 facilities, or for truing up in terms of what we do 20 specifically to address if there is a violation, I don't know 21 that right now. 22 MR. BALLINGER: Okay. I have one question from the 23 audience. Did the KEMA report give you any specific 24 recommendations regarding the number or type of pole 25 inspections that FPL should do in the future? I haven't read FLORIDA PUBLIC SERVICE COMMISSION 174 1 the report, I will be honest with you, but did they have any 2 recommendations of what to do in the future either as -- 3 MR. SPOOR: Well, we really are right now still 4 engaged with KEMA to determine what indeed are the 5 recommendations. Again, the first part of their task was to 6 assess how the system performed specifically to Wilma and did 7 it perform as it should have. Now that that has been complete, 8 again, we are engaged with them in terms of not only 9 recommendations from lessons learned from Wilma, but certainly 10 moving forward are there things, again, that we can do to 11 harden our system. 12 MR. BALLINGER: Okay. So the going forward is going 13 forward, it is in progress? 14 MR. SPOOR: Absolutely. 15 MR. BALLINGER: Okay. Did KEMA attempt to separate 16 any percentage of poles and their failure modes, either rotten 17 base, or tree damage, or debris? Did they try to do anything 18 like that on the forensic side? 19 MR. SPOOR: Well, I think on the forensics data they 20 did certainly do, I believe, an exhaustive analysis in terms of 21 certainly trying to get to causes of poles falling. And I 22 believe that they concluded that the primary cause in terms of 23 why most of the distribution poles fell was because of wind 24 only. 25 MR. BALLINGER: Okay. Thank you. FLORIDA PUBLIC SERVICE COMMISSION 175 1 MR. BREMAN: Excuse me, I have one clarifying 2 question. I was curious about the presentation on collocation 3 issues going undetected. I was wondering if you could support 4 the 20 percent range that was somewhat discussed this morning 5 by the one of the presenters? 6 MR. SPOOR: I'm sorry, the first part of that? 7 MR. BREMAN: The collocations going undetected. 8 Numbers like 20 percent were being talked about. Do you have a 9 feel for what FPL's numbers are? 10 MR. SPOOR: I don't. Today I don't have that 11 information in terms of what that would be specific for FPL. 12 MR. BREMAN: If it is near 20 percent, is that a 13 significant contributor to failure mode on the poles? 14 MR. SPOOR: Again, I guess I would have to see how 15 that represents, or how that relates to FPL before I could say 16 whether 20 percent is a significant rate in terms of failure of 17 poles or not. I can tell in normal performance, you know, I 18 think the KEMA report even highlighted that our pole 19 performance, if you will, is good. And I don't believe they 20 identified that as a high cause in terms of pole failures that 21 occurred during Wilma. 22 MR. BREMAN: Thank you. 23 MR. TRAPP: I'm going to ask Mike Staten to throw up 24 a chart that I think will help with this next set of questions. 25 We can start with that one, Mike. FLORIDA PUBLIC SERVICE COMMISSION 176 1 We have talked about it some this morning, I think 2 several speakers have touched on it, but I'm given to 3 understand that this is from the National Electric Safety Code, 4 and it classifies Florida as a light wind loading area. 5 MR. SPOOR: I actually think the -- if I can 6 interrupt, I believe, and not to be well-versed on the National 7 Electric Safety Code, but I believe in terms of heavy, medium, 8 and light, that is in terms of ice loading. 9 MR. TRAPP: To ice loading? Good. We will go to the 10 next slide, then. This shows what I believe to be the high 11 wind speed criteria that's in the American National Safety 12 Code, and I'm given to understand that Florida does not use 13 this for distribution poles, that we classify our poles that 14 are below 60 feet in height as only basically having to 15 withstand 60 mile-per-hour winds. 