In June of 2022, Columbia Law School’s Sabin Center for Climate Change Law, Environmental Defense Fund, and the Initiative on Climate Risk and Resilience Law released an Electric Resilience Toolkit to support policymakers and stakeholders working on issues around electric utility regulation and climate resilience planning. One big takeaway: Climate resilience planning is not only good practice for electric utilities, but there is a legal basis for requiring it.
Public utility law mandates utilities provide their customers reliable service at a fair rate, meaning utilities are required to plan for our changing climate to meet this standard of service. When resilience planning, utilities use modeling information about future weather conditions in the areas they serve, looking at a range of different possibilities, including worst-case scenarios. Climate change is already increasing costs for electric customers significantly, a reality we’re facing in Louisiana.
Storms, hurricanes, and floods keep increasing in frequency and intensity, making it more essential than ever to plan for resilience right from the beginning. By integrating resilience planning into utilities’ business operations, utilities and subsequently customers can decrease costs associated with extreme weather events and avoid expensive repairs later on. If a utility doesn’t plan well for climate change and it affects their operations and expenses, there is a legal basis on which the state utility regulatory commission could prohibit them from passing those charges onto customers.
For instance, in Boston the Conservation Law Foundation and some National Grid customers are petitioning the Utility Commission in Massachusetts to deny a potential rate increase based on this legal foundation. The local utility National Grid is attempting to raise rates to cover $52 million in storm damages, but customers along with the Conservation Law Foundation are fighting this rate increase, citing National Grid’s failure to create more resilient electric infrastructure given the impacts of climate change, making storms more intense and frequent. Utilities must be able to prove to their state regulatory commission in applications for cost recovery that they made smart decisions based on what they knew at the time. In other words, climate resilience planning is directly linked to oversight of utility rates and utilities’ duty to serve their customers.
Another takeaway from the Electric Resilience Toolkit, when it comes to resilience planning, taking into account regional and local risks is crucial for cost-saving. The unpredictability of our climate means that past weather patterns cannot accurately predict future conditions anymore. So how do we plan for the future? Scientists can now use hyper-localized methods of modeling to make climate projections more detailed and specific to the local areas where electric utilities operate, like downscaling. This way, the utility can ensure that the lights stay on even in more severe weather conditions. For example, smart resilience planning takes flood risk into account by mapping out locally which areas are at greatest risk, and implementing solutions, like raising substations, to minimize that risk. Another big concern in Louisiana is that as temperatures rise, the risk of outages increases, since the extreme heat has a compounding effect on electric efficiency. Extreme heat puts strain on our power plants and transmission/distribution lines, while on top of that, increasing demand for electricity as people try to cool down. The same is true in the winter, when extreme cold during a polar vortex overworks thermal power generation, transmission, and distribution, just as electricity to stay warm is most vital.
Today, our utilities have access to a wealth of data and tools to understand the risks climate change poses in their territories. So what does this mean for utilities and ratepayers? Well, let’s say that a utility builds a new generation plant in a flood prone area. That plant is vulnerable to flooding during a hurricane or extreme weather event, which are both occurring more frequently due to climate change. By placing that plant in a flood prone area, the utility failed to take into account the latest climate modeling information. This hypothetical happens frequently in the real world, as seen with the newly-built New Orleans Power Station (NOPS), created as backup generation for when the city is having distribution issues; however, NOPS failed to provide electricity generation during the Hurricane Ida outages. Now say that the plant floods during a storm and is unable to provide power to residents. Should that utility be able to charge customers to recover the cost of its poor business investment, and is it legal to do so?
