Testimony of John McAvoy Chairman and CEO, Consolidated Edison, Inc.

Introduction

Good morning Chairpersons and to all the honorable members of the New York State Legislature. My name is John McAvoy and I am the Chairman and CEO of Con Edison.

I am joined today by my colleagues Tim Cawley, President of Con Edison Co. of New York and Robert Sanchez, CEO of Orange & Rockland Utilities.

We appear before you today to describe and discuss Con Edison’s preparations and response to Tropical Storm Isaias, a historically destructive storm which struck on August 4 and whose impact was felt from the Carolinas to Vermont. As I will explain, we were prepared for the forecasted storm and as the storm’s impact greatly exceeded forecasts, we responded aggressively in our restoration efforts.

I want to start by acknowledging that all of us at Con Edison and Orange & Rockland are keenly aware of how disruptive it is to be without power for a few hours – let alone for multiple days. The purpose of our existence as a Company is to provide energy to our customers safely, reliably, and sustainably, and when events like this occur, we see firsthand what a hardship it is for our customers, especially now, as people may be working from home, taking online classes and facing employment and financial struggles.

Next Steps, Continuous Improvement

Now that the event is over, there will be a series of both internal and external reviews, beginning with today’s hearing. Our internal review is already underway, and we have begun work on our required filings with the Public Service Commission.

These reviews are designed to self-assess and receive feedback to help us better meet our customers’ expectations during future events.

But before I get into the details of the storm impact and our response, I would like to first discuss some of the feedback we have already received from our customers, our municipal partners, the PSC, and from some of you here today.

We know that we must do a better job communicating with customers, municipalities, and elected officials. Though our communications have improved since Riley and Quinn in 2018, the outage map, which remained fully operational despite a four-fold increase in user volume, still displayed information that was confusing to some customers, customers still received some erroneous restoration messages, there were miscommunications with municipal restoration resources, and crew locations were not transparent enough.

While our municipal liaison program has improved significantly since Riley and Quinn, we need to do a better job of empowering those liaisons and the municipalities themselves with more information. And overall coordination with municipal resources, tree clearing partners, and other utilities needs to improve as well.

We made several adjustments to our mutual aid system for this storm that resulted in more crews on the ground ready to work as soon as the storm passed. But this is a critical area that warrants further attention.

We also heard feedback that some of the mutual aid workers were not working their full shifts or were working otherwise inefficiently due to not being familiar with the area.

All these issues deserve thoughtful diagnosis and remediation. Con Edison and Orange & Rockland have a deep seeded culture of continuous improvement, and we are committed to addressing these issues.

Pre-Storm Preparation

At Con Edison we prepare for all kinds of weather events year-round.

Our in-house meteorologists constantly track weather trends and model potential impacts on our system. And our entire workforce has emergency duty assignments – which we regularly drill – to ensure that everyone is fully prepared for storms and other emergencies.

We invest over $1 billion annually, including in storm hardening measures, in our electric system, and after Riley and Quinn, we began investing $25 million annually to fortify Westchester’s overhead electric-delivery system with stronger utility poles and wires, more smart switches on overhead lines to limit outages, and more breakaway wires to reduce a storm’s impact on the system. We estimate that these efforts resulted in 20 percent fewer outages during Isaias than we would otherwise have expected.

During high-wind storms like Isaias much of the damage to our system is caused by downed trees, that is why we routinely remove hazardous trees throughout Westchester and the O&R service territory. Con Edison spends about $12 million annually on a robust tree trimming program. After Riley and Quinn, we also established a pilot program in Cortlandt that identifies and removes hazardous trees from private property.

And we are more than halfway through installing smart meters throughout the Con Edison and O&R service territories. Once this project is complete, smart meters will help to improve the accuracy and timeliness of outage and restoration information.

We understand the importance of effective communication during an outage, which is why we also upgraded our information technology systems to improve the accuracy and timeliness of restoration information for customers who lose power during storms.

In addition to all these system-wide “Blue Sky” resiliency preparations, we also make necessary preparations for specific weather events, such as Isaias.

As forecasts became clearer that the Isaias would impact our region, we took many steps to prepare, including initiating internal storm preparations, requesting mutual aid, and retaining additional contractor crews to be on the ground, ready to respond as soon as the storm passed.