16 My question, and I apologize, I haven't been able to 17 look at your presubmitted scatter diagrams where we were trying 18 to attempt to correlate where damage occurred during these 19 hurricanes and try to identify possible zones, and I think you 20 have touched on that, and I want to get this straight. KEMA is 21 working with Florida Power and Light to identify trouble areas, 22 trouble hot spots I think it has been called today, zones, what 23 have you. 24 My question to you is will that recommendation be 25 along the lines of how close to conforming with these high wind FLORIDA PUBLIC SERVICE COMMISSION 177 1 speeds should we get to in Florida, and how much will it cost? 2 MR. SPOOR: Well, again, I think certainly we have 3 not, you know, done that analysis. That's certainly one avenue 4 that we would at least try to understand in terms of if you 5 were to do this, not only what it would cost, but also what it 6 would gain you. I think we recognize certainly that whatever 7 we do, we truly want to make sure that it benefits the 8 customers and certainly the residents of Florida. 9 And, again, I think, you know, we recognize, and that 10 is why we really endorse this concept of kind of having a tool 11 kit, if you will, for hardening. Because it won't, I don't 12 necessarily believe, just be designing or increasing the 13 standard that you build to. I believe if you do that and you 14 don't address things aggressively, or more aggressively in 15 terms of vegetation management or some of the other things that 16 could bring down those big poles just as easily as they may 17 bring down a smaller pole, I think those are all factors, when 18 you are doing this analysis, that you have to consider. 19 MR. TRAPP: And I'm glad that you said that, because 20 I agree with you 100 percent. Don't you have it look at these 21 lines of wind speed and ask yourself what does wind do? It 22 directly affects the poles, it blows debris, and it fells trees 23 and branches. Don't you have to correlate with this graph 24 vegetation densities in Florida, population growth and 25 development that produces the debris? FLORIDA PUBLIC SERVICE COMMISSION 178 1 MR. SPOOR: Yes, sir. 2 MR. TRAPP: And don't you also have to correlate with 3 this type of concept flood zones? Can we see a map also of 4 where the flood zones are so that we can cross-check 5 undergrounding versus overhead. And when did you say that 6 study was going to be due? 7 MR. SPOOR: We haven't mapped out a time frame 8 entirely, but I can tell you we are aggressively working 9 towards that next phase. Again, this KEMA report in terms of 10 performance for Wilma is less than two weeks old, and so we are 11 certainly aggressively moving toward that second phase. Again, 12 I think all of the IOUs recognize things that we need to do or 13 should at least explore. You know, we are working aggressively 14 to do that in short order. 15 MR. TRAPP: And when do you think you will know when? 16 I mean, when do you plan to make the decision when to analyze 17 the study? 18 MR. SPOOR: Certainly over the next several weeks I 19 think we will be mapping out, kind of, that timeline to say, 20 you know, the tasks that we need or we believe need to be 21 explored and potentially the time it may take to explore those 22 tasks. 23 MR. TRAPP: I think at the end of this workshop the 24 chair intends to announce that you have one week to submit 25 written comments based on what we have heard today. What kind FLORIDA PUBLIC SERVICE COMMISSION 179 1 of -- how far along toward that task will you be within a week? 2 MR. SPOOR: We will certainly be as far as we can, 3 certainly. 4 MR. TRAPP: You have been most helpful. Thank you 5 very much. 6 MR. SPOOR: You're welcome. 7 MR. McNULTY: Mr. Spoor, I have just one additional 8 area of inquiry. I want to ask you a little bit about wood 9 pole inspections. I know that wood pole inspections were the 10 subject of a staff management audit, and I know that the 11 company provided comments on the audit. And subsequently Wilma 12 occurred, and I think maybe Katrina may have post-dated that 13 period of the audit. What I am curious about is I have noted 14 that the USDA rural utility service makes the 15 suggestion/recommendation for Florida that says that pole 16 inspections, wood pole inspections should be on the order of 17 eight to ten years. And the types of inspections that they are 18 considering adequate in those cases are sound and bore 19 inspections that may include excavation, in fact, if certain 20 types of poles or types of wood are used. 21 I guess it is a two-pronged question. One is is 22 eight to ten years, is that somewhat of a standard or should be 23 a standard in Florida for wood pole inspections in comportment 24 with what the USDA or US has suggested, and is FPL considering 25 a cycle, a wood pole inspection cycle that would comport with FLORIDA PUBLIC SERVICE COMMISSION 180 1 that? 2 MR. SPOOR: I think to answer the first part of your 3 question, I would probably have to defer until I actually see 4 the study to give an educated response in terms of whether I 5 think an eight to ten-year pole cycle is adequate. I have not 6 seen that study that you reference, so -- 7 MR. McNULTY: It was a bulletin, a 1996 bulletin. 