Climate change adaptation in the U.S. electric utility sector

Climate Change Adaptation in the U.S. Electric Utility Sector

Melissa Higbee

BA in Geography

University of California Berkeley Berkeley, California (2007)

ARCHNES

JUN 2021

S,

-Submitted to the Department of Urban Studies and Planning

in partial fulfillment of the requirements for the degree of

Master in City Planning

at the

MASSACHUSETTS INSTITUTE OF TECHNOLOGY

June 2013

@

2013 Melissa Higbee. All Rights Reserved

The author here by grants to MIT the permission to reproduce and to distribute

publicly paper and electronic copies of the thesis document in whole or in part in

any medium now known or hereafter created.

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Depart ent of Urban Studies and Planning

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May 23, 2013

Certified by

Professor Stephen Hammer

Department of Urban Studies and Planning

This Supervisor

Accepted by

Associate Profess

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CP Committee

Author

Climate Change Adaptation in the U.S. Electric Utility Sector

Melissa Higbee

Submitted to the Department of Urban Studies and Planning on May 23, 2013 in Partial fulfillment of the

requirements for the degree of Master in City Planning

ABSTRACT

The electric utility sector has been a focus of policy efforts to reduce greenhouse gas emissions, but even if these efforts are successful, the sector will need to adapt to the impacts of climate change. These are likely to include increased heat waves, drought, extreme precipitation events, and sea level rise. Electric utilities play a key role in providing electricity services in cities that will be facing all of these difficulties. Cities depend on electricity service for public health, safety and economic development. This thesis examines how electric utilities in the United States are approaching climate change adaptation and the factors enabling and constraining these efforts. The thesis draws on an analysis of electric utility responses to surveys distributed by the Carbon Disclosure Project as well as case studies of Consolidated Edison, Entergy, and Pacific Gas & Electric.

The case study utilities are incorporating climate change projections into their risk management and capital planning activities. Integrating climate change projections into risk management efforts helps utilities use replacement opportunities to build greater resilience into infrastructure systems and ensure that adaptation strategies take competing demands on resources into account. Both approaches to adaptation are generally recommended by adaptation experts. However, existing internal decision-making may not be well suited for incorporating the uncertainties of climate change impacts. The case study utilities could be using Scenario Planning to develop strategies likely to be effective given a range of possible futures, but they are not.

I argue that state utility regulatory commissions should consider taking a more active role in

providing guidance and oversight to utilities regarding climate change adaptation. They should consider

(1) requiring utilities to submit climate change vulnerability assessments and detailed adaptation plans;

(2) incorporating climate change risk and adaptation considerations into existing electricity plans; and

(3) convening joint climate change planning efforts with utilities, municipal governments, and a range of

other stakeholders. Cities and states that would like to see electric utilities put more emphasis on climate change adaptation should consider sharing climate change projections and forecasts of potential climate change impacts. Provision of such information has been effective in encouraging adaptation planning in the case studies. The actual adaptation strategies that utilities have adopted depend largely on the risks they face and the regulatory and policy environment in which they find themselves. Thesis Supervisor: Stephen Hammer

Title: Lecturer in Energy Planning Thesis Reader: Lawrence Susskind

Acknowledgements

I would like to dedicate this thesis to my grandparents, Jose and Aura Alarcon.

I am grateful to my thesis advisor, Steve Hammer, for his guidance throughout this process and my

reader and academic advisor, Larry Susskind, for his thoughtful feedback.

I would like to thank my mom, dad, and brothers for their support. Thanks to the "Thesis Groupies"

Louise Yeung, Christine Curella, and Daniel Rinzler for encouraging me to start writing early. Thanks to Jenna Kay for sitting me down for some thesis advice as soon as she finished her thesis during my first year at DUSP. Thanks to the whole MCP 2013 class. Your fun spirit and good humor helped make the hard work a little less hard.

A most heartfelt thanks to Daniel Rinzler for encouragement, support, and company during many

thesis-writing hours.

I am grateful to all those who participated in interviews. I could not have written this without their

Table of Contents

1.

Introduction

...