Finally, prior to the storm we also held calls with municipal and elected officials in Westchester, the Bronx, Queens, Brooklyn, Staten Island, and O&R to establish lines of communication, advise them of the storm’s anticipated impacts, detail our preparations, and provide an opportunity for questions and feedback.

Weather Event

We monitored Isaias as it formed and made its way towards our area up the eastern seaboard.

On Monday, August 3, based on information from the National Hurricane Center, we expected Isaias to pass just west of the New York City area, bringing sustained winds of 40 to 45 miles per hour and gusts of 45 to 60 miles per hour for New York City and southern Westchester. For O&R and northern Westchester, we expected sustained 15 to 30 miles per hour winds with gusts of 30 to 45 miles per hour.

Early on Tuesday, August 4, the forecasted path was roughly the same, with slightly stronger winds.

Of course, despite all these preparations, weather is unpredictable – and Isaias demonstrated that in dramatic fashion. Just four hours before the storm hit the New York City region, it suddenly and without warning tracked 30 miles to the west towards Pennsylvania. None of the weather models predicted this change in the storm’s track.

This change caused the storm’s strongest wind gusts – 60 to 70 miles per hour – to hit the New York City area, and wind gusts between 50 and 60 miles per hour to hit Westchester, Orange, and Rockland Counties.

What Happened: Post-Storm Damage

These extremely strong winds caused widespread destruction.

All told, nearly 330,000 Con Edison customers and nearly 190,000 Orange & Rockland customers lost power.

In Con Edison’s long history, only Superstorm Sandy caused more outages.

The damage wrought by Isaias to our system was extensive. Entire trees collapsed onto our poles, wires and other core infrastructure. This damage was so severe that we were required to entirely rebuild sections of our system rather than just repair them.

Isaias brought down thousands of trees across New York City, Westchester, and our Orange and Rockland service territories. The storm damaged 815 poles across both our service territories and blocked more than 600 roads in Westchester alone. In fact, in the days during and after Tropical Storm Isaias, Queens had twice as many tree removal requests as the New York City Parks Department handles in that borough in an average year.

Orange and Rockland also had widespread structural damage to its transmission system, with repairs requiring large-scale tree removal, and tower and cable rebuilds.

Isaias also caused incredible damage to surrounding areas. Roughly 3 million customers impacted from the Carolinas to New England, with 45 percent of Connecticut electric customers and 36 percent of New Jersey electric customers suffering power outages.

The amount of tree damage throughout the region was truly exceptional, even beyond what would normally be expected for a storm of this magnitude. That is why we are also examining what other meteorological factors may have contributed to the incredible number of trees that came down.

Rebuilding and Restoration Effort Begins

This storm was powerful but moved through our region quickly. As soon as it was safe to do so after the storm Con Edison overhead employees and mutual aid began work, completing 4,563 individual jobs to restore power to every customer.

It was at this point that we began the arduous task of conducting damage assessments, and clearing roads of trees, wires and other debris.

While the damage was extensive, the pace of restoration for this storm was significantly faster than previous major storms.

60 percent of customers were restored by the end of the second day of restoration, 75 percent by the end of day three, and 90 percent by the end of day five.

Rebuilding and Restoration: Mutual Aid

One of the reasons we were able to make such quick progress was the presence of mutual aid crews and contractors that we had secured prior to and immediately following the storm.

Mutual aid is a huge operation that must feed and house every person coming in to help, but it is one we were prepared for.

During regional weather events like this one, it can be challenging to get the full number of mutual aid crews we need before the storm because every other nearby utility is facing the same threat and cannot release their crews until it is clear how much damage they have.

We began requesting and securing additional crews four days before Isaias hit. After the storm passed and the extent of the damage became clear, we widened our search and began bringing in crews from all over the country.

Thanks to these efforts, we had a total of 1072 workers on site the day of the storm on August 4. As the event progressed, we continued to add resources to the response. Overall, during this restoration effort we applied 1.6 times as many overhead resources than we applied during the same period to Superstorm Sandy.

Rebuilding and Restoration Effort: Use of New Technologies

We also employed several new technologies during this storm response that aided our restoration efforts.

