On Dec. 15, E&E Powerline in Fredericton, New Brunswick, received a call from Central Maine Power. The utility was tracking a snowstorm aimed at the region, and expected to need help restoring electricity service after potentially extensive outages. Two days later, 45 Canadian workers and their trucks were on the road to southern Maine, to be in place for a weekend nor’easter that ultimately knocked out power to 122,000 CMP customers.

CMP might have waited until the storm’s damage potential became clearer. But by then, it would have been too late to lock down assistance.

“We were offered work by three different states and three other provinces in Canada,” said Robby Barrett, E&E’s emergency response coordinator.

E&E’s presence turned out to be fortuitous. Two days before Christmas, an even bigger storm left 300,000 CMP customers in the dark. The crews agreed to stay in Maine through the holiday to get the lights back on. They headed home on Dec. 28, 11 days later.

Staging thousands of external contractors to help restore power as quickly as possible after a storm has become the new normal in America’s utility industry. But this practice comes at a price.

Securing and accommodating an army of out-of-state lineworkers and tree crews has become the leading driver of storm restoration costs for CMP and Versant Power, Maine’s two investor-owned electric utilities, according to data reviewed by the Portland Press Herald/Maine Sunday Telegram.

For the Christmas storm, CMP had 637 line crews and, counting support staff, a total of 3,000 people working to restore power. Most every customer was reconnected within three days, an unprecedented response to such an intense storm, according to Peter Cohen, CMP’s vice president for regulatory issues.

Throwing all those resources at the storm is costly, Cohen acknowledged, but so are outages. Shaving time off restoration has a broad benefit for Maine society, he said, in an era when so much of work, school and home life depends on being connected.

“Every day has an impact,” he said.

Total restoration costs for the December storms haven’t been made public yet. But CMP already has estimated that each event was severe enough to top $15 million. The largest single share of that total is destined to go to hiring outside contractors.

STORM EXPENSES GROWING

Over the past five years, the average cost of storms considered normal or moderate in nature in CMP’s service area has totaled $27.2 million annually, according to Public Utilities Commission figures. But that doesn’t count storms like the two last month, which are deemed “extraordinary” if they exceed $15 million. CMP seeks to recover these costs outside normal rate cases, in special requests known as accounting orders.

And for the most part, customers end up paying these expenses over time, as part of the price of electric service.

Today, a typical home customer already is paying $3 to $4 a month to cover the cost of past storms, according to calculations done for the Press Herald by the Office of Public Advocate. That tab is bound to grow in the years ahead.

Two related factors are driving costs higher.

The first is that more-frequent and more-intense storms, linked to a changing climate, are causing more outages. CMP tallied 11 storms in 2020 and 2021 that knocked out power for at least 5% of its customers. Last year, the company recorded 10 storms that required help from external contractors.

But storm frequency and intensity are only half of the equation.

In the digital age, many Americans have become intolerant of losing power and internet connections, even for a few minutes. The resulting political and public pressure to recover quickly from outages is forcing utilities across the country to take unprecedented and expensive steps to secure crews days before storms strike.

The pressure has become especially intense in New York and New England since 2020, when Tropical Storm Isaias walloped the region. The storm caused days-long outages for millions and sparked state investigations that were critical of utility responses.

New York and Connecticut levied multimillion-dollar fines against their utilities, including those owned by CMP’s domestic parent company, Avangrid. In 2021, Connecticut regulators approved a controversial rule that slaps utilities with financial penalties if lights aren’t back on within 96 hours.

These lessons are not lost on CMP’s top management, and are reflected in testimony in a current rate case at the PUC.

“Customer and political expectations have also become a major driving force behind a more aggressive restoration philosophy,” the company noted.

That new philosophy has led to extreme staging measures in the region that have been observed by CMP executives. Some utilities have executed expensive retainer contracts with external crews. They can include a right of first refusal, minimum days of activation and lineworker bonus pay exceeding $1,500 per storm. Contractors also have purchased bucket trucks and parked them at the ready, for workers who can be flown in from as far away as California when a big storm is threatening.

CMP was able to bring some California lineworkers to Maine after the first December storm tapered off in New York and Connecticut, according to Adam Desrosiers, vice president for electric operations. The company so far has avoided retainer contracts, he said, but has had to find other strategies to compete with utilities to the south. One way is to build relationships with Canadian crews that are closer to Maine, such as E&E Powerline. Another is to look farther afield.

