Module 5 – Continuity Plan for Wisconsin Xcel Energy
Introduction
Xcel Energy is a United States investor-owned electricity and natural gas company with annual revenue of $10.3 billion. It performs regulated operations to provide energy to customers in eight Midwestern and Western states - Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas, and Wisconsin. Based in Minneapolis, Xcel provides a comprehensive portfolio of energy-related products and services to approximately 3.4 million electricity and 1.9 million natural gas customers through four utility subsidiaries—Public Service Company of Colorado (PSCo), Southwestern Public Service Company (SPS), Northern States Power Company-Minnesota (NSPM), and Northern States Power Company-Wisconsin (NSPW).
Xcel operates major generating facilities that use a variety of fuel sources including coal, natural gas, nuclear fuel, water or hydro, oil, refuse, wind, and sun. In total, Xcel plants are capable of producing more than 17,000 megawatts (MW) of electricity. One megawatt of power generated by fossil fuels or nuclear fuel provides enough electricity to serve 750 typical homes. Also, Xcel generates approximately two-thirds of their total power and buy the remainder from other electricity suppliers to meet their vast customers’ energy needs.
The unit at NSPW, Michigan Electricity and natural gas service is presided over Mark E. Stoering, President and CEO. The Wisconsin unit serves 250,571 electricity customers and 106,844 natural gas customers, with a focus area grant of $143,050.
Xcel Energy generates over 500 MW of hydroelectric power from 27 plants in Wisconsin, Minnesota, and Colorado. They also purchase large amounts of hydro-generated electricity from Manitoba Hydro. Xcel Energy follows the strategy of “Building the Core.” They invest in core businesses to provide safe and reliable energy to customers at a reasonable price. They are commitment to the environment and their communities.
Key Elements of the Supply Chain Relevant to Xcel Wisconsin
Xcel is connected to the communities that they serve through active and ongoing investment in their infrastructures and through supply chain spending practices. They contributed more than $1.8 million directly to chambers of commerce and economic development organizations in communities across their service territory in 2011. Suppliers play an important role in growing and operating effectively, and the money spend through the supply chain adds to the overall prosperity of the communities. In 2011, Xcel spent nearly $3 billion with suppliers, of which, 56% was spent with local suppliers.
Xcel Wisconsin supply chain spending was $121,583,160 in 2011. Xcel Wisconsin offers its residential customers rebates for high-efficiency appliances and systems such as electric water heaters, thermal storage, programmable thermostats, high-efficiency gas furnaces, and boilers. In addition, Xcel Energy offers special rates for off-peak hours through the Optional Off Peak Rate program as well as the Saver's Switch program for residential customers.
The Effects of Business Disruptions/Emergencies
Wisconsin’s energy output constitutes a significant portion in Xcel’s overall power generation. Disruption due to emergencies at this plant may substantially affect employees and their families as well as the residential and small business-owner customers.
Potential emergencies. Some of the major emergencies that may occur in power plants include the following:
Turbine wreckage might include its break apart, blades blown-up, thru casing, vibrations leading to generation interruption, and class E fires. These emergencies may occur because of uncontrolled high revolutions, humid steam, frictions, imbalance of rotors or main shafts, insufficient warm-up, linkage of water and steam pipes, damaged thrust bearing of the turbine shaft, and closure of nozzle valves.
Bad weather and heavy rain can wash away a holding-pond dike leading to bigger issues. This may also get triggered by a tornado or a bomb attack.
Coal-burning plants produce approximately one-third of CO2, 40% of mercury, one-quarter of NO2, and two-thirds of SO2. Airborne mercury is raining on Wisconsin's lakes, streams, and waters. A 90% reduction in mercury emissions from coal-burning power plants and other large industrial sources are required to ensure safety in eating fish from Wisconsin waters because mercury is a potent neurotoxin that selectively damages the developing brain. In adults, symptoms include loss of feeling in the extremities, impaired vision, hearing and taste, and memory loss. Mercury emissions occur at approximately 25 lbs/100 MW at an average coal plant. Also, Environmental Protection Agency (EPA) contends that SO2 promotes heart disease and asthma, while NO2 destroys lung tissue. Another offender, particle matter, is estimated to cause approximately 13,000 deaths annually.
Overall, poisoning of fish reservoirs and pollution of clean water due to spills of hazardous toxins or waste like barium, arsenics, manganese, lead, chromium, sulfur dioxide, and mercury from holding-ponds and radioactive contamination due to leakage of radionuclides form potential environmental hazards.