... 7

11.

Resea

rch Design ...

11

Ill. Literature Review ... ... .17

IV. Survey Findings ... 33

V. Con Edison Case Study ... 39

VI. Entergy Case Study ... 53

VII. Pacific Gas and Electric Case Study ... 67

Vill. Cross Cutting Analysis and Findings ... 79

IX. Recom m endations ... 89

E p ilo g u e ... 9 3 W orks Cited ... 95

Appendix A. Interview s ... 102

Appendix B. Coding from CDP Survey Analysis ... 103

I. Introduction

Greenhouse gas (GHG) emissions are now estimated to surpass the worst-case emissions trajectory from the Intergovernmental Panel on Climate Change (IPCC) third assessment report (2001; Ebginer & Vergara 2011). Not only does this demonstrate the urgent need to reduce GHG emissions, but it also highlights the need for cities to figure out how they can adapt to the unavoidable impacts of climate change. The electricity sector has been a focus of international and national policy efforts to reduce GHG emissions for good reason: electricity generation contributes to 40 percent of carbon dioxide emissions in the United States (EIA 2012). The electricity sector will also need to adapt to the impacts of climate change, which are likely to include increased heat waves, drought, extreme

precipitation events, and sea level rise (IPCC 2007). However, how the electricity sector might adapt has not received as much scholarly or policy attention as GHG mitigation and very few cities have explored how their local electricity system may need to adapt to climate change impacts (Ebginer & Vergara 2011; Hammer et al. 2011b).

The electricity sector demonstrates considerable vulnerability to severe weather and climate variability under current climate conditions. For example, during the summer of 2012, severe storms caused power outages across the Eastern Seaboard that left nearly 1.8 million people without power in extreme heat conditions (Anon 2012). During the same summer, drought conditions in the Midwest forced power plants to shut down, reduce capacity, or receive special permission to operate, because cooling waters reached extremely high temperatures or low levels (Wald & Schwartz 2012). Most recently, 2.1 million people lost power in New York and New Jersey during the peak of Hurricane Sandy

(NYS 2013). The electricity outage also severely affected other vital services, such as communications,

healthcare, transportation, drinking water supplies, and wastewater treatment (NYS 2013).

There is no way to know if these events were actually the result of climate change or not, but the outcomes are evidence that the electricity sector has existing vulnerabilities to climactic variability and extreme events, which can have profound impacts on cities. Climate change could exacerbate these vulnerabilities and create new vulnerabilities through affects on both supply and demand (CCSP 2007; Hammer et al. 2011b). On the supply side, for example, drought may reduce hydropower capacity. On the demand side, hotter summer temperatures may increase peak electricity demand for cooling. Furthermore, electricity infrastructure has a long life span, so infrastructure built today may need to cope with the next fifty years of climate change impacts.

Some would argue that the electricity sector has significant capacity to adapt to climate change impacts, because it already frequently responds to weather-related impacts and has considerable financial and managerial resources (Wilbanks et al. 2012a). However, there could be significant

obstacles to turning the sector's capacity to adapt into a reality, such as high costs, the number of actors involved, lack of supportive policies, short-term planning horizons, and uncertainty (UKCIP 2007; Vine

2008). It is important that the electricity sector is able to overcome potential obstacles and adapt to

climate change, because it provides a service that is critical for economic development, public health, and safety (Ebginer & Vergara 2011; Wilbanks et al. 2012a). A well functioning electricity system is especially critical for cities due to their concentration of population and economic activity.

Electricity systems in U.S. cities are often centralized systems with large power generation plants adjacent to sources of cooling water, such as the ocean, rivers, or lakes (Hammer et al. 2011b). Cities are also home to a complex web of transmission (high voltage) and distribution (low voltage) wires (Hammer et al. 2011b). Climate change could increase the vulnerability of both generation and

transmission and distribution (T&D) systems serving cities. For example, extreme precipitation events could result in flooding of power plants located near rivers and heat waves could damage T&D systems.