8 MR. SPOOR: Okay. I would have to certainly look at 9 that to be able to provide probably an educated response to 10 whether we agree or disagree with that study. 11 MR. McNULTY: As is practiced in the industry, is a 12 ten-year cycle a common cycle for the types of wood pole 13 inspections that would be sound and bore type inspections? 14 MR. SPOOR: Well, again, I think actually to the 15 second part of your question, which is what pole inspections 16 or, for that matter, any type of inspections that we may be 17 doing on a going-forward basis may look like. And, again, I 18 think that is certainly an area in working with KEMA, who we 19 really are looking to leverage their expertise in the industry 20 in terms of what's adequate, that certainly would be part of 21 something that we would consider. 22 MR. McNULTY: Thank you. 23 MS. HELTON: Thank you, Mr. Spoor. I'm sure you are 24 probably ready to sit down. 25 MR. SPOOR: That's okay, thanks. Good questions. FLORIDA PUBLIC SERVICE COMMISSION 181 1 MS. HELTON: Next we will hear from Progress Energy, 2 David McDonald and Gary Furman. 3 MR. McDONALD: Good afternoon. I'm David McDonald 4 and I'm the Director of Distribution Asset Management for 5 Progress Energy. We appreciate the opportunity to be here and 6 be a part of this workshop. We feel like that both the IOUs, 7 the staff, and the constituents of this state understand the 8 importance of these discussions. 9 So with that, I would like to say that we have filed 10 a response to the questions that were submitted to us by Staff. 11 We presented them earlier, and I'm sure that you have had an 12 opportunity to reflect upon those and look forward to the 13 discussion coming up. 14 I want to speak about what we have learned over the 15 past two years at Progress Energy. We're going to be speaking 16 about the 2004 and '05 hurricanes, the impact to our service 17 territory. Also we are going to be mentioning exactly what 18 type of damage that we happened to see and our response to that 19 impact. And then we are going to offer up our opinions on the 20 outage mitigation opportunities that exist from the lessons 21 that we have learned. 22 One of the things I want to drive home about the 2004 23 and '05 storm season is there is really two issues of analysis 24 that we performed. One, how did we respond? What was our 25 response to the restoration efforts? And we did an exhaustive FLORIDA PUBLIC SERVICE COMMISSION 182 1 analysis of that. Again, like FPL, and like Michael stated 2 earlier, we are very aggressive about our lessons learned. We 3 had over 140 lessons learned that we identified to improve our 4 storm restoration response. Those 140 lessons learned were 5 raised up to the highest level as far as the auditing of those 6 to ensure that we were very thorough in our response to those. 7 But then the second aspect of our analysis is how did 8 our system respond? And from that, that is what the focus of 9 our attention today will be is the response of our system to 10 the 2004 and '05. As you can imagine, for 2005 the impact to 11 us was minimal. We were very fortunate in that, that we had 12 the fringes of what FPL happened to see. We also had the 13 fringes of what Gulf happened to see from a Dennis perspective. 14 But from that there were still opportunities for us to learn. 15 Our discussions today are going to focus on the 2004 storm 16 season; more specifically, Charley, Frances, and Jeanne. 17 When you look at our service territory, we basically 18 cover the west coast north of Bradenton, and the central part 19 of the state of Florida. We cover up west of Tallahassee, over 20 to Deland, which is northeast of the Orlando area, and then 21 down to the Lake Wales/Sebring area. 22 Now, the first hurricane that we encountered last 23 year was Charley. You heard a lot of discussion about Charley. 