Dominion Energy D announced that its unit Dominion Energy Virginia has completed burying 2,000 miles of overhead power lines, which is part of the company’s Strategic Underground Program. The shifting of power lines underground will lower storm-related outages and reduce the time for restoration of power in outage-prone areas during the hurricane season.
The Atlantic hurricane season began on Jun 1 and will run through Nov 30. The hurricane season brings in severe storms, which impact the electric supply infrastructure of the utility companies. Strategic Underground Program of Dominion Energy was launched in 2014 and miles of outage prone tap lines have been successfully buried.
The distribution lines selected for burying are historically those that see the highest frequency of damages after major storms. Dominion Energy has plans to make many more miles of distribution lines underground.
Benefits of Underground Power Lines
Nature’s fury is unpredictable and to reduce the impact of severe weather conditions, the utilities invest millions of dollars to fortify their infrastructure. Making distribution lines underground is one major step to strengthen the electricity distribution infrastructure.
Underground power lines will lead to fewer outages during the hurricane season, which means lesser repair and maintenance expenses for D. The possibility of providing uninterrupted electricity to customers even during the hurricane season will generate more earnings for the company.
Such power lines will also result in faster power restoration, as a consequence of which everyday life will return to normalcy more quickly. It will also decrease the economic impact on homes and businesses across the area. Due to the severity of storms, outages may still occur. Burying the most frequently damaged power lines will increase the overall reliability of its distribution system, providing relief to customers.
Utilities Strengthening Infrastructure
According to US National Oceanic and Atmosphere Administration, this year’s Atlantic hurricane season will be above average.
The above-average hurricane seasons means that the utilities will have to be more vigilant and take prompt action to counter the impact of storms. Apart from Dominion Energy, other utilities like NextEra Energy NEE, Duke Energy DUK and Entergy Corporation ETR among others have been investing billions of dollars to strengthen their systems as well as provide stable services to millions of customers amid extreme weather conditions.
The utilities have been focused on grid modernization, infrastructure hardening and vegetation management to reduce the impact of storms on distribution networks.
Price Performance
Dominion Energy’s shares have returned 16.2% compared with the industry’s growth of 7.2%.
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Zacks Rank
Dominion Energy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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