Cities are also major drivers of electricity demand. In 2008, the International Energy Agency calculated that 76 percent of global electricity demand is associated with urban areas (EIA 2008). Climate change is expected to increase electricity demand in cities, particularly peak electricity demand, which could lead to reliability problems (Hammer et al. 2011b). As such, cities will likely be important

places to focus efforts to manage electricity demand in the face of climate change.

Electric utilities are key providers of electricity services in cities. Utilities own T&D infrastructure and often own and operate power plants. Utilities are often involved in the provision of demand side services, such as energy efficiency retrofits and demand response programs. Lastly, utilities are the entities of electricity sector that most often interface with end-use customers (i.e. a City's residents and business) for billing, customer service, and some educational activities.

Given the significant role that utilities play in providing electricity services in cities, they are also one of the primary organizations responsible for implementing climate change adaptation strategies (Hammer et al. 2011a, table 8.15). Nevertheless, electric utilities' current practice of climate change adaptation is an under-researched area. This study seeks to begin to fill that gap by examining the climate change adaptation strategies that utilities are employing and sorting out which factors are enabling or constraining their efforts. This research is intended to help utilities understand what their

for their consideration as they move forward in this relatively new field. This research also intends to provide policymakers and utility regulators with an enhanced understanding of what they can do to help utilities pursue climate change adaptation.

This study seeks to answer the following questions:

1. What strategies are U.S. investor-owned electric utilities currently employing in an effort to

adapt to climate change impacts?

2. What factors are enabling and constraining climate change adaptation efforts at investor-owned electric utilities?

11.

Research Design

This study examines climate change adaptation strategies being employed by electric utilities because utilities carry out many of the key functions of the electricity sector, including owning and operating infrastructure, providing demand side services, and interfacing with customers. The utility industry is comprised of both investor-owned (IOUs) and consumer-owned utilities (such as municipal utilities and rural cooperatives), but due to time limitations this study focuses on IOUs, because of their dominant role in the economy. Although IOUs are less numerous than consumer owned utilities, they serve nearly 70 percent of customers in the U.S. (APPA 2012). 1OUs are also the most prevalent service provider in the largest metropolitan areas in the U.S: 1OUs provide electricity service in the ten largest metropolitan regions.' Many of the findings are applicable to consumer-owned utilities, such as municipal utilities, but they are less influenced by state-level utility regulation and shareholders, and more so by local government policy (Shively & Ferrare 2007: 84).

The goal of examining the factors that enable and constrain climate change adaptation is to provide recommendations regarding what various actors inside and outside a utility can do to create a policy, regulatory, or business environment that fosters utility adaptation efforts. I identify constraints to adaptation so that actions might be taken to lessen those constraints over time and I identify

enabling factors so that those lessons might be transferred to other utilities and cities.

Methodology

I employed a mixed methods approach by analyzing publicly available survey data that U.S.

electric utilities submitted to the Carbon Disclosure Project and by also conducting case studies of three utilities. The survey analysis provides a broad snapshot the adaptation measures utilities across the country are using and the cases allow for more detailed study of the adaptation strategies that utilities are employing as well as an examination of the context surrounding electric utility adaptation efforts in order to identify enabling and constraining factors.

1 In the Los Angeles-Long Beach- Santa Ana metropolitan region, a municipal utility, serves the City of Los Angeles, but an IOU serves the rest of the metropolitan area.

Carbon Disclosure Project Survey

To better understand what measures and approaches electric utilities in the U.S. are using to

adapt to climate change, this study analyzed investor-owned utility responses to 2012 Carbon Disclosure Project (CDP) surveys. The CDP is a not-for-profit organization that requests information from the world's largest companies on their greenhouse gas emissions, energy use, and the risks and

opportunities from climate change. The CDP makes this information public with the goal of increasing transparency around climate-related risk and opportunity. The analysis includes 23 U.S. investor-owned utility CDP submissions from 2012 and 3 submissions from 2011, for a total of 26 surveys2. The analysis focuses on the most recent year CDP submission to provide a current snapshot of utility adaptation efforts.