24 That came through our service territory with 145-mile-an-hour 25 winds. It came up through the southern portion and exited out FLORIDA PUBLIC SERVICE COMMISSION 183 1 through Deland. In that it came through the heart of our 2 central service territory. 3 Following that was Frances. Frances was a very long 4 storm. Again, coming in at the central part of our service 5 territory, moving throughout our system impacting every aspect 6 of our system. 7 And then the final one, Jeanne. Jeanne was 110 miles 8 an hour. As it moved through our service territory, we had 9 tropical force winds in the Pinellas County area, hurricane 10 force winds through the central part of the state. As you can 11 see from that, that trajectory, I believe it is Frostproof, 12 somewhere in the Frostproof area had the unfortunate 13 circumstance of all three storms coming right over the top of 14 them. 15 When you consider the path of those storms, one of 16 the things that needs to be emphasized is that most of our 17 damage was wind related, it was not storm surge related. These 18 were wind events for us at Progress Energy, these three events. 19 I want to speak to you for a few moments about our 20 outage experience. Three areas that I'm going to bring to your 21 attention have to do with substations, transmission miles, and 22 finally peak customers out. When you consider our substations 23 out, Frances had the greatest impact. One of the things that 24 we have identified through our analysis of our substations is 25 that the majority, the majority, and I mean great majority of FLORIDA PUBLIC SERVICE COMMISSION 184 1 the substations that were out were caused by 2 transmission-related events. Damage within the footprint of 3 our substations was minimal for those three events. 4 Transmission miles out. Those are the miles that we 5 had out. And then finally peak customers out. You see a 6 pattern for these three bar graphs, that pattern being 7 basically that Frances was the biggest impact for us. And, 8 again, drawing your attention, Frances was over our service 9 territory for a very, very long time. 10 Sometimes when we see these graphs we focus on, the 11 previous graph about wind speed, we focus on just the 12 horizontal wind speed of hurricanes. As we all know, there are 13 is a lot of wind phenomenon related to hurricanes. There is 14 downbursts, there is tornadic activity, there is the horizontal 15 wind loading. And I have seen instances, or there were 16 purported instances of a vertical -- I'm sorry, a horizontal 17 wind pattern associated with the front of Frances. So when we 18 focus on wind phenomenon it goes way beyond just horizontal 19 wind loading and the wind speed that was reported. 20 The next item I want to speak to you about is our 21 damage experience. When you consider it from a facilities 22 perspective, and you consider our transmission structures, you 23 see that Charley, a Class 4 hurricane, had the greatest impact 24 on us. But then through the other storms that greatly 25 diminished. FLORIDA PUBLIC SERVICE COMMISSION 185 1 Distribution transformers. One of the things I want 2 to point out, distribution transformers at Progress Energy, we 3 have over 400,000 distribution transformers. What you are 4 seeing reflected there is less than 1-1/2 percent of our 5 transformers we had to replace for those three storms. 6 Distribution poles replaced. We have over 1.1 7 million poles at Progress Energy. You are seeing 7/10ths of a 8 percent of our poles that failed as a result of three 9 hurricanes. 10 Yes, Jim. 11 MR. BREMAN: Regarding the transformer failures for 12 distribution facilities, and I guess I failed to ask this 13 question of Mike Spoor when he was up there, because I'm pretty 14 sure FPL had transformer replacements for distribution, too. 15 I'm kind of curious, what is the mode of failure of the 16 transformers? 17 MR. McDONALD: Well, there are several modes. One 18 mode, as you can imagine, there is still existing open-wire 19 secondary on our facilities. When you start having wind and 20 vegetation that interact with that open-wire secondary, there 21 is a good chance you are going to have shorting opportunities 22 that may occur. So electrical failures internally. 