I-Team: Con Ed Dropped Plan to Upgrade ‘Relay' Systems Blamed for Blackout

An I-Team review of regulatory filings shows, for the last decade, Consolidated Edison delayed and ultimately scrapped a program to spend $350 million dollars to modernize “relay protection systems.” Those are the very parts of the electric grid blamed for last weekend’s West Side blackout.

Relay protection systems can be thought of as networks of circuit breakers that are supposed to contain electrical problems before they cripple multiple substations and cause full-blown blackouts.

In a statement released a day after the lights went out, Con Ed said a preliminary review indicated the West Side blackout was triggered when “the relay protection system at our West 65th Street substation did not operate as designed.”

According to documents filed with New York's Public Service Commission, as early as 2009, Con Ed was planning to spend $80 million on a project called the “Relay Protection System Redundancy Program.” In a filing from 2013, the utility expanded its budgetary forecast, projecting the plan might cost $350 million over ten to twenty years.

Despite budgeting for those upgrades. Con Ed ultimately declined to fund the project, each year filing capital expenditure reports that showed zeros next to the program's title.

Con Ed said budget projections for the “Relay Protection System Redundancy Program” were based on expectations that federal regulators would require more expensive improvements. When the Feds relaxed those standards, the utility opted for less expensive upgrades.

In a statement to the I-Team, Con Ed stressed the utility has spent about a third of the projected $350 million on improving its relay protection scheme. But those funds came from other parts of the budget.

"Con Edison has invested at least $215 million since 2009 on upgrading its relay protection system across our entire grid," the statement reads. "These investments meet or exceed industry standards and are part of more than $1.5 billion invested in our electric delivery system every year.”

Despite that assurance, Corey Johnson (D-Chelsea), Speaker of the New York City Council, expressed concern that Con Ed has not given an account of exactly what specific upgrades have been paid for – and whether the less expensive price tag means lower reliability.

"That is very, very disturbing. We need transparency and specifics to understand - did they make the critical crucial and necessary upgrades that they promised to do when they got two previous rate hikes.," Johnson said.

Though Con Edison did not itemize the $115 million spent on relay protection systems, the utility pledged to provide more details to the I-Team within a week.

New York State approves electricity and gas rates for public utilities based upon the budgetary projections those utilities provide. Currently, Con Edison is petitioning the New York Public Service Commission for a new 8.6% electricity rate hike – much of it based on the projected cost of new safety and reliability infrastructure.

Scott Stringer, the New York City Comptroller, said if the utility spent less than it pledged to spend on relay protection upgrades, ratepayers should see a refund.

“This is budgeting 101,” Stringer said. “if anything we should put a rate decrease on the table.”

Council Member Ritchie Torres (D-Bronx), who Chairs the city’s Oversight and Investigations Committee, also expressed concern about the abandoning of a $350 million project to upgrade relay protection systems.

“If taxpayers are paying the costs of higher rates without the benefit of modern infrastructure, that is a problem that requires and investigation,” Torres said.

Problems with relay protection systems are not new to Con Ed. Investigators said failures of those systems played roles in both a 1999 Washington Heights blackout and a 2006 blackout in Queens. After each of those incidents, state regulators recommended the utility review and work to keep its relay protection schemes “up-to-date.”

Richard Berkley, Executive Director of the Utility Law Project of NY, an advocacy group for rate payers, said the Public Service Commission would be justified in grilling Con Ed about relay protection schemes – before approving higher rates.

“To the extent that the company has learned from past blackouts that it needs to invest money into this part of its system to avoid the kind of problem that we had last weekend in Manhattan,” Berkley said, “it’s entirely fair to follow this line of questioning.”