FPL underground power cost change approved

TALLAHASSEE — A change in how the cost of conversion from overhead to underground power lines is calculated will save Palm Beach, Palm Beach Shores and four other municipalities an estimated $14 million.

Tuesday the Florida Public Service Commission approved a new formula for calculating the cost as requested by Florida Power & Light Co.

Municipalities will receive additional credits for the conversion. Previously, municipalities paid for the cost of removing overhead facilities that had not been hardened against storms and for the remaining value of the poles and equipment.

Since FPL expects to complete hardening its system in the next five to six years, the company said it will now give the municipalities credits for the removal of non-hardened lines and poles.

Juno Beach-based FPL’s storm-hardening costs are recovered from the general body of ratepayers through base rates.

Kevin Donaldson, an FPL attorney, told the commission the change how the costs are calculated will reduce the municipalities’ cost and incentivize those who want to switch to underground systems.

The municipalities of Palm Beach, Longboat Key, Palm Beach Shores, Key Biscayne, Sunny Isles Beach and Fort Lauderdale have either begun or are considering converting to underground lines.

FPL spokesman Bill Orlove said that a breakdown on how much each city would save is not available, but that collectively they will pay an estimated $14.2 million less under the new formula.

Palm Beach is in the midst of a nine-year $90 million undergrounding project. Work began last summer.

Palm Beach Shores Mayor Myra Koutzen said that in March vot-

ers authorized the town to borrow up to $5.5 million for the project.

“Right now we’re waiting for FPL to complete their plans so we can begin the construction bidding process,” Koutzen said Tuesday, adding that Hurricane Irma caused the project to be delayed.

Schef Wright, a Tallahassee attorney representing Palm Beach and Longboat Key, said he supports the new formula which correctly allocates costs where they should be allocated.

Orlove said about 40 percent of FPL’s main power lines are either hardened or underground.

“Either a hardened line or an underground line is going to produce the same result. It will enhance reliability and speed restoration efforts during a severe weather event,” Orlove said.

“A wind-blown event like Hurricane Irma, with trees and other debris going into the line would not affect an underground line,” he said.

All customers benefit from an undergrounding project, FPL said in PSC filings, because there’s a reduced need for storm restoration work in the converted area. That makes crews more available in other areas where lines might be damaged.

Historically, underground facilities have provided better reliability than overhead lines and poles.

During Hurricane Matthew in 2016, only 2.2 percent of FPL’s underground facilities experienced outages, while 9.4 percent of hardened overhead facilities and 13.8 percent of non-hardened overhead facilities experienced outages.

Day-to-day reliability improves with underground systems as well. A drawback is that locating the cause of an underground outage and repairing it is generally more difficult and time-consuming than it is for overhead, and the duration of the outage may be longer.