23 You also can have failures of the transformer 24 actually being on a pole that may have come down. Again, I 25 mentioned to you about our pole instances, or pole failures FLORIDA PUBLIC SERVICE COMMISSION 186 1 were less than 7/10ths of a percent, so that is one of our 2 least significant contributors to pole failures. 3 So when you look at our transformer failures, the 4 third item that I would want to stress is the connection to 5 those transformers, whether it be service or secondary, trees 6 coming across those service or secondary, and the physical 7 movement of pulling that off the pole. So when you consider 8 those three factors, they contributed mostly to our failures 9 that we saw at Progress Energy. 10 MR. BREMAN: I guess the follow-up of that is is it 11 really time consuming to replace these transformers? I know 12 you said it is not a large quantity compared to the existing 13 system on a total basis. But all the people that are there, 14 you know, you have got 10,000 people scrambling around trying 15 to bolt the system back together and put it back up. I'm just 16 wondering how much time is really required to reset a 17 transformer on a pole and then set the pole. 18 MR. McDONALD: Well, what I would respond to that is 19 anytime we have a failure of any equipment it is going to be 20 time consuming, and dependent upon where that equipment happens 21 to be. If it happens to be in a rear easement that we don't 22 have access to it by vehicles, that prolongs our restoration 23 efforts. So, yes, there is time involved in replacing those 24 roughly 3,800 transformers. But that time involvement, when 25 you look at the entire fleet of transformers we have, and you FLORIDA PUBLIC SERVICE COMMISSION 187 1 think about it from a significance perspective, is it 2 impactful? Absolutely. Does it take time? Absolutely. But 3 when you look at in the grand scheme of things and you think 4 about it from a risk/benefit analysis, and, again, from an 5 anecdotal risk/benefit analysis, does the risk for that entire 6 fleet of 400,000 transformers warrant the standards that you 7 have that resulted in roughly 3,800 transformers. 8 MR. BREMAN: Not having to replace the transformers 9 won't reduce the restoration costs? I mean, I'm just thinking 10 about are there options. Is this a way of identifying a hot 11 spot zone where prospectively we can improve our hurricane 12 hardening. 13 MR. McDONALD: There's a couple of things that could 14 be considered, and that's part of this workshop, of what are 15 those things we should be consider. When you think of the 16 physical connection, the electrical connection and the physical 17 connection, are there things that can be done? We mentioned 18 the Homac and their breakaway. Is there something else that 19 can be done at the connection at the transformer? These are 20 questions that have to be resolved that are not answered at 21 this juncture. 22 So, yes, to answer your question, are those things 23 that we need to weigh going forward? I think as IOUs that we 24 have to consider those types of issues and determine whether it 25 is the right investment. And by right investment, I need to FLORIDA PUBLIC SERVICE COMMISSION 188 1 stress, right investment is from a totality perspective. From 2 the customers' perspective, from the company's perspective, 3 being the labor that it takes to restore that. So, yes, it is 4 a total response that we have to consider. 5 MR. BREMAN: I'm sorry. 6 MR. McDONALD: No, no, I just wanted to make sure I'm 7 answering your questions. 8 Now, when you consider the restoration experience and 9 the resources and the restoration days and the cost in 10 millions, again, you will see that Charley was very impactful 11 for us. You see that our restoration time frame for Charley, 12 which was our greatest, was nine days. Five days for Jeanne. 13 If you reflect back, we had over 722,000 customers out for 14 Jeanne. Cost in millions. You see the reduction in the cost. 15 So when you consider the three storms and you 16 consider these slides in comparison, what you have to also make 17 a component of your thinking is that Charley, a Class 4 18 hurricane, is a hurricane that required us to rebuild to some 19 extent. As you moved into the others it was more of a repair 20 and restore. 21 Damage assessment. Some of the conclusions that we 22 have come to, again, by our assessment of the 2004 season. 