The 26 surveys represent utilities located across the country. Of the 25 most populous

metropolitan areas in the U.S., nine did not have a utility included in this analysis. Three out of the nine metropolitan areas are served by publically owned utilities that are not included in the CDP survey. The other six metropolitan areas are served by IOUs that did not participate in the survey: TXU in Dallas, Reliant in Houston, Florida Power & Light in Miami, Tampa Electric, Duquense Light in Pittsburg, and Portland General Electric.

The CDP survey has fourteen sections with a total of approximately 80 questions, the majority of which concern the management of GHG emissions. This analysis focused on three sections of the survey

that included questions about "adaptation" and "managing the physical risks of climate change." The

text box below shows the seven questions analyzed for this study. Particular attention was placed on

questions 5.1d and 6.1.d, because those questions encouraged respondents to describe their adaptation

Survey questions analyzed

2.3 Do you engage with policy makers to encourage further action on adaptation? Please explain (i) the engagement process and (ii) actions you are advocating

5.1 Have you identified any physical climate change risks (current or future) that have potential to generate a substantive change in your business operations, revenue or

expenditure?

5.1c Please describe your risks that are driven by change in physical climate parameters

5.1d Please describe the methods you are using to manage this risk

6.1 Have you identified any opportunities (current or future) driven by physical climate change parameters that have the potential to generate a substantive change in your business operations, revenue or expenditure?

6.1c Please describe the opportunities that are driven by changes in physical climate parameters

6.1d Please describe the methods you are using to manage this opportunity

Limitations

A small sample size and potential response bias limit my ability to generalize about the findings.

Approximately 15 percent of all investor-owned utilities in the U.S. responded to the survey and because this is a voluntary survey, the utilities that responded may be those that are more inclined to engage in

climate change-related activities. Researchers have found that firm size and foreign sales are related to

whether firms disclose information about climate change requested through the Carbon Disclosure

Project, so this analysis may not be as generalizable to smaller utilities (Stanny & Ely 2008).

Another limiting factor is that the CDP survey was not designed for the purposes of this study. For example, the responses are largely open-ended, so survey respondents can describe in their own words how they are managing climate change risks. As a result, respondents may have omitted certain activities because they forgot about them, were unaware, did not think they were important, or did not want them made public. In addition, the primary focus of the survey is on managing GHG emissions, so respondents may have put less effort into answering questions related to climate change adaptation.

Data Analysis

I used content analysis, which involves coding phrases in open-ended text that represent adaptation measures found in the literature, aggregating measures into categories, and counting the

total number of measures in each category. The central idea in content analysis is that the many words of a text are classified into fewer categories, allowing for a quantitative analysis of text (Weber 1990). In

addition, compared with interviews, content analysis is a method where the author of the message is not aware that it is being analyzed, which reduces the danger that the research effort will act as a force for change that skews the data (Weber 1990). Below are the data analysis steps in greater detail:

1. Developed categories that represent all possible adaptation measures based on the adaptation

literature. For example, one category is "capital investments in transmission & distribution" 2. Coded the survey responses for different types of adaptation measures found in the literature.

For example, one code is "undergrounding." Therefore, survey text that says, "Program highlights include undergrounding wiring systems in key areas," is coded as "undergrounding."

3. Attributed each adaptation measure "code" to a category. For example, the code

"undergrounding" is attributed to the category "capital investment in transmission and distribution." All codes and categories are listed in Appendix B.

4. Recorded the number of adaptation measure "codes" found in the survey texts.

5. Counted the total number of adaptation measures found in the text according to category and

utility (Appendix C).

Case Studies

To overcome some of the limitations of survey analysis, this study also includes case studies of three utilities: Consolidated Edison, Entergy New Orleans, and Pacific Gas & Electric. Compared to the survey analysis, the case studies provide a more in-depth look at the approach and strategies utilities are using to adapt to climate change and the factors that are enabling and/or constraining their efforts. Given that climate change adaptation in the electricity sector is a nascent area of activity and research, three cases were selected that would allow for a discussion of an array of adaptation strategies and enabling and constraining factors. According to the CDP surveys, these utilities are employing a relatively high number of adaptation measures, a variety of adaptation measures, and stakeholder engagement. The cases were also selected for their regional variation to allow for exploration of potential enabling or constraining factors that vary in different regions of the country: the role of participating in restructured or vertically integrated electricity markets, the role of different utility commissions, the role of cities and states with different levels climate change adaptation efforts, and the role of past experiences with climate-related hazards.

