The Outdated Loop
Frequently replacing towers is not a sustainable process, nor
is it financially efficient. Induron aims to break the cycle of
corroding towers and costly replacements.
The Never-Ending Cycle
Induron is breaking the never-ending cycle
of tower replacement.
The Tower Is BuiltThe need for a new power transmission line is assessed, followed by meticulous planning, procurement of materials, and installation. The newly constructed tower is fortified with a protective layer of zinc, commonly referred to as galvanizing, which can have a lifespan of 20 to 50 years, contingent upon its quality, quantity, and service environment. This is financed through Capital Expenditure (Capex) funding, thereby distributing the financial responsibility to ratepayers through their imposed rates.
The Tower Needs MaintenanceOver the tower's lifespan, regular maintenance tasks are performed. Bolts are periodically replaced, foundations undergo repairs, and in some instances, structural elements are swapped out. However, it's important to note that these routine maintenance activities do not mitigate the gradual degradation of the galvanizing layer, which ultimately leads to corrosion and, ultimately, the failure of the entire structure over time.
Tower Is Now A
The Replacement Tower Is Now A Capital ExpenseOnce the existing tower has reached the end of its serviceable lifespan, the cycle starts over — thorough planning, procurement efforts, and assessment for a rate case to install a new replacement tower that is incredibly expensive and potentially disruptive to critical power transmission. This will be classified as a Capital Expense, thereby falling within the responsibility of the ratepayers again.
classified as an
Maintenance is classified as an O&M expenseMaintenance activities for the tower are categorized under Operations & Maintenance expenditures. Given that the asset was acquired using CapEx funds from ratepayers, the mentality of operation-to-failure takes hold. The objective then shifts to maximizing the asset's operational lifespan before allocating further CapEx funds for its replacement.
The Tower Corrodes And Needs ReplacementAs the galvanizing layer diminishes, corrosion sets in, initiating the deterioration of the asset itself. This progression leads to visible corrosion and a reduction in structural integrity, ultimately necessitating the replacement of the entire structure.
The New Process
The new tower revitalization process saves money and
extends the service life indefinitely.
The Tower Is
The Tower Is RevitalizedOnce the integrity of the galvanizing is compromised, the tower's initial environmental protection is ineffective. However, the structural integrity remains intact. Implementing a new protective measure will ensure its preservation.
The application of Induraguard 9200 involves installing it on energized towers, typically at a rate of 1-2 towers per day for standard sizes.
Is Now A
Revitalization Is Now A Capital ExpenseThe utilization of Induron's Induraguard 9200 as a protective coating has gained recognition as a Capital Expense by both FERC and Public Utilities Commissions across the United States. This acknowledgment enables the potential cost of installing a replacement tower to come off of ratepayers while permitting the utilization of CapEx funds for this undertaking.
Results In Monetary and Environmental Savings Using Induraguard 9200 to restore a tower costs much less than replacing the whole tower – less than a tenth of the cost. It achieves the same goal while significantly reducing the need for procurement, engineering, and other human resources. The environmental impact of mining, fabricating, shipping, and installing a new tower is drastically more detrimental compared to the environmental impact of prolonging the use of existing infrastructure.
Achieves An Indefinite Service LifeThese structures, composed of steel and reinforced concrete, possess an indefinite design life if we manage environmental deterioration. This means there is no predetermined limit on the amount of value and serviceability after the initial installation at the ratepayer's expense.
By implementing future applications of Induraguard 9200, the potential utilization timeframe for the structure becomes limitless. This becomes especially significant due to the existing strain on constructing new power infrastructure. It underscores the fact that we cannot simultaneously construct all the required new facilities and overhaul the current grid.
The recent FERC ruling outlined
the specific requirements for
obtaining CapEx treatment
when revitalizing towers.
Formerly, utility companies could include replacement costs for transmission towers and poles in their capitalization, but corrosion control for these assets was excluded. A groundbreaking shift introduced by the Federal Energy Regulatory Commission now allows utility providers to categorize corrosion control programs (coating programs) for transmission structures as a "significant addition," thereby enabling them to capitalize these expenses for accounting purposes. This alteration is poised to significantly impact the condition of the nation's aging electric utility infrastructure.
On February 22, 2022, the Federal Energy Regulatory Commission (FERC) approved a utility company's proposal to classify their tower coating programs as "substantial additions." The order (1) clarifies, "The Commission has previously permitted utilities to consider the addition of minor property items that were previously absent as substantial additions and to capitalize the related costs when such costs extend the useful life, operational capacity, or efficiency of the associated retirement units." Utility companies are now authorized to capitalize on the costs linked with corrosion control. This change aligns with generally accepted accounting principles (GAAP) and offers various financial advantages, including a more balanced assets-to-liabilities ratio and reduced income fluctuations.
In numerous instances, corrosion control solutions such as coatings have been repeatedly applied to structures, demonstrating anticipated performance and proven outcomes. Corrosion control coating programs, such as Induraguard 9200, possess the capacity to effectively prolong the service life of structures indefinitely.
HOW is this
A rate case proposal was successfully
submitted, citing examples from utilities
employing similar CapEx treatment. The PUC
specified requirements and granted the CapEx
treatment as long as those requirements are met.
“Why should the ratepayer or the environment be asked to bear the cost of a new tower when coatings can be used to keep the one we already have operating indefinitely at a much lower cost?”
In PG&E’s success rate case proposal, FERC highlighted that comparable accommodations have been extended to prominent utilities such as Georgia Power and Southern California Edison. This ruling established a much-needed precedent and framework for other utilities to make the case that they have a responsible coatings program. Such programs can significantly enhance existing structures and potentially extend their operational lifespan by two decades or beyond.
was the PUC provided to
result in this approval?
This is a NEW ADDITION providing SIGNIFICANT
IMPACT on the tower to ENHANCE SERVICE LIFE.
While fixing foundations maintains what's already there, applying Induraguard 9200 is like adding a fresh layer. It's a new addition. The process needs to be done on a larger scale, so it's important enough to be closely looked at by the Public Utilities Commission (PUC). With the huge U.S. electrical grid that can rust over time, the importance is clear. When this helps a structure stay useful for much longer and costs much less than getting a new one, it's a real benefit for ratepayers.