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Duke Energy: Plant, purchase failures contributed to outages


Duke Energy Corp. executives on Tuesday blamed a convergence of widespread extreme cold, higher than projected demand, malfunctioning plant equipment and the inability to buy power elsewhere for rolling blackouts on Christmas Eve — the first for the company in the Carolinas.

Addressing state electric regulators, company leaders apologized because about 500,000 customers, or 11%, of its Duke Energy Carolinas and Duke Energy Progress subsidiary customers were subjected to the designed temporary outages, often with little notice. While power was restored to everyone before the sun went down Dec. 24, morning temperatures fell into the single digits and afternoon highs failed to reach freezing in many areas.

"I want to express how sorry we are for what our customers experienced," Duke Energy Carolinas CEO Julie Janson told the North Carolina Utilities Commission at a briefing. "We own what happened. We have set out on a path to ensure that if we're faced with similar challenges, we will see a different outcome and provide a better customer experience."

The outages came a day after 300,000 customers lost power amid plummeting temperatures and high winds that knocked down lines as a monster winter storm approached the East Coast. Restoration was nearly complete by that evening. At that time, the two subsidiaries for the Charlotte-based utility still projected having enough energy production reserves to meet peak demand the next morning, said Sam Holeman, a transmission system vice president.

But power generation at three North Carolina plant locations — coal-fired Mayo and Roxboro and natural gas-powered Dan River — were essentially cut in half early Dec. 24 when insulated instrumentation lines froze, Duke executives said. Meanwhile, already contracted purchases of electric power on a regional transmission system didn't happen because neighboring utilities had no supplies to share.

Faced with the threat of uncontrolled demand outpacing supplies and leading to widespread outages within the Eastern U.S., Holeman said the two subsidiaries began "load-shedding" events — rolling outages — beginning shortly after 6 a.m.

"We will strive to lower the probability that this type of event happens again, but if we have similar conditions in similar operating environments in the future, our operators will take the same actions," he said.

The rolling outages are supposed to be automated and last only 15 to 30 minutes. But the automation tools didn't work as anticipated, according to a presentation, forcing the utility's distribution control center to shut down hundreds of circuits manually. All of the circuits were restored by around 4 p.m.

Duke executives said communicating this event to customers fell short, especially as it became clear that rolling outages would extend beyond 30 or even 60 minutes.

"We're committed to developing a much better understanding of these events and what we can do to avoid rolling service disruptions and improve communications in the future," Duke Energy North Carolina State President Kendal Bowman said.

The seven-member commission, chosen by Democratic Gov. Roy Cooper, asked many questions and sought more information but largely avoided directing blame upon anyone for what happened. The Federal Energy Regulatory Commission is also looking into what happened.

After raising concerns publicly last week about the outages, Cooper met with Duke Energy CEO Lynn Good and other company executives later Tuesday and covered similar topics as the commission, according to a news release from the governor's office.

Cooper "expects to continue to be informed about the steps Duke is taking to prevent this from ever happening again," the release said.

State utilities Commissioner Floyd McKissick said Duke's customer notification system needs to be upgraded as soon as possible so people who could be harmed by the loss of power — such as the elderly or those with medical needs — can be prepared.

"The only thing customers want to know is that power is there when it's" needed, he said.

McKissick also cited the utility's power demand modeling, which Duke executives acknowledged was based on data from past weather events that didn't account for the unique confluence of circumstances last month. They included what Holeman called the lowest December temperatures since the 1980s, low dew temperatures and wind chills, all during a holiday weekend.

The briefing came just four days after the commission issued a separate order detailing actions that Duke Energy must or should take to meet a new legislative mandate to reduce carbon dioxide emissions 70% by 2030 compared with 2005 levels.

The rolling outages happened as a massive freeze in the eastern U.S. caused outages and led the regional transmission operation of which North Carolina is a member to urge states to conserve electricity through Christmas morning. The Tennessee Valley Authority also directed local power companies to implement planned interruptions.