Six energy companies Friday officially launched Grid Assurance, an independent company providing transmission sparing solutions for critical electric transmission equipment.
Michael Deggendorf, senior vice president, Kansas City Power & Light (KCP&L), was named Grid Assurance CEO and will oversee the formation and operations of the company. At KCP&L, Deggendorf has led FERC-regulated transmission business efforts, Transource and the development of Grid Assurance.
Grid Assurance was founded by affiliates of American Electric Power (AEP), Berkshire Hathaway Energy, Duke Energy (DUK), Edison International (EIX), Eversource Energy (ES) and Great Plains Energy (GXP) to enhance grid resiliency and give electric transmission owners faster access to long-lead time critical equipment necessary to recover from catastrophic events that could impact the nation's electric grid.
Several energy companies signed a memorandum of understanding to pursue development of Grid Assurance in June 2015. The companies sought and secured regulatory assurances from the Federal Energy Regulatory Commission for the structure and other components of Grid Assurance before officially launching the company.
"Grid Assurance is an industry-led, proactive response to the numerous potential risks facing our nation's transmission system including severe weather and catastrophic events like earthquakes or physical and cyberattacks," Deggendorf said. "By maintaining a readily available supply of critical equipment necessary to restore power delivery if the transmission system is severely damaged, Grid Assurance will help protect consumers and communities from the devastating impacts that delays in restoring electricity can have on quality of life and the nation's economy."
Deggendorf will bring on key management team members in the coming weeks. Marketing to and accepting subscribers will begin immediately, followed by ordering critical transmission sparing equipment based on secured subscriptions. A headquarters location for Grid Assurance will be determined in the coming months.
Restoring critical elements of the transmission system can be delayed by extended lead times required to design, build and deliver some replacement equipment including large transformers, circuit breakers and other specialized components of the system. Some transformers can take up to 18 to 24 months to build and deliver.
Grid Assurance will provide a readily available inventory of equipment at secure, strategically located warehouses in the United States and also will offer logistics support to facilitate expedited delivery of that equipment to affected sites following a qualifying event. Subscription to inventory and services will be open to all transmission owners. Qualifying events can include physical attacks, cyberattacks, electromagnetic pulses, catastrophic events, solar storms, earthquakes and severe weather events.
"Due to the benefits of inventory pooling, diversification and improved logistics, Grid Assurance is a more cost-effective, efficient way for transmission owners to prepare for high-impact, low-frequency events that could severely damage the transmission system, and there has been considerable interest from potential subscribers. It would be significantly more expensive for every transmission owning entity to independently procure and securely house the spare equipment necessary for recovery from rare, but potentially catastrophic events like earthquakes or a coordinated physical or cyberattack," Deggendorf said.
Grid Assurance services are intended to complement existing sparing programs at individual energy companies and established industry solutions. Federal agencies and policymakers have identified enhancing transmission system resiliency as a priority and critical to ensuring the viability of the nation's electric system. Grid Assurance is working with industry experts and government agencies to ensure that Grid Assurance is aligned with the federal government's efforts to secure the transmission grid. Subscription to Grid Assurance will serve as a permissible element of compliance with the resiliency requirements of the North American Electric Reliability Corporation.
Affiliates of American Electric Power (AEP), Berkshire Hathaway Energy, Duke Energy (DUK), Edison International (EIX), Eversource Energy (ES) and Great Plains Energy (GXP) are founding member companies of Grid Assurance, a limited liability company that offers cost-effective solutions for enhancing transmission system grid resiliency and faster access to critical transmission equipment following a catastrophic event.