The roster of line and tree crews secured for the December storms by both CMP and Versant Power illustrates the point. They included: Carolina Power & Signalization of Fayetteville, North Carolina; Sparks Energy, Danville, Alabama; T&T Power Group, Wellesley, Ontario; Tempest Energy, Covington, Louisiana; Edgar Electric, Paragould, Arkansas; and Hot Wire Electric, DeMotte, Indiana.

Only four weeks into 2023, CMP has also had to lean on Canadian help and external crews to respond to a trio of storms that blew through Maine within seven days, beginning Jan. 19. Heavy, wet snow from the Jan. 23 storm left 51,000 customers in the dark, many in York County. CMP had staged 200 additional line crews that were joined by 100 crews from Canada. They remained in place for the Jan. 25 storm, which brought snow and heavy rain, and roughly 10,000 outages. The price of all this preparation and response has yet to be tallied.

COSTS ADD UP

One factor that inflates costs is the demanding schedule asked of crews, to speed recovery after a storm strikes. Per state law, they are able to work a maximum of 17 hours, with seven hours of rest. The International Brotherhood of Electrical Workers local declined to discuss its union wage rates, but CMP said a typical first-class lineman earns $44 an hour for regular shifts, with added wages for overtime.

CMP has roughly 100 lineworker crews on staff, a crew being two workers and a bucket truck. They can be augmented in a storm with 53 external contractor crews that work regularly on CMP’s system. Workers from Avangrid affiliates in Connecticut and New York also may be available, depending on weather there.

Contractor invoices are filed at the PUC after storms, but they’re confidential, so the public can’t see the specific charges. But according to CMP, securing a typical contractor crew made up of two workers and a bucket truck costs the company between $400 and $500 an hour, a bundled package which includes wages for 17-hour shifts, fuel and equipment.

Those expenses don’t include meals or lodging. The package cost also doesn’t include pay for the internal staff, numbering 1,000 or so, who work behind the scenes to make all the arrangements and supervise the field work.

For reference, the Press Herald reviewed a summary of costs for an April 9, 2020, wind and snowstorm. It was similar to the Christmas event, cutting power to 280,000 customers. The data show that CMP paid $18.2 million in capital costs for external contractors, compared with less than $3 million for its own labor force. The bundled contractor labor rate was $211 an hour per worker.

A spreadsheet filed at the PUC for the April 2020 storm offers further insight into the scope of coordination needed to keep workers housed and fed. Meals and lodging are a fraction of the contractor construction costs – $1.3 million compared with $18.2 million – but the sheet lists more than 1,400 individual receipts submitted. They range from $2.75 at Dunkin’ to $40,915.60 for Comfort Inn & Suites.

Food entries include: Amato’s, Portland, $12,762.23; Bridgton House of Pizza, $529.77; and Applebee’s Grill, Waterville, $150.72. Hotel tabs include: Belfast Harbor Inn, $14,373.83; Microtel Inn & Suites, with a total of 32 entries at $258.33 each; and Rockland Harbor Hotel, with a total of 21 entries of $265.96 each. Random expenses include $19.91 for bottled water from Hannaford Supermarkets and $190 for a portable toilet at a mobile command center.

When the crews from E&E Powerline arrived, they were assigned to areas in Oxford and Cumberland counties. They stayed first at the Bethel Inn. CMP prepared box lunches for them and they ate supper at Sunday River Brewing Co.

“We had nice accommodations and were fed well,” Barrett said. “The crew got a good sleep.”

Two days before Christmas, workers were moved to the DoubleTree hotel near the Maine Mall. They worked shifts from 5 a.m. to 10 p.m. and from 3 p.m. to 8 a.m. Despite the hard hours, Barrett said his workers were flattered by the graciousness of the Mainers they met, including residents who offered them coffee and treats.

“The hospitality we received, the guys are still talking about it,” Barrett said. “Very appreciated. We couldn’t have been used any nicer.”

COMMON CONCERN

The pressure on CMP to stage crews also was being felt by Versant Power, which serves eastern and northern Maine. The company saw only minor outages in the first December storm, but braced for a potentially historic event on Christmas Eve.

