In some cases, a utility participating in the Spare Transformer Sharing Agreement may need to acquire, or acquire the right to, less than a whole transformer. Such utilities may choose to join with a small group of other utilities to acquire spare transformers. The utilities working on the development of the sharing agreement recognized that a joint procurement program might be helpful to some utilities and considered creating a special, not-for-profit entity for that purpose. One example of such a program is the nonprofit Pooled Inventory Management (PIM) program. Since 1980, this program has operated to acquire, store, and maintain long-lead-time spare parts for the nuclear industry. The PIM program has agreed to pursue development of a PIM spare transformer equipment program.

Technical meetings to work out the actual design specifications and required commitments for participating utilities will be held at least annually as part of this process. Also, the North American Electric Reliability Council has a listing of spare transformers that could be made available to a utility faced with a significant loss due to terrorist activity.

Participants in STEP recognized that FERC approval would be required for transfers of transformers under the sharing agreement. Under Section 203 of the Federal Power Act of 2005, FERC must approve the sale or disposition of jurisdictional assets in excess of $10 million. To expedite the process of transfers, participants petitioned FERC and received pre-approval of the transfer of spare transformers from one utility to another in the event of a terrorist attack. In its approval, FERC also determined that the sharing arrangement is prudent, which will support participants that seek to recover the costs of participation through rate setting. FERC believes that participation in STEP will increase transmission owners” emergency recovery capabilities by providing access to more spare transformers at lower cost. Participating utilities will also be seeking similar approval from their respective state commissions to ensure that they are able to recover the costs of acquiring spare transfers under the program.

As promising as STEP may be, it alone is not sufficient to address the vulnerabilities that the United States faces in the event of a large physical attack on the high-voltage substations of the power grid. There are not enough spares available to replace all those that might be lost in a terrorist attack. Furthermore, because of their size and variations in design, sufficient spares cannot be moved rapidly enough to provide needed recovery. With this in mind, EPRI (2006) has undertaken a project to build and test a compact “restoration transformer” that would be small enough to easily transport.4 In order to reduce the size so that the device can fit into large cargo aircraft and move on trucks through underpasses, the transformer would run hot (and thus waste more energy than a conventional transformer). That would make operation too expensive for routine use, but it would allow much more rapid restoration of service than is now possible. EPRI describes the recovery transformer as:

a new type of emergency spare high-voltage network transformer that is lighter than existing transformers, smaller, easier to transport, and faster to install and energize during recovery from severe high-voltage transformer outages induced by equipment failure, weather, earthquakes, or terrorist acts.

After the terrorist attacks of September 2001, EPRI started the Infrastructure Security Initiative (EPRI 2005b), which identified the need to determine the technical feasibility of developing and testing a new high-voltage network transformer that is easier to transport and install than existing spares. The design was completed during Infrastructure Security Initiative work efforts and included tradeoff studies of capacity, impedance, and dielectric withstand strength, and voltage transformation ratios. These efforts resulted in the development of detailed specifications and electrical designs that covered a variety of North American network transformer voltages and megavolt ampere (MVA) ratings. The work also identified all mechanical components and field installation processes necessary to support the expedited transport and installation of the transformer... . Compared to existing transformers, this new type is characterized by the following:

•  Cost: about 20 percent lower

•  Weight: about 25 percent less

•  Size: about 25 percent smaller

•  Efficiency: about 99.0 percent (vs. 99.8 percent)

•  Operating temperature: about 155°C (vs. 110°C)

•  Installation time: about 48 hours (vs. weeks)

•  Design life: 35 years

The time to install the transformer can be dramatically reduced through specialized storage and preparation-for-shipment techniques, specialized processing equipment and techniques, rapid deployment and transit, trained installation personnel, preparation of the installation site, and installation testing. Specifically, transformer condition should be carefully maintained during storage so that there are no “condition surprises” during installation. Oil monitoring systems will detect moisture and harmful chemicals to verify transformer readiness for use and conduciveness of the storage condition to immediate energizing. Prior recovery transformer work determined that careful management of relocation and reassembly is critical to reducing the total recovery time. For example, the use of draw lead or draw rod bushings (for higher current applications) will save many hours of installation time by eliminating the need to enter the transformer and reconnect primary current-carrying joints. Modularization of the cooling and oil expansion systems will reduce installation time: single cooling and oil expansion modules allow for module location at multiple storage sites and shipment and combination to serve various sizes of recovery transformers. (EPRI, 2006, p. 1)

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4See also NRC (2002) and Stiegemeier and Girgis (2006).



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