Environmental Emergency and Unit Operations Sudden Stop
Prevention. Realizing the imminent threat to public health, the environment, and the business continuity, Xcel Wisconsin takes action even before governmental measure that forced aging coal-power generations plants to meet increasingly strict emission control standards was mandated. They have taken upon themselves to take preventive actions including close monitoring of weather trends, heavy security, engineering measures, emergency drills, plans and training for emergencies, and close relationship with emergency preparedness.
In late 2011, EPA enacted new requirements to control hazardous air pollutants, such as mercury and other gases from coal-fired generating plants. In addition, rules to address greenhouse gases, coal ash, water discharge, and a number of air-quality issues such as ozone and fine particulate matter are also underway.
Xcel Energy has partnered with “Focus on Energy” to bring Express Energy Efficiency Program to Sparta, wherein homeowners and small business owners can learn to save energy and money and other benefits. Xcel Wisconsin plant has spent $973,215 as community investment for environmental causes.
Xcel Energy works closely with the city and emergency preparedness teams to let customers know if electric system is still energized. Communications focused on the care needed to ensure safety, as they advised customers on how to work on service disconnections after waters recedes. Each of Xcel’s operating companies has their own Transmission Integrity Management Program and Distribution Integrity Management Program, which is a regulatory requirement. Through these efforts, they assess pipeline conditions, recheck them periodically, and develop plans to ensure safety and reliability.
Also, a company-wide initiative—24/7 Safety—was launched in 2011 with three campaigns to encourage employees and their families to take on a safety mindset and think about safety always.
The Emergency
Recognizing an imminent calamity and difficulty is not possible. Therefore, it is wise and practical to be prepared, to read the signs, and to dwell on instincts that dictate potential horrors.
The staff at Xcel Energy Wisconsin has consciously taken up training to be prepared for situations. Xcel Energy works with the city’s emergency preparedness team to protect public safety in danger areas. Residents have been asked to contact Xcel Energy at 1-800-895-4999. They then ask the city officials to disconnect service within the mandatory evacuation zones by de-energizing the electric service lines in the neighborhoods. This process is started after homeowners evacuate the area. They are advised to activate their local Incident Command System as soon as possible while waiting for other responders.
As an emergency may include interruption of power generation, communication with the general public and residential customers becomes critical, especially in the case of industrial customers since that can cause problems downstream the supply chain. Constant planned and accurate mainstream communication with customers and Emergency P&R units at all instance should be practiced in order to inform about emergency actions to be taken, if any scheduled power outage if necessary.
Getting Business Back in Place
Xcel Wisconsin understands that economic recovery is slow, energy sales are flat, operating costs are continuing to rise, environmental regulations are increasing, massive knowledge drain is possible due to retirement, and infrastructure needs more investment. Therefore, the company has prioritized commitment and strong foundation as being fundamental in taking over challenges. Constant assessment, appraisal, and implementation have been identified in four areas of focus: Operational excellence, value to the customer, employee safety and engagement, and environmental leadership.
During the next 4 years, Xcel plans to invest $13.4 billion in capital improvements. They have taken a strategic approach to water use in Minnesota and Wisconsin. They monitor weather patterns and meteorological forecasting models to predict and prepare for an adequate water supply during times when unusually dry conditions are likely to persist. Also, to maintain water quality, Xcel Wisconsin plans to use once-through cooling and to systematically treat, monitor, and analyze the discharged water.
After completion of Clean Air-Clean Jobs project in 2018, Xcel Energy plans to operate modern plants equipped to meet new environmental regulations. They plan to fuel switch 461 MW of coal-fired generation to natural gas with highly efficient emission controls installed on coal-fired facilities. Xcel Energy has invested $1 billion in a comprehensive program to modernize and reduce emissions from three coal-fired generating plants in Minnesota.
Xcel Wisconsin is focusing on Clean Energy and improvising coal-fired generating plants for reduced emissions. They are replacing old, base-load coal units with natural gas combined-cycle plant to accommodate alternate renewable source of energy as from wind and solar powers.
Summary
The abovementioned scenario should be considered seriously for Xcel Wisconsin because severe damage done to resources, employees, turbines, and the ecosystem as a whole can be very expensive and difficult to resolve. Planning and implementing preventive actions beforehand can come in helpful to restore unexpected situations. It is important for the management to have backup plans, for example, with respect to turbines, like having some in stock for use in emergency, as they are expensive and difficult to replace in a short time. Such actions would need a significant amount of investment, but it is sure to give good returns in terms of saving expenditure on restoration. Xcel Wisconsin’s proactive emission reduction projects has improved plants and prepared them to comply with current and future environmental regulations to extraordinary costs and scheduling difficulties and to achieve proactive environmental leadership by reducing emissions and expanding renewable energy in a cost-effective manner.
