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Weather Threatens Oroville Dam Emergency Efforts

As measures are taken to repair a damaged spillway at the Oroville Dam in Northern California, weather forecasters are calling for rain later this week. Almost 200,000 people were evacuated from their homes below the dam, the largest in the country, on Feb. 12 as erosion of the dam’s emergency spillway threatened to flood the towns below.

While the situation was said to have stabilized on Sunday morning, conditions worsened and evacuation orders were issued. Roads in the area quickly backed up as a result, according to reports.

The dam’s main spillway was damaged after a winter season of record rains and snows following years of drought in the state.

Photo: California Department of Water Resources

California Representative John Garamendi told MSNBC that the evacuation was essential. “Fortunately when they were able to open the main spillway gates. That began to lower the reservoir level, because the water coming into the reservoir was about half of what they were able to expel down the main spillway, so it’s stabilized.”

The next issue, he said, is whether the spillway can be patched up “sufficiently to weather the storms that are clearly ahead of us.” Garamendi added that the months of March and April are the heavy storm season in the state.

Sheriff Kory Honea of Butte County said at a press conference that the Department of Water Resources (DWR) reported that the dam’s erosion is not advancing as rapidly as they thought. He said a plan is in place to plug the hole in the spillway by dropping large bags of rocks by helicopter. The DWR said that another measure being taken to relieve pressure on the spillway has been to raise the rate of discharge water from 55,000 cubic feet per second to 100,000 cfs, which it said has been working.

Helicopters transport large bags of rocks from the Oroville Dam parking lot, to the erosion site at the Oroville Dam auxiliary spillway in California, to help fight further erosion, February 13, 2017. Oroville is in Butte County. Florence Low / California Department of Water Resources

The New York Times reported that Northern California is close to 225% above normal rainfall levels since Oct. 1. According to the Times:

Repeated rounds of rain have pounded the area in recent weeks, rapidly raising the water level at Lake Oroville, the second-largest reservoir in California and a linchpin of the state’s water system. On Tuesday, a gaping hole opened in the main spillway that is used to release extra water. Early Saturday, an adjacent emergency spillway was also put into use, the first time water flowed over it since the dam was finished in 1968, department officials said.

State officials have said the 770-foot Oroville Dam itself, the nation’s tallest, is sound.

The problems with Oroville Dam are not a surprise to some. In 2005, during a relicensing process for the dam, three environmental groups warned the DWR of potential dangers with the emergency spillway, which is not a concrete spillway, but a concrete lip with a dirt hillside below. The concern was that the hillside could be easily eroded in the case of an emergency.

The Washington Post reported:

The upgrade would have cost millions of dollars and no one wanted to foot the bill, said Ronald Stork, senior policy advocate for Friends of the River, one of the groups that filed the motion.

“When the dam is overfull, water goes over that weir and down the hillside, taking much of the hillside with it,” Stork told The Washington Post. “That causes huge amounts of havoc. There’s roads, there’s transmission lines, power lines that are potentially in the way of that water going down that auxiliary spillway.”

Federal officials, however, determined that nothing was wrong and the emergency spillway, which can handle 350,000 cubic feet of water per second, “would perform as designed” and sediment resulting from erosion would be insignificant, according to a July 2006 memo from John Onderdonk, then a senior civil engineer for the Federal Energy Regulatory Commission.

Garamendi said that “What happened with the widening of the sinkhole was the result of someone overlooking the problems, including the fact that there was no concrete apron on the spillway.”

He also noted that while there will most likely be federal dollars to help rebuild the dam, “This is just one really startling, quite tragic and potentially catastrophic example of what’s happened to the infrastructure across America. We’ve seen bridges collapse in Minnesota, we’ve seen them on I-5 in Washington State and now this reservoir, which is the linchpin of California’s water system.”

ILS Roars into 2017 as Maturities Loom

Alternative capital markets continue to see robust activity and at least one major carrier is bullish for the future of insurance-linked securities (ILS), even as the added capacity continues to pressure rates overall.

The insurance-linked securities market saw $5.9 billion of issuance in 2016 and is off to a strong start in the first quarter of 2017 with more than $500 million of new issues already on the books for January, according to a new report from Swiss Re, which sees continued potential upside.

