Utility regulators need to be a lot more proactive on climate resilience. Here’s how they can start.
As the country grapples with accelerating consequences from extreme weather events, new regulatory frameworks are needed to guide utility investments for added resilience. The chain of events during the first half of 2021 — from the Texas freeze to the most severe wildfire season on record in the U.S. — is catalyzing unprecedented federal investment that mirrors the popular and political demand for more resilient energy systems.
This is where states can follow suit.
Thus far, responses to regional climate catastrophes typically follow a pattern. An extreme weather event occurs, placing the affected state on edge to the point of investigation and political response, then action is taken to remedy a future similar incident.
In 2019, Florida passed a law allowing electric utilities to create new programs for undergrounding power lines after three years of millions of people and businesses losing power during hurricanes. Florida electric utilities are now planning hundreds of miles of undergrounding projects annually.
Off the Eastern coast of Canada, following two successive, severe storm years, Maritime Electric received approval from the Prince Edward Island Utility Commission for accelerated, AI-enhanced replacement of all Eastern cedar wood poles over the course of the next 20 years. And in Texas, the Public Utility Commission opened eight focus areas for investigation into energy system resilience after the February freeze that shook the nation.
While these measures often have desirable outcomes, they tend to be targeted and reactive, stopping short of understanding the true value of each mitigation for future events.
So what more can states do?
Among discussions with regulatory bodies, utilities, consumers and experts, certain common denominators have emerged that begin to outline a comprehensive climate resilience framework — much like RMI’s preliminary work has characterized — that transitions a largely reactive utility industry with limited decision-making insight to one that is anticipatory, dynamic, and equitable. As state commissions explore their own proceedings on resilience to extreme weather, the following five concepts can serve as a basis for framework considerations.
Modeling risk associated with extreme weather events
Understanding the risk of a low-frequency event is complicated, involving thousands of compounding variables such as geography, topology, weather, and characteristics of the delivery system itself. While we have typically relied on institutional knowledge and surface-level risk matrices to inform utility investment decisions, unpredictable and increasing threats require more sophisticated modeling, such as the Department of Energy’s North America Energy Resiliency Model, to precisely unlock the maximum resilience benefits for every dollar invested by operators.