23 Transmission. Higher voltage performed better than lower 24 voltage. By that we are talking about the 230, the 115 versus 25 the 69. Concrete and steel performed better than wood for our FLORIDA PUBLIC SERVICE COMMISSION 189 1 transmission structures. 2 Substations. One of the things I mentioned earlier, 3 no significant damage within the footprint of the substation. 4 And the outages for those substations due primarily to the 5 transmission lines that connected them. 6 For distribution, the preponderance of our failures 7 were tree-related. That damage was very prevalent throughout 8 our service territory that was impacted by these storms. The 9 last bullet, code standards. Not a significant issue from our 10 assessment. And the 7/10ths of the pole failures. When you 11 look at the wind-loading standards that we are required to 12 build to, in our assessment of the 2004 season, that was not a 13 significant contributor to our pole failures. It was the wind 14 related to the vegetation that caused our damage. 15 Going into a little bit more detail. Transmission, 16 Hurricane Charley. You see the hurricane force winds depicted 17 by the red, tropical storm force winds depicted by the orange. 18 You see it was a very tight and compact storm. Those locations 19 indicated there are the actual pole failures. And you see 20 within the hurricane force winds is where we had the majority 21 of our transmission pole structure failures. 22 Substations -- 23 MR. TRAPP: Can you make an observation with regard 24 to the density of that curve in the center part of the state as 25 opposed to the coastal parts of the state? Is there anything FLORIDA PUBLIC SERVICE COMMISSION 190 1 to be drawn from that? 2 MR. McDONALD: It's our service territory. 3 MR. TRAPP: Okay. So your service territory is just 4 in the center, you are not mapping the Power and Light 5 facilities? 6 MR. McDONALD: No. 7 MR. TRAPP: Do the Power and Light facilities show 8 the same pattern through the path of the storm? 9 MR. McDONALD: I don't want to speak for Florida 10 Power and Light. It would be just an assumption on my part. 11 MR. TRAPP: I would like for you all to speak for the 12 state. I mean, we asked you all to speak for the state. What 13 I would like to know, and I would like perhaps for you all to 14 get your heads together on this and tell us whether or not 15 there is a pattern of damage that just simply follows the path 16 of the storm, or whether or not -- I mean, these are 17 transmission facilities. As I understand it, they are subject 18 to the higher wind speed criteria and the national safety code. 19 MR. McDONALD: That's correct. 20 MR. TRAPP: I would be interested to know whether or 21 not because the center part of the state is built with regard 22 to the standard, it has to adhere to lower wind speed patterns, 23 whether or not you are picking up less damage on the coast 24 because they were built to higher wind speed levels, or whether 25 or not we are seeing some kind of pattern that might indicate FLORIDA PUBLIC SERVICE COMMISSION 191 1 that one of the zones we have to be interested in is a more 2 equal wind speed application throughout the state. 3 MR. McDONALD: I think as you see the subsequent 4 slides you will come to the conclusion that this is purely 5 following the path of the storm. That's what we have found in 6 our analysis is that the damage is following the path of the 7 storm. There is no designated hot pocket if you will. 8 MR. TRAPP: I would like verification, joint 9 verification between Florida Power and Light and Progress on 10 this issue. Because you all are peninsular Florida. And it 11 seems to me that being the two largest companies in the state, 12 at least you all can get your heads together and answer this 13 question with respect to a statewide perspective. Thank you. 14 MR. McDONALD: Thank you. On the next one, Frances, 15 again, you see the damage that is following the path of the 16 storm. And then the subsequent one, Jeanne, fits the same 17 pattern. 