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Second Appeal Letter
PA ID# 000-UMHKB-00; Lake Region Electric Cooperative
PW ID# 1206; Eligible Work
March 5, 2010
Oklahoma Department of Emergency Management
P.O. Box 53365
Oklahoma City, OK 73152-3365
Re: Second Appeal–Lake Region Electric Cooperative, PA ID 000-UMHKB-00,
Eligible Work, FEMA-1678-DR-OK, Project Worksheet 1206
Dear Mr. Ashwood:
This letter is in response to your letter dated June 26, 2009, which transmitted the referenced second appeal on behalf of the Lake Region Electric Cooperative (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $9,258,343 in funding on Project Worksheet (PW) 1206 to replace rather than re-sag 206 miles of conductor that it believes has lost significant tensile strength as a result of the ice storm.
In January 2007, a severe winter storm with freezing rain caused severe ice buildup and wind-load on power lines and other facilities causing extensive damage. The Applicant sustained significant damage to its power distribution system with a radial ice accumulation of up to 3.5 inches. The Applicant identified 324 miles of damaged conductor that it considered damaged beyond repair and required replacement. It estimated the cost to replace the “damaged” conductor to be approximately $16 million. FEMA inspected approximately 22 percent of the damaged conductor and prepared PW 1206 for $7,221,539 to replace 118 miles of damaged conductor, re-sag 206 miles of conductor and make miscellaneous repairs to other system components. The PW also included a hazard mitigation proposal.
The Applicant submitted its first appeal on June 20, 2007. The Applicant argued that a large portion of the conductor wire that FEMA determined could be re-sagged could not because the re-sagged conductor wire would not restore the pre-disaster tensile strength in many lines and would lead to a violation of the National Electric Safety Code (NESC). The Regional Administrator denied the cost to replace certain spans of conductor because replacing the conductor would improve its tensile strength, which constituted an upgrade. The Regional Administrator concluded that there was no specific code for tensile strength. In addition, the Regional Administrator determined that some of the Applicant’s inspection records documented that numerous sections of the distribution system had excessive spans and insufficient ground clearance prior to the disaster.
The Applicant submitted its second appeal dated June 23, 2009, requesting reimbursement for $9,258,343 disallowed on PW 1206. The Applicant argued that the NESC Rule 261H1.a is the prevailing code and tensile strength is not the controlling factor in replacing conductor. Additionally, the Applicant stated that it regularly maintained or replaced conductor that did not meet current standards. The Applicant submitted reports that Mr. Gerald E. Hager, its electrical engineer consultant, prepared to show that the ice buildup damaged the conductor beyond repair.
The Applicant and State discussed this appeal with the Public Assistance Division Director on a telephone conference call on January 13, 2010. The issue in this appeal is whether conductor that experienced excessive sag due to ice buildup is damaged beyond repair and thus eligible for replacement under the Public Assistance Program. The Applicant’s test of 29 sections of conductor indicated that 25 sections broke at between 50 percent and 100 percent of the conductor rated breaking strength. The Applicant concluded that the conductor lost up to 35 percent of its tensile strength, on average, because the ice buildup permanently stretched the conductor. The NESC code states that conductor should not stretched beyond 60 percent of its ultimate breaking strength. The Applicant stated that stretching the conductor to meet minimum height requirements would stress the damaged conductor to more than 60 percent of its ultimate breaking strength, which would violate NESC. Public Assistance Program regulations allow the repair of disaster damage in accordance with eligible codes. FEMA recognizes the NESC as an eligible code. The replacement of disaster-damaged conductor necessary to meet NESC requirements is an eligible expense. Furthermore, the Applicant submitted documentation to support its claim that its electrical distribution system was in compliance NESC prior to the disaster.
The Applicant submitted documentation to support its claim that the ice buildup damaged the conductor beyond repair. Therefore, the Applicant is eligible for replacement of an additional 206 miles of conductor. During the January 13, 2010 conference call, the Applicant stated that the actual cost to replace the previously approved conductor was approximately 45 percent less than the estimated cost in the PW. Therefore, the estimated cost to replace the additional conductor is $4,166,254 (.45 times $9,258,343). I approve the second appeal for $4,166,254. By copy of this letter, I request that the Regional Administrator take appropriate action to implement this determination.
Please inform the Applicant of my decision. This determination is the final decision on this matter pursuant to 44 CFR §206.206, Appeals.
Elizabeth A. Zimmerman
Disaster Assistance Directorate
cc: Tony Russell
FEMA Region VI