The events in Texas are a tragedy that should not have happened.
Many Texans still face serious and potentially deadly conditions without power, heat or safe drinking water and they urgently need help to recover. State leaders are also demanding that it never happen again. To ensure that, they must require the electric industry to recognize the undeniable: climate change is here and it needs to be factored into their planning and decision making.
That should be a no brainer. The electricity industry relies on massive place-based infrastructure, like generating plants and transmission lines, to keep the lights on. All of that infrastructure is at risk from the impacts of climate change.
Studies show that the increases in average and extreme temperatures associated with climate change will impair the operation of many generating plants, particularly those reliant on natural gas and coal. As we saw in Texas, those same plants can also be crippled by cold snaps, which are expected to become more severe due to climate change. On top of that, climate change is also bringing more frequent and intense hurricanes, floods, droughts and other extreme weather that damage and destroy transmission and distribution infrastructure.
Despite this, the electricity industry has been slow to prepare for climate change. Our 2020 report — Climate Risk in the Electricity Sector —found that utilities too often base their climate resilience planning solely on historic weather data that does not account for the impacts of climate change. Even where that is not the case, utility plans are often limited, focusing on climate impacts on just one or a few types of equipment. Very few utilities have planned for disruptions to assets they do not own, but rely on, such as generating plants. It is those plants that have been a source of outages in Texas. Better planning is needed across the entire energy system.
There are immediately implementable solutions. The U.S. Department of Energy (DOE) and others have published guides telling electric utilities and grid operators how to plan effectively for the impacts of climate change. The tools and data needed for effective planning are widely available — in many cases free of charge. But, still, electric utilities and grid operators haven’t acted to sufficiently address the impacts of climate change. It’s time for lawmakers and regulators to step in. And if they don’t, the American public must hold them accountable.
State governments could pass legislation requiring climate resilience planning in the electricity sector. But even without new legislation, state utility commissions — the entities responsible for regulating electric utilities — can act to mandate such planning under existing law.
State commissions can also prevent utilities recovering investments made and the costs incurred without considering climate change. Commissions are required to ensure utility rates are “just and reasonable” and, in most cases, do that by subjecting utility investments to a “prudence test.” That test asks whether, in making the investment, the utility acted reasonably given what it knew or should have known. Investing in coastal equipment without considering available information about expected sea level rise is not reasonable. Nor is investing in a generating plant without considering whether it can operate under foreseeable climate change-affected extreme heat and cold conditions.
Currently, electric utility investments are often not scrutinized with climate change in mind, but they should be. Customers and other stakeholders should demand it. Some have already had success in places like New York and North Carolina. But action is needed in other states, too, before the next crisis hits. Climate change and the extreme weather it brings are upon us. It’s time to take it seriously, and act to protect people everywhere.
Romany Webb is an associate research scholar at Columbia Law School and senior fellow at the Sabin Center for Climate Change Law. Michael Panfil is the director of federal energy policy and a senior attorney at Environmental Defense Fund. They co-authored Climate Risk in the Electricity Sector: Legal Obligations to Advance Climate Resilience Planning by Electric Utilities.