For example, we leveraged information from roughly 2.6 million smart meters to better understand the scope of an outage and prevent restoration crews from being sent to areas that had power. We will eventually be able to use smart meters to directly validate restorations as well.

Our crews also used a mobile damage assessment app that significantly reduces the time it takes assessors to transfer information to the engineer and coordinators that schedule crews.

And we utilized a variety of platforms to communicate directly with customers before and after the storm, including 4.1 million emails, and over 1.7 million text and automated call messages. On social media, we posted 148 times and replied to nearly 5,500 customer inquiries.

Rebuilding and Restoration Effort: Continuous Improvement

Because Con Edison is always striving to do better, after every event, we go back and do a thorough analysis of what worked, what didn’t, and what we need to do better next time.

Many of the corrective actions that we implemented following Riley and Quinn in 2018 were helpful for this storm response.

For example, we worked to improve our coordination with municipalities, working directly with them to prioritize road closures, and deploying liaisons to every municipality that requested one.

We started using right of first refusal contracts for some mutual aid contractors, which enabled us to have additional workers on site before Isaias hit. These contractors would have otherwise been sent to Florida, but our contract required them to check with us first, and we directed them to stay.

And, for the first time, we flew in 100 mutual aid workers, and provided them with trucks when they arrived, to get them on site and restoring power faster. Mutual aid crews typically must drive their bucket trucks and other equipment to wherever they are needed, which takes time.

Where Do We Go from Here?

As I mentioned at the beginning of my remarks, Con Edison was prepared for the forecasted storm and as the storm’s impact greatly exceeded forecasts, we responded aggressively in our restoration efforts.

We have implemented the PSC recommendations from Riley and Quinn and strengthened our system over the years to make it smarter and more resilient, but we know this is not enough.

Our customers have made it clear that they have no patience for incremental changes – especially when they are out of power for multiple days. And I, and we, all understand their frustration.

We are all dependent on electricity for most everything we do, so when the power goes out our lives are completely upended, and we can’t focus on anything else until it comes back on.

Ultimately, we are accountable to our customers, and under these type of extreme storm conditions, it is clear that we are not meeting our customers’ expectations.

It is also clear that destructive storms like these have grown stronger and more frequent as the realities of climate change take hold.

As an aside on climate, Con Edison was a supporter of the CLCPA and we recently unveiled our own Clean Energy Commitment which we believe will position us to be a leader in the clean energy future in our State.

Con Edison’s expertise is in reliably transmitting and distributing electricity – we were among the first to do it nearly 200 years ago, and today we are one of the most reliable electric utilities in the country.

We know what it would take to be able to restore 100 percent of customers within a day or two after a storm like Isaias.

It can be done, but it comes at a very high cost. It can only be done if there is first a frank conversation among all stakeholders about what achieving this level of resiliency would require. It is a conversation where your voices – the voices of policymakers and community leaders at all levels – are essential.

I hope we can start that conversation today.

There are three primary ways that we can reduce major outages and restore more quickly:

First, all the trees that are near power lines could be removed but I know none of us want to do that.

Second, we could underground the entire system. We have studied this in the past, and are open to continuing to explore the idea, but we all need to be honest about what undergrounding entails.

Previous studies have shown it would cost around $50 billion. This does not include how much customers would have to pay directly – roughly $15-$20 thousand each – to install new equipment on their homes and businesses to connect the new underground lines.

The third option is having more crews on standby to aid in storm restoration. As we demonstrated with Isaias, we are open to looking at new ways to increase the number of on- site restoration crews. However, the cost of retaining the necessary thousands of additional workers would be incredibly high.

Our customers depend on Con Edison to provide an essential service, and they understandably expect this service to be as reliable as possible. We understand this and work hard every day to meet that expectation.

But balancing expectations with costs for our customers is also critically important.

As always, we are open to your ideas and welcome your feedback and look forward to your partnership in an open, constructive, and productive dialogue as we work together in finding effective and achievable solutions.

Conclusion

2020 has been a tough year for everyone, and our employees are no different. They showed up every day during the worst days of the pandemic and every day during this long, hot summer. They work tirelessly to serve our customers safely and maintain what is typically the most reliable electric system in the country. I am extremely proud of them and the work they have done and continue to do.

Thank you for the opportunity to be with you all today, and we look forward to your questions.