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Grid Assurance gets first subscribers for US spare transformer program

Several major electric utilities signed on as initial subscribers to Grid Assurance LLC's U.S. spare transformer reserve program, the company announced May 16.

Those subscribers — American Electric Power Co. Inc., Berkshire Hathaway Energy subsidiaries MidAmerican Energy Co. and NV Energy Inc., Eversource Energy, FirstEnergy Corp., Kansas City Power & Light Co. and National Grid PLC — and their affiliated transmission-owning divisions have transmission facilities in 26 of the 48 lower continental states.

"As subscribers of Grid Assurance, these companies increase their grid resilience by having access to critical transmission equipment required to quickly recover from catastrophic events while increasing the industry's spare capacity of domestically located transmission equipment," Grid Assurance CEO Michael Deggendorf said.

The subscribers' decision to join the program is pending any needed regulatory approvals. Grid Assurance said orders for equipment will be placed later in 2018, with deliveries expected to start in mid-2019.

A group of utilities, including several of the new subscribers, formed Grid Assurance to maintain an inventory of critical "long-lead-time" spare transformers to help utilities respond to major grid disruptions stemming from natural disasters, man-made cyber or physical attacks and other events. In March 2016, the Federal Energy Regulatory Commission found that investment in the program was prudent and that utilities wishing to recover their costs under the initiative must submit a rate filing under Section 205 of the Federal Power Act.

In addition to Grid Assurance, the industry has developed other programs meant to ensure that utilities can replace transformers — which are expensive, difficult to transport and often manufactured outside the U.S. — as quickly as possible following a widespread blackout. FERC signed off on the Edison Electric Institute's spare transformer equipment program in 2006 and in April provided advance approval for the transfer of certain FERC-jurisdictional assets among signatories to the regional equipment sharing for transmission outage restoration, or RESTORE, agreement.