18 MS. KUMMER: Excuse me. 19 MR. McDONALD: Yes, ma'am. 20 MS. KUMMER: Looking at that, it looks like you have 21 got a significant amount of damage outside of the path of the 22 storm that you don't see on the other two slides. What was 23 that? Mine had a lot of -- 24 MR. FURMAN: If you flip back to Frances, or looking 25 at Jeanne, what you will see is -- and I think the professors FLORIDA PUBLIC SERVICE COMMISSION 192 1 that talked, or the doctors that talked about hurricanes will 2 verify that probably your strongest wind in a lot of your wind 3 events, like tornadoes and so forth, to my understanding occur 4 in the top right quadrant of the hurricane. And you will see 5 here in Jeanne, you see some of the damage up in that area 6 there. So that is kind of the correlation that can be made 7 there. And that is within -- I think the gold area is within 8 the path of the hurricane force winds, as well. 9 MR. BREMAN: Excuse me. Is that essentially 69 kV, 10 is it just a lower design standard? 11 MR. FURMAN: Yes. The majority of what in damage was 12 a single wood pole, which is 69 kV. And a larger -- at that 13 voltage you will find a larger percentage of that in closer 14 proximity to vegetation, like along road right-of-ways and so 15 forth. So you did see additional damage to the lower voltage 16 systems we believe for that reason, additional 17 vegetation-related failures at the lower voltages similar to 18 what you would find in distribution. 19 MR. BREMAN: And just to beat a dead horse, the 69 kV 20 is built kind of shorter than the 115 and 230? 21 MR. FURMAN: Yes, typically it is going to be 22 shorter. And, you know, as you go down in voltage, you get 23 closer to your substations and so forth. So the routing of 24 those lines follow closer the type of routings that you are -- 25 or locations that you would find distribution in, as well. FLORIDA PUBLIC SERVICE COMMISSION 193 1 MR. BREMAN: So this isn't just showing wood, this is 2 showing concrete and everything? 3 MR. FURMAN: That is showing all the pole failures. 4 MR. BREMAN: Thank you. 5 MR. McDONALD: Let's speak about distribution now for 6 Hurricane Charley. I want to draw your attention to the map or 7 the graph on the left-hand side. If you notice, there are 8 three different colors of severity, the greatest severity being 9 red. Those are the amount of customers on a particular large 10 circuit, which we call feeders, the percentage of those 11 customers that were interrupted. You see on the left-hand side 12 that there is a greater percentage of customers that have been 13 interrupted from a red perspective, if you will. There is a 14 greater number of red than yellows on the left-hand side versus 15 the right-hand side. 16 Part of what this graph is depicting is what we 17 mentioned earlier, a major component or a major contributor to 18 our outages happens to be related to vegetation management and 19 the impact of wind on the vegetation. The second aspect that I 20 wanted to bring out is rear lot line distribution. We are 21 finding that the location of our poles is as predominant a 22 contributor as to what class the pole is built at from a safety 23 factor. To be more specific, rear lot line distribution, we 24 have our poles placed between homes, as you can imagine, on the 25 property corners. And within those rear lot line FLORIDA PUBLIC SERVICE COMMISSION 194 1 distributions, again, you can probably imagine the type of 2 facilities that are there. Besides just the vegetation that 3 happens to exist, you have fences of all types, whether they be 4 wood fences, whether they would be vinyl, galvanized. You have 5 aluminum sheds. All within that compacted area that is all 6 within the rear lot line distribution. We have found that a 7 great or a large percentage of our outages were related to that 8 type of debris being blown into our facilities. 9 When you contrast that to the graph on the right-hand 10 side, the graph on the right-hand side has to deal with our 11 underground distribution. You'll see that it performed better 12 in Charley than our overhead. You'll see that there were fewer 13 customers out from a red, yellow, green perspective. So during 14 Charley we did have good performance from our underground 15 system, and it's -- go ahead, Jim. 16 MR. BREMAN: I apologize for keeping interrupting, 17 but just to confirm, when you have segregated out the overhead 18 and the outages, you have identified the point of failure so 19 that we know that the cause of the outage is due to a failure 20 of a piece of equipment that is either overhead or underground, 21 it's not a mixed bag like we heard some discussion earlier 22 today. 