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interviews

What State Takeover Looks Like

by Senator Scott Wiener
© Frank

interviews

Planning, Planning, Planning

by Romany Webb
September 1, 2021

aThis interview with Romany Webb, a research scholar at Columbia Law school and a senior fellow at the Sabin Center for Climate Change Law, was conducted and condensed by franknews.

Romany | The Sabin Center for Climate Change Law is an academic think tank that conducts research and hosts educational programs on various aspects of climate change law. The Center's work spans all aspects of climate change, both mitigation and adaptation, across a range of economic sectors and industries. 

My work for the Center focuses primarily on two areas: one is energy and the second is negative emissions, or carbon dioxide removal. So a lot of my work looks at how we can reduce the amount of carbon dioxide and other greenhouse gases going into the atmosphere and how we can remove some of the greenhouse gases that are already there. 

frank | I think most people have a hard time understanding the grid. To begin – what issues are utilities facing specifically from climate change? 

Yeah, you're absolutely right that most people don't think much about the grid.

You know, we just flip a switch and expect our lights to come on.

But making sure that happens is a real challenge in the age of climate change. I think that there are two ways in which climate change has implications for utility operations. 

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One tends to get more attention — the need to clean up electricity generation to replace polluting generators that burn fossil fuels with cleaner systems, for example, renewable generating systems. The question is, how do utilities do that in an organized way that doesn't affect the reliability of the system?

The second issue, which gets a lot less attention, is around how the impacts of climate change will affect electricity generation and other parts of the grid. We know that the impacts of climate change will make it much more difficult for utilities to reliably supply electricity to consumers. For example, higher temperatures reduce the operating efficiency of generating plants, so they produce less output. Higher temperatures also reduce the carrying capacity of transmission and distribution lines. So it's harder to deliver the electricity that gets produced. And, at the same time, demand for electricity is going to increase — since the increasing temperatures mean that people are going to run their AC more. It is a very big issue that is under-recognized. 

When you think about modernizing the grid, what do you prioritize? 

It's such a good question because there are so many different things that will need to happen. Even just responding to one climate impact could be done in a number of different ways. And so we're going to have to choose which of them is most appropriate, which is most cost-effective, which delivers the greatest benefits relative to costs, etc. 

Before we can do any of that though, we really need to have a thorough understanding of how different climate impacts will affect different parts of the system. Some generating facilities will be more at risk from climate change because of where they're located or the type of fuel they use or the way in which they operate. So we really need to have this sort of in-depth study of how each part of the system will be impacted. That needs to be a localized assessment that takes into account differences in the climate impacts that are going to occur in different places and differences in the electricity system. 

That is often referred to, within energy climate circles, as a climate vulnerability assessment. We've seen a few utilities start to do that, but really not a lot. And quite a few utilities who say they are doing it, are actually doing it really poorly when you dig into the details. For example, they're trying to predict future climate impacts on their system, but they're looking at historic weather data that doesn't take into account climate change. That's a real problem and a real gap that prevents us from even getting to that next step of determining what sort of investments we should be making. 

It's interesting too, depending on what utilities you're looking at, who becomes responsible for the cost of adaptation, which must not be cheap. 

Many utilities are investor-owned entities that have shareholders, but, because they supply this essential service, they historically existed as a heavily regulated monopoly. There are entities called state public utility commissions that determine things like how much the investor-owned utilities can charge for the services they provide. Now, as part of setting those prices, those rates as they're called, the regulator is meant to do an in-depth analysis of whether the investments that the utility is making are appropriate, justified, and will ensure the least cost delivery of reliable service. If the utility can meet those standards, then it can pass the costs of its investment onto its ratepayers — the customers.

Ultimately it is all of us that end up paying for these investments. 

One of the issues that we see now is that utilities are investing huge amounts of money in new infrastructure. But, because they're not doing these climate vulnerability assessments that I talked about, they're often not considering whether that infrastructure will actually withstand future climate impacts. They're making these investments that regulators are deeming prudent and allowing the costs to be passed on to ratepayers without considering climate issues. This is a real problem because it means that we all potentially end up paying for infrastructure that won't be able to be used for its full, useful life, and might not deliver services when we need them. 

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So is the advice that they work with either academic institutions or private institutions that specialize in this? 

Yes, I mean, all utilities need to engage in a new sort of planning for climate change. That includes doing a climate vulnerability assessment that looks at the risks from climate change within their specific service territory. And, once the utilities understand those risks, they then need to look at options for enhancing the climate resilience of their system. That type of planning is quite different from what utilities do now and requires different sorts of data and tools that utilities don't necessarily have access to. Most obviously it requires climate projections so that you make sure that you're looking at anticipated future conditions. So partnering with a university that has a climate science program, or partnering with a consultant that can help you produce that sort of data is really important. 

It's definitely not something that utilities can do alone. It's also not something that can be done without utilities. You need the knowledge of their systems -- where they're located, how they operate,  all that sort of stuff. 

The Department of Energy has published guides for utility companies and grid operators on how to plan effectively. Is there any component of enforcement?