“Market conditions are extremely favorable at the moment and pipelines appear to be swelling, therefore it would not be entirely surprising to see the market challenge record issuance,” the company said in its new report, Insurance Linked Securities Market Update, Volume XXVI, February 2017.

The report also notes that the first half of 2017 will see the largest-ever amount of maturities for a half-year as some $6.4 billion in bonds mature, which could have the effect  of reducing the overall total market outstanding depending on how robust issuance continues to be during the first half of 2017.

“To put it in perspective, the approximately $6.4 billion of bonds set to mature in first half 2017 is larger than all but the four largest historical full-year issuances,” Swiss Re said in its report.

2016 was an unusual year for the ILS market in that the patterns of issuance by quarter differed from most years, according to the report.

“New issuance volumes were atypical,” said the report, with third quarter issuance larger for the first time than that of the second quarter, usually the busiest quarter for new issuance due to the U.S. wind season.

Further, fourth quarter issuance was the largest of the four quarterly totals. Total bonds outstanding remained at just around the record level of   billion, due largely to the outsized fourth-quarter levels of new issues.

In yet another market anomaly, the 20 new transactions in 2016 was the lowest number of new deals brought to market since 2009.

The average size of those deals, however, at approximately $300 million, was second only to 2014, which included the largest-ever catastrophe bond, the mammoth $1.5 billion Everglades Re from Citizens Property Insurance Corporation (Florida Citizens). The 2016 average deal size of $300 million was also 20% larger than that in 2015, according to Swiss Re.

U.S. wind and earthquake were as usual the most frequently secured perils, but they were joined by a slate of newer and diversifying perils including Canada earthquake, Europe windstorm, Japan typhoon and earthquake, Australia cyclone and earthquake, extreme morbidity, and for the first time since 2005, motor third party liability, according to the report.

The 2016 insurance-linked securities market also differed from other recent examples as it was momentarily roiled by the first Category 5 hurricane since Dean and Felix in 2007.

As Hurricane Matthew roared towards the Florida coast during the first days of October, it touched secondary trading, particularly among those bonds “focused in the state of Florida, especially Blue Halo, Laetere, First Coast and Everglades,” said the Swiss Re report.

“As we have observed in the past during hurricane events, notably during Hurricane Odile and Hurricane Patricia in 2014 and 2015 respectively, the ILS secondary market quickly responded to the threat of Hurricane Matthew in October,” according to the report. “Following the formation of the hurricane, bonds with large wind exposure in Florida and the Gulf traded at a significant discount as the hurricane approached the Florida coast.”

Trading quickly returned to normal, however, as Matthew eventually made landfall on Oct. 8 southeast of McClellanville, South Carolina, as a Category 1 hurricane with 75 mph winds.

Total alternative capital levels in the sector are now pegged at some $78 billion.

Weighing In on Stand-Up Workstations and Exercise Balls

Stand-up workstations and exercise balls used for sitting in place of an office chair are gaining popularity.

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This has been fueled by reports of workers at Google, Facebook and other companies trading in their chairs to stand, or bounce, while working. They cite studies of the harm that hours of sitting can do.

Even here at the RIMS office several employees prefer sitting (or bouncing) on exercise balls to the familiar rolling desk chair, or working at a stand-up desk. Risk professionals have long been discussing the merits and downsides of these two popular choices.

But are these alternative ergonomic preferences really that beneficial?

Recently in an online discussion, some members of the RIMS Opis community said they were not in favor of exercise balls as ergonomic solutions. A risk manager in Oregon stated it bluntly: “Exercise balls should be limited to fitness programs.

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Your [workers comp] will own the injury if an employee slips off the ball and hits [his or her] head or has a soft tissue injury from the fall.” Several other commenters agreed that the balls are unstable and their use is discouraged or officially prohibited.

A CEO said: “While great for encouraging engagement of your core muscles during exercise, [balls] are not good for sitting at a workstation and in fact, research shows, increase your risk of ergonomic injury.”

