On Aug. 16, 2012, D.C. Mayor Vincent Gray established the Mayor’s Power Line Undergrounding Task Force (Task Force). The purpose of the Task Force was to pool the collective resources available in the District of Columbia to analyze the technical feasibility, infrastructure options and reliability implications of placing new or existing overhead electric distribution facilities underground in the District of Columbia. The Task Force determined that improvements to the District of Columbia’s electric distribution system to enhance its resiliency and reduce power outages caused by storms would require new investment. The Task Force identified a funding process that allowed the District government to use its authority to significantly lower the cost of borrowing and to work in conjunction with Pepco’s traditional funding and rate recovery mechanism, reducing the impact on District of Columbia utility customers, as the most prudent method for funding these improvements.
On March 7, 2014, the Council of the District of Columbia passed what became the Electric Company Infrastructure Improvement Financing Act of 2014 (the Act). Following mayoral and congressional review and publication in the District of Columbia Register, the Act became effective on May 3, 2014. The Act required the District Department of Transportation (DDOT) and Pepco to jointly file with the Public Service Commission of the District of Columbia an application for approval of their Triennial Underground Infrastructure Improvement Projects Plan (Triennial Plan Application) and an Application for Issuance of Financing Order under the Electric Company Infrastructure Financing Act (Application for Financing Order).
The name chosen for the initiative to place power lines underground is the “DC PLUG” initiative, which is short for “District of Columbia Power Line Undergrounding.”
The DC PLUG initiative is expected to improve reliability and resiliency for our customers who are served by the selected feeders by approximately 95 percent. The areas designated to be included in the initiative will include the high-voltage feeders most affected by overhead-related outages in Wards 3, 4, 5, 7 and 8, where overhead distribution lines currently exist. In addition, even though a select number of feeders will be placed underground, the DC PLUG initiative will improve overall reliability and resiliency for all District of Columbia customers.
About half of the District of Columbia is already served by underground power lines. After lines are placed underground, there will still be secondary and service lines running overhead on the existing poles. Typically, these facilities are a small factor in outage events. Historically, outages on these circuits are not prolonged. Restoration time for these low-voltage lines normally is much shorter than restoring the high-voltage primary lines, which can require several hours for repair.
The Act authorized a billion dollars for use in the DC PLUG initiative and required a unique financing arrangement in which each of the District Department of Transportation and Pepco contributes approximately 50 percent of the total financing. The funds will be obtained through a combination of Pepco’s traditional funding of debt and equity for $500 million, $375 million in District-securitized bonds, and between $62 and $125 million in DDOT improvement funds. Should the Public Service Commission of the District of Columbia approve the plan, these funds will be recovered through two surcharges on customer bills.
For more information on the DC PLUG initiative, including
current status, visit dcpluginfo.com.