CMP and Versant can’t simply guess at how much restoration help they’ll need. They base staging decisions on an elaborate set of guidelines in PUC-approved emergency response plans. These plans use custom weather forecasts, past experience and industry best practices to match contractor resources with expected outages. Versant’s plan features a matrix that includes the level of severity, number of outages expected and estimated hours for restoration. These calculations are later used to justify cost recovery at the PUC. The agency has scheduled a March 1 review of CMP and Versant’s emergency responses to the Christmas storm.

“You want to show you have enough people to get the job done, but you need to be prudent with ratepayer money,” said Judy Long, a Versant spokeswoman. “There’s a constant balancing act.”

For many years, utilities have helped each other recover from storms through regional clearing houses, such as the North Atlantic Mutual Assistance Group. But that process doesn’t address today’s intense competition for staging.

Long said external contractors have become Versant’s top restoration cost, as the company is being forced to spend more money to lock down lineworker and tree crews early, before they’re committed to another utility. For the Christmas storm, Versant was able to secure some private line crews working on maintenance projects on its system, who otherwise would have headed south.

“Because the same storms often hit southern New England before arriving in Maine,” she said, “it makes it more difficult and expensive for Versant to obtain contractors.”

Staging typically isn’t the top restoration cost for Eastern Maine Electric Cooperative in Calais. But the Dec. 17 storm was strong enough for the company to call in seven additional line crews and three tree crews to assist its in-house staff of 14 lineworkers. Even so, it took four days to get everyone back online.

Eastern Maine was able to attract outside utility workers from Massachusetts through its mutual aid agreement with the Northeast Public Power Association, along with some contract crews. Invoices are being tallied, but it’s possible that external labor will be the leading restoration cost for the December storm, according to Charlie McAlpin, the co-op’s spokesman.

“Outside crews will sometimes be the No. 1 cost for us in storm recovery,” he said, “but it depends on how many crews we have to call in, and how long we need them.”

Eastern Maine has 12,500 customers, spread over a remote, 3,000-square-mile service area along the Canadian border in Washington and Aroostook counties. By comparison, Versant serves 159,000 customers over 10,400 square miles. CMP serves 653,000 over 11,000 square miles.

STRIKING A BALANCE

As stronger and more frequent storms inflate restoration costs, utility regulators also are feeling pressure. First, they need to make sure expenses are justified. Then they have to decide when customers must pay – sooner through a rate case, or later through an accounting order.

Versant and CMP have different ways of accounting for storm costs at the PUC. The mechanisms are complicated, but basically, companies can request an accounting order when they tally “extraordinary” costs exceeding certain thresholds. These are important benchmarks, because accounting orders allow utilities to defer recovery into future years. The aim is to keep near-term rates as low as possible, saving customers from paying for a string of expensive storms all at once.

“You’re trying to strike the right balance,” said Philip Bartlett, the PUC’s chair. “How much to build into rates, how much to deal with in an accounting order, and deciding how much to put into rates over one, two or three years.”

But in an era of more-frequent and intense storms, there’s a growing concern. Pushing expenses into the future may not ease steep restoration costs, if bills continue to pile up.

“If you defer too many costs,” said William Harwood, the state’s public advocate, “you end up with tomorrow’s ratepayers subsidizing today’s ratepayers. That’s not good policy.”

Mounting storm costs and how to allocate payments are key issues in CMP’s current rate case at the PUC. For the Christmas storms, both Versant and CMP say they will file accounting orders.

Aside from paying for past costs, there’s also pressure to harden the electric grid to prevent outages in the first place. That means stronger poles, coated wire that resists short-circuits, and automation to get circuits back when trees and branches fall – the leading cause of outages in heavily forested Maine. CMP and Versant want more money to strengthen their systems, another major issue for the PUC to decide in the current rate cases.

Grid hardening also is likely to emerge as a talking point in the public power campaign. Voters will decide this November whether to endorse a controversial plan to buy out the assets of CMP and Versant and form a consumer-owned distribution company. Supporters will argue that a public company could borrow money to upgrade the grid at lower rates than investor-owned utilities, reducing outages and costs in the long run.

Long, the Versant spokeswoman, said some people will always be frustrated when power is not restored as quickly as they’d like. She said the company remains focused on getting electricity flowing safely, as soon as possible, and isn’t responding to the public power threat.

“There may be external pressure,” she said, “but in-house, we try to not be distracted by that.”

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