In fact, some research has found their benefits negligible. A study of 28 subjects found that exercise or chair balls offer no advantages over a traditional workplace chair. According to a study by BioMed Central:

Results:

The results showed no significant difference with regard to spinal curvature between seating types. Initial sitting curvature was found to increase significantly over 30 minutes in both the desk chair and stability ball. In addition the results of the usability questionnaire showed a significant difference in three of the eight questions, in favor of the desk chair.

Conclusion:

No benefits were found through sitting on a stability ball over that of a desk chair in prolonged sitting as both seating types were found to replicate a poor sitting position through a kyphosed [outwardly curved spine] and slumped posture. The clinical implications of this study serve to benefit any healthcare professional considering use of the stability ball as a replacement desk chair.

In another online comment, a Missouri risk manager suggested a compromise, elaborating that while his organization allows their use, “They cannot be free-standing balls… they must be part of a chair ball with wheels and a seat backing.”

Stand-up desks received more positive feedback. Several risk professionals cited research equating excessive sitting and sedentary lifestyles with serious chronic health problems. A number of commenters shared anecdotes about how stand-up workstations have helped employee health issues. Several users noted that in their newly renovated, or soon-to-be-renovated, offices, stand-up workstations are de rigueur.

Who pays for these workstations? Most who commented said, or implied, that their companies foot the bill for stand-up desks if an employee requests them. Most seem willing to make the investment based on reports that providing ergonomic options can reduce workers comp claims.

Not all are sold on the benefits, however. A commenter from Chicago said, “As odd as it sounds, stand-up desks may not be wholly safe…. People get tired and fall down using them. And there is no confirmation standing is less stressful than sitting. Folks very quickly started to complain of sore hips, knees, feet and spines.”

A Virginia risk manager shared the wisdom of moderation and the middle ground, saying, “While sitting is bad—and the motive for getting a standing desk—standing all day can cause myriad lower back, leg and feet issues. It would be similar to what risk managers at grocery stores have to deal with their cashiers on their feet all day. Interspersing standing with sitting is key.”

Some researchers agree with this conclusion. A New York Times article reported that 15 minutes per hour at a standing workstation is recommended over standing all day.

Delta Outage Spotlights Technology Risks


Delta’s computer outage on Jan. 29 was over by midnight, but its effects have extended into the week, not only resulting in 170 cancelations on Sunday, but grounding more than 100 flights on Monday and causing many delays. Adding to the frustration was the fact that the company’s mobile apps were also not working.

This latest incident follows another computer outage for Delta in mid-August, when flights were canceled for two days, leaving thousands of passengers stranded.

Such outages can be costly. A Southwest Airlines outage in July caused more than 2,000 flights to be canceled and cost about $54 million. The August Delta outage, which involved a fire, resulted in cancellation of 2,300 flights over three days and cost the airline $150 million in lost revenue, according to USA Today.

Jim Corridore, an analyst at CFRA Research, told USA Today on Monday that Delta’s computer outage puts a “spotlight on risks of airline technology infrastructure, much of which is old and patched with differing systems.” He said that airlines build new programming over old software, especially after a merger, when computer languages may differ. Programmers’ assumptions about how software will work are sometimes wrong.

While large companies such as Delta would have fewer outages with more testing of their systems, this is an expensive proposition.

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According to USA Today:

Gil Hecht, CEO of Continuity Software, which tests computer systems for large banks and insurers, compared the construction of complex computer systems to a layer cake, with web servers, database software, storage and possibly interaction with other systems such as government computers that check whether passengers are allowed to fly.

“Testing should be done by every single layer and every single business service that participates in the critical infrastructure, and some of them are simply not under the airline’s control,” Hecht said.
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He compared one way of testing to running a car into a tree to see whether the airbags work, which isn’t possible while keeping a computer system working. Instead, testing for a large financial institution or airline must confirm that each layer is configured to work well with all the others, he said.

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“In order to do that, critical infrastructure operators must do much more testing, whether it’s manual by humans or by technology or by any means possible,” Hecht said. “Yes, it costs money. Quite a lot. But if more money and more effort will be driven into testing, we will have far less down time and data-loss events.”