In New York, after a big storm in 2013, Consolidated Edison Electric applied for a rate increase to make improvements to their transmission system. But some groups stepped in as intervenors and argued that the company’s proposal did not adequately plan for and should plan for the impacts of climate change, like more extreme heat and flooding, to prevent the need for additional costly repairs in the future. The NY State Commission agreed and asked all its jurisdictional utilities to consider climate change in their investments, and further ordered them to conduct a Climate Change Vulnerability Study. In this case, intervenors played a crucial role in holding electric companies accountable for their lack of climate preparation, which resulted in customers not having to pay that expense through increased rates on their monthly bills. Adapting to the impacts of climate change is essential to ensure a reliable and resilient electricity system, and this expectation is enforceable by regulation.
Resilience planning is a vital part of electric utility regulation that ensures fair, affordable rates for customers. The good news is anyone can get involved in the process by attending their state regulatory commission’s monthly meetings, where things like rate increases and resilience plans are voted on. Oftentimes, rate increases are approved without much opposition, as utilities are often the only or loudest voices in the room. There is a lack of public awareness about how to engage with your utility regulators, but you can help change that! Anyone who can show they will be impacted by a decision in a docket can intervene. Take an opportunity to intervene and provide your input on why customers shouldn’t be on the hook for poor utility decision-making.
In Louisiana, the Louisiana Public Service Commission, or the LPSC, regulates most utilities in our state. The LPSC holds a monthly meeting, its Business & Executive Session (B&E), during which they discuss and vote on utility matters. The LPSC posts the B&E agenda ahead of time so you can see if there are any issues you would like to comment on. While you must attend in person to submit public comment, that’s why The Alliance exists. We know most people don’t have the time to attend meetings like these. It is critical that residents’ voices are heard, so AAE will always be advocating on your behalf at LPSC meetings, and we’re also ready to help when you do want to attend and speak up. You don’t need to be an economist or engineer to give your testimony at a meeting, you are already an expert at being a utility customer.
Docket numbers starting with the letter ‘R’ are rulemaking dockets and are typically more collaborative in nature than other dockets. For example, LPSC dockets R-36226 and R-36227 have been opened to evaluate our electric grid and determine how we can harden our infrastructure to improve resilience. Additionally, U-36625, ELL’s “Future Ready Resilience Plan”, is a docket issue full of requests to recover money from customers because of poor investment choices. You can get involved in ‘R’ dockets by becoming an intervenor or interested party. Your voice is needed, if you see an upcoming docket that you have concerns, questions, or comments about, please participate! You can find more information about how to get involved on our website at www.all4energy.org/engagelpsc. It is up to all of us to make sure that the LPSC is doing an adequate job of overseeing our electric utilities and ensuring that customers are not burdened by unjust costs and rate increases.
One rulemaking docket that concerns every ratepayer in the state is the Consumer Bill of Rights docket (R-36630), which would establish rules on what utilities are allowed to spend our money on. We deserve the right to know that the money we pay for monthly energy bills is being spent in efficient and productive ways. Are our utilities investing in resilience or are they spending our money lobbying regulators? Your voice matters.
Check out the Electric Resilience Toolkit to learn more about how electric utilities can enhance climate resilience planning. The Electric Resilience Toolkit is a joint project of the Sabin Center for Climate Change Law, the Environmental Defense Fund, and the Initiative on Climate Risk and Resilience Law. The toolkit provides information on ways to enhance climate resilience planning by electric utilities. It is designed to provide engagement-focused information, for use directly in regulatory proceedings to support well-designed climate resilience planning by electric utilities.
The toolkit complements sections one through three of the report, Climate Risk in the Electricity Sector: Legal Obligations to Advance Climate Resilience Planning by Electric Utilities, jointly issued by Environmental Defense Fund and the Sabin Center for Climate Change Law in December 2020 and published by the Environmental Law Review in 2021.
Lauren Kalinosky is a Karen Wimpelberg fellow at the Alliance for Affordable Energy. Lauren is a senior at Tulane studying International Development, Environmental Studies, and Spanish. She is passionate about a range of environmental justice issues, including looking at how energy efficiency and grid resilience can save consumers money and energy. Originally from Ohio, she has loved having the opportunity to explore New Orleans and learn about the various energy issues that Louisiana consumers are faced with.
