Regulators and utilities: Driving savings, safety, and satisfaction for ratepayers through technology-enabled vegetation management
It’s a complex mix of responsibilities and requirements that keep the power on.
How does the relationship between regulators and utilities and the customers they serve work? And where can teamwork and technology improve things?
That’s what Lawrence J. Kahn is evaluating in his work as Visiting Research Fellow at Tulane University Law School and as Creator and Director of Tulane’s Utility Vegetation Management Institute (UVMI).
He sat down with former Vice President, Distribution Services at Entergy and and Host of AiDash’s State of Vegetation Management live events, Gary Huntley, to discuss how utilities and their work with regulators and data-driven technologies compare: How do approaches differ in topographical, cultural, and political regions? And where are best practices for services and savings evident — especially those built on innovative technologies?
Watch a recording of the live event now or read on for 3 key takeaways.
Takeaway 1: Regulators want to reduce power outages, but they are unsure of the next move.
The U.S. Department of Energy estimates power outages are costing American businesses around $150 billion per year.
What reactions has Kahn observed to these losses?
Utility customers are frustrated and want outages to stop without service charges and their own insurance rates rising.
Utilities want to embrace new data-driven technologies to mitigate the conditions that cause these losses, including tree and power-line conflicts, as well as aging infrastructure.
Regulators are under significant pressure and want to take the actions that will answer these concerns and ensure reliability. But they are often unsure of the next move as many do not have familiarity with new technologies and question whether utilities are directing their budgets in the right direction, Kahn explained.
The challenge, he said, is that today’s regulators and utilities must maneuver around climate-driven storms and wildfires, as well as differing cultural and political approaches, depending on their region.
Culturally speaking, more liberal areas are more willing to allow regulators and utilities to enact policies that may restrict personal property rights — to improve wildfire protections, for example. In areas that are more conservative such restrictions may be out of the question, so they will look at how they can maneuver for greater efficiencies within existing laws and budgets.
Dangerous sag and sway on power lines can be caused by even an eighth of an inch of ice — which can weigh as much as 500 pounds.
Climate change is driving more intense weather issues. For example, Kahn referenced recent research that looked at Texas’ infrastructure: It was not designed to handle ice storms, which are occurring more frequently with high potential to cause outages. Sag and sway on the power lines due to ice can cause the lines to dip down to tree and vegetation levels that previously would have been clear of the lines.
Regulators are also pressured to keep local jobs in mind when enacting plans to move to different approaches to produce energy — away from coal, for example. “You’re going to need to answer to all those constituents who might lose their jobs,” said Kahn. “That’s political pressure that’s neither blue nor red. It’s practical.”
Takeaway 2: Remote sensing can help. It’s time to harness it.
The main two types of remote sensing being looked at right now are satellite (multispectral) and LiDAR. Both are augmented using artificial intelligence.
Satellites can pick up a lot of different kinds of information by looking down on Earth, and there are enough in orbit to monitor every square foot of ground every day.
LiDAR, often deployed by plane, uses laser light to measure distances and generate detailed maps of the environment, with extremely good resolution.
However, the cost of LIDAR is much higher than satellite remote sensing. And the time it takes time to process LiDAR data and get it into usable form for the utility is lengthy.
Remote sensing satellites deliver 90%+ accurate readings.
Kahn recently led a Tulane UVMI study to determine accuracy of vegetation management solutions using satellite technology as processed through artificial intelligence, and their usefulness in detecting tree and power-line conflicts. The study found that:
- More than 90% of the time, the satellite was finding the correct issues.
- Scoring for detecting growth coming from the sides of rights of way (ROWs) was 95% and above.
Kahn recalled an instance during the research when satellite remote sensing found a hazard tree, and an arborist commented that even with a level 3 California-style inspection — walking along the ROW, circling every single tree, probing the roots, gaining elevation to look down — that hazard would have been missed. It was located off the ROW and looked green and healthy from the ROW perspective. But the other side showed that it was a dead tree. And this was a tree that was tall enough to hit the power line and cause an outage and/or a wildfire.
This topographical data can be especially helpful in determining how to address a maintenance issue as well. Is a bucket truck needed? Can it be used safely on the terrain? Or does the situation require a crew member to climb to make the trim?
Remote sensing can make the difference in a utility knowing what is needed and where — moving workflows much faster and with greater safety.
Takeaway 3: Savings wanted? Consider a capex approach to budget and a data-driven approach to workflow.
Should utilities use capex funds rather than opex funds for vegetation management?
Kahn is investigating this topic with fellow researcher Pierre Connor, director of the Energy Institute at Tulane’s Business School.
Currently, most utilities fund vegetation management as a part of operating expenses and must apply to regulators for exemptions to use capital expenditures for any maintenance activities.
Kahn explained, “For vegetation management, I think that the whole reason that it’s opex right now traces to a mistaken interpretation of GAAP, the Generally Applied Accounting Principles, which refers to certain things that can never be capitalized: for example, landscaping.” Vegetation management gets categorized not-so-accurately under the landscaping category.
Utility companies often borrow money at higher opex rates for their work. If that work is financed as capex rather than opex, lenders are happier to give lower rates, because capital expenses are secured against an asset.
If the “cheaper” money was used, Kahn pointed out that ratepayers would benefit. They would experience fewer demands to pay higher rates, because the work would be done less expensively. And that makes regulators happy.
Other wins come from utilities putting remote sensing technologies to work. As mentioned above, using the satellite view to determine what terrain requires which equipment saves time and money.
Every time a utility sends a team out with a bucket truck, the cost is about $400 per hour.
“Utility companies might have to pay as much as $400 an hour for a crew to go and do some work,” Kahn explained. “And when that work is maybe an hour or two away from their yard, then you’re paying $800 for them to get there.”
But what if they’ve brought a bucket truck and it’s not the right topography for a bucket truck? That’s a loss of $800 — a lot of wasted money that makes for unhappy ratepayers and voters, which hurts both regulators and utilities.
Data-driven insights provided by remote sensing can avert these mistakes and related losses. The technology is well worth consideration by utilities and regulators.
For the full State of Vegetation Management live event with Host Gary Huntley and Tulane’s Lawrence Kahn click here.
Or get more information about AiDash Intelligent Vegetation Management System here.
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