Not a lot at the moment. Those state public utility commissions that I mentioned before could do that. In work that we've done at the Sabin Center, we argue that they have a legal obligation to do that when they're scrutinizing the investments that these utilities are making. They should be checking that the utilities are appropriately planning for climate change. Similarly, at the federal level, the Federal Energy Regulatory Commission could play a similar role, around the bulk power system. But,  that's not really happening yet. There have been some moves by some state public utility commissions to require this sort of planning for climate change. Following Superstorm Sandy here in New York, a settlement was reached between ConEd and outsider stakeholder groups, under which ConEd agreed to do a  climate vulnerability assessment and develop a resilience plan. 

At the time that the New York Public Service Commission approved that settlement. It said we think all utilities should be doing this. Since then, the other utilities have not done it, and the commission has not enforced it. There is a petition that's been filed with the commission that requests that they start requiring utilities to plan for climate change. In California, just last year, the California Public Utility Commission, ordered electric and gas utilities in the state to start doing that sort of planning and set timeframes for the utilities to file their climate vulnerability assessments and resilience plans. Hopefully, there'll be some enforcement of that in that case. Ideally, we'd like to see other state commissions and agencies at the federal level, taking action in this area as well. 

It doesn't seem like there's much incentive for accountability. I mean, I grew up in Northern California, PG&E is notorious for lawsuits. But they keep going. Other than paying out, is there any sort of real action that scares them into acting differently?

So one of the things that we've been looking at in our research is the potential for private parties, and potentially the customers, of these utilities, to sue them under tort law, for things like negligence, if they fail to appropriately plan for climate change. It's what we term a “climate resilience suit.” The idea is that the utilities knew that climate change was happening, knew that climate impacts would continue to worsen, and would have impacts on their system. 

To the extent that their failure to plan for that causes me some harm or some loss or some damage, I should be able to sue for that. There haven't been any cases brought exactly like that. There have been some cases brought after extreme weather events around utilities’ failure to plan for those events, which has yielded mixed results.  I think having the ability for private individuals to bring a sort of suit against utilities would be at least somewhat of an incentive for the utilities to pay more attention to this. Otherwise, they're potentially going to get sued by a lot of people and have to pay out a lot of money. 

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Is there a case to be made that utilities should be state-run? Is that even a possibility? Is that silly to think we could even do that in the future?

No, it's absolutely not silly. There are lots of people who talk about shifting to a more public model of electricity supply. I mean, electricity is an essential service. Many other essential services are provided by the government or government entities. Intuitively it makes sense to think about electricity in the same way. Having said that though, we do have a long history of private entities, investor-owned, shareholder-owned entities, providing electricity in this country and a wholesale shift to a government-run system would be quite a challenge, I think. 

For emerging technologies — solar, wind, etc —is it right to assume they will be private as well? 

One part of the challenge in planning for the impacts of climate change is the fact that we do have so many different private players operating different parts of the grid. That creates an opportunity for each one of those players to say, well, the problem occurred upstream of me. I couldn't do anything about that. Or,  a problem occurred downstream of me, I couldn't do anything about that.

Particularly the utilities that are no longer vertically integrated, tend only to look at their own assets and operations. They don't look at the other parts of the system on which they depend. 

That creates a real challenge for planning and does, I think, signal the need for more government intervention to promote the sort of intercompany planning that's needed so that we end up with a holistic plan for the whole system. 

I think we saw the problems in Texas where the natural gas pipeline system went down, which caused some of the generating plants to go down, which meant electricity could not be delivered to consumers. We really need to be considering the energy system, broadly, as one whole thing that will be impacted. And we need to develop solutions that can address all of those impacts. 

As a layman, it was really hard to sort out what happened in Texas. Was it clear to you what happened and who’s fault it was – was it a confusing confluence of things?

Absolutely not.

This is not one of those situations where there is nothing to do.

All of these different climate impacts we can plan for. We cannot eliminate every outage on the system. We can't afford to gold plate the system so much that there are no risks to it, but we can certainly lessen those risks. 

There were clear failings in the Texas example. Generating plants had not been appropriately weatherized, even though previous experience with winter storms had demonstrated the need for that weatherization. And it’s not just on those generators. There was a broader failure of planning. Interestingly the Texas State Commission is looking at how to better facilitate planning at the moment.

It seems to be encountering a real challenge in thinking about planning for climate impacts specifically because, as I said before, it's so different from what utilities and energy system operators are used to doing. And it requires a different sort of data that they're just not used to using. But the data is out there. They just need help finding it and using it.

I sort of sound like a broken record that it's all about planning, planning, planning, planning.

Once we do that planning, we can significantly reduce those risks. Not eliminate them, but reduce them. 

Somebody said to me, if you plan appropriately, it'll look as if you're overreacting because nothing will happen. Whereas if you don't plan and disaster happens, it feels like catastrophe is inevitable. Do you feel optimistic that people are learning because these climate disasters are happening more frequently in the US?

I have mixed feelings. I think it's very disheartening that after some of these extreme weather events, politicians come out and blame it on renewable energy sources when we know that the failures were much more widespread and that there were bigger issues in the operation of the grid that led to those failures. That does not give me a lot of hope. 

Having said that, I do think the issue of climate change impacts and what it means for the grid is getting more attention, which is encouraging. I think that companies are increasingly recognizing the risks to their assets. Even if politicians and regulators don't necessarily want to act, companies will be forced to act. And, as you said, these impacts are becoming more obvious and, in many cases, could have really catastrophic effects. It's sort of impossible for people to ignore it, and it is impossible for companies to ignore it.

I am optimistic that change will happen. I'm not necessarily optimistic that it will happen on the timeline that we need.