23 MR. McDONALD: No, it is indeed a mixed bag. What 24 you are seeing up there depicted is that on the left-hand side 25 over 50 percent of the customers served from those feeders are FLORIDA PUBLIC SERVICE COMMISSION 195 1 overhead. What you are seeing on the right-hand side is over 2 50 percent of those customers are underground, served 3 underground from those feeders. Again, one thing I would 4 emphasize at this juncture, understanding the exact device that 5 failed during a storm of this magnitude and having a recorded 6 history of that is a very difficult thing to do. 7 One of the things that I want to bring out at this 8 juncture is that we at Progress Energy do appreciate the 9 performance of the underground system. We did have good 10 performance from the underground system. But you have to 11 understand that there are costs associated with that 12 underground system which we will talk about in greater detail 13 in just a few moments. 14 On the next page, again, similar diagrams for 15 Frances. You see that we also had better performance from our 16 underground system as far as the number of customers impacted 17 off those facilities, those underground feeders. And then 18 finally, with Jeanne, again, the same story. So, again, from 19 this perspective I want to emphasize underground performed very 20 well for us. Overhead was impacted by vegetation and impacted 21 by location. Three key lessons that we have learned. 22 MR. TRAPP: I'm still seeing, however, from these 23 charts that you are getting significant customer outages pretty 24 much in the same areas, whether it be overhead or underground. 25 Now, do you attribute that to underground being fed by FLORIDA PUBLIC SERVICE COMMISSION 196 1 overhead? 2 MR. McDONALD: It is the density, our customer 3 density. If you look at that, there is a gap in our service 4 territory between that streak in the middle and the streak on 5 the left-hand side. So you look at our population centers. 6 Those are two population centers. The hurricane paths impacted 7 our population centers. 8 MR. TRAPP: How big are the circles, I guess, because 9 I see some red where I don't see some red in the underground. 10 MR. McDONALD: The circle is not depicting any type 11 of population. It's not rated towards the number of customers 12 served. It purely means we had a protected device of an 13 underground nature that interrupted at that location. And if 14 you think about that in greater detail, there's a lot of 15 overlap that occurs in this map. 16 MR. TRAPP: So I don't see -- weightings in this is 17 what I'm not seeing or -- 18 MR. McDONALD: Weightings related to the number of 19 customers on that device, no, you would not see that. Not 20 based upon the circle size. 21 MS. KUMMER: I think I heard you say that a lot of 22 the overhead damage was due to rear lot line construction. Do 23 you build rear lot line construction any more? 24 MR. McDONALD: No. Rear lot line construction was 25 really predicated upon the previous easements that we had and FLORIDA PUBLIC SERVICE COMMISSION 197 1 the construction standards not imposed by us, but imposed on 2 us. So when you had the platting of easements in some of our 3 older service territory, the easement was in the rear. 4 MS. KUMMER: So that is just primarily in the older 5 neighborhoods? 6 MR. McDONALD: That's correct. When you consider the 7 potential mitigation approach, and I think everyone has seen a 8 diagram like this or something very similar, starting at the 9 generation, moving to the substation via the transmission and 10 then to the distribution, what we have seen in our history and 11 our assessment of 2004 is the backbone, the feeders, if you 12 will, are something that we want to focus on and get back on 13 very quickly. When you look at the customer, when it comes to 14 the customer and the service drop to the customer, that is a 15 focus area that we need to consider in our plans going forward. 16 From an overall diagram perspective, there are three 17 areas that we are going to touch on. One, distribution, 18 mitigating the damage caused by the location, and also 19 considering the vegetation management. Transmission, looking 20 at targeted actions to harden those facilities. 21 More specifically, potential mitigation options. The 22 first one, evaluate a migration away from wood poles to steel 23 and concrete for transmission. The second arena we would 24 consider, furthe