Table 1: Case Study Utilities

Case Study Utility Market Major Cities State & Local Regulatory

Adaptation Commission

Activity

Consolidated Edison Restructured New York High New York State

(Con Ed) Public Service

Commission

Pacific Gas & Electric Restructured San Francisco, High California Public

(PG&E) Oakland, San Utility

Jose Commission

Entergy New Orleans Vertically New Orleans Low New Orleans City

(ENO) Integrated Council

Data Collection

Data collection involved reviewing publically available reports and meeting notes, all available CDP submissions (2007 to 2012), internal presentation materials, and semi-structured interviews with:

e Utility managers involved in climate change adaptation

* State and local planning officials who have engaged with the utility on climate change

adaptation

- State public utility regulators

* Environmental, consumer, and public health organizations that have engaged with the utility on

climate change adaptation

The interviews with utility managers were particularly important sources of information and information provided by those interviews was corroborated with publically available documents whenever possible. Additional interviewees were selected using a snowball sampling technique, which involved asking each interviewee for recommendations of other people with whom I should speak, with

a particular focus on the utilities' adaptation partners and stakeholders. I conducted a total of 18

interviews, six for each case study. Interviewees were able to choose whether they wanted their name,

title, and direct quotes included in the research. Interviews are cited as confidential if the interviewee

Ilil. Literature Review

Climate Change Vulnerability and Adaptation

Climate change vulnerability is the degree to which a system is susceptible to, and unable to cope with, the adverse impacts of climate change (IPCC 2001; Adger 2006). The key factors of vulnerability are exposure, which is the degree to which a system experiences a climate change impact, sensitivity, which is the degree to which a system is affected by the impact, and adaptive capacity, which is the ability of the system to adjust practices, processes, or structures to offset potential damage (IPCC 2001; Adger

2006). Climate change vulnerability does not exist in isolation, but rather it is driven by human actions

that interact with political, economic, physical, and ecological systems (Adger 2006).

Climate change may increase the vulnerability of the electricity sector through both supply side and demand side impacts, which are summarized in Tables 2 and 3 below (CCSP 2007; Ebinger & Vergara 2011; Wilbanks et al. 2012). For both supply and demand, the primary vulnerability is disruptions from extreme weather events, but climate change impacts will likely make it more challenging for electricity supply and demand to remain in balance (Wilbank et al. 2012). On the supply side, climate change could increase vulnerabilities if storms become more intense, if regions dependent on hydropower and power

plant cooling water experience drought, and if hotter temperatures decrease generation and transmission efficiencies (CCSP 2007; Wilbanks et al., 2012).

On the demand side, climate change will likely reduce total heating requirements and increase total cooling requirements for buildings (CCSP 2007; Wilbanks et al. 2012). This change implies an

increased demand for electricity, which supplies almost all of the energy for cooling services, namely air conditioning (CCSP 2007). Climate change may also exacerbate urban heat island conditions in cities, which refers to the fact that cities are full of surfaces that trap heat, leading to higher air temperatures (Hammer at al. 2011b). In the summer, urban heat island conditions can significantly increase local electricity demand for air conditioning (Hammer et al. 2011b). As a result, climate change is expected to have a larger impact on peak electricity demand than average demand (Wilbanks et al. 2012). Growth in peak demand can result in shortages of supply capacity, increasing the risk of blackouts and brownouts (Miller et al. 2008).

Table 2: Potential Supply Side Electricity Sector Vulnerabilities

Climate Change Specific Potential Supply-Side Assets Impacts Electricity Sector Vulnerabilities

Impacts

Damage to equipment, Increased intensity of Flooding, ice, _{supply chain disruption,}

storms _{wind reduced reliability}

Reduced plant Reduction in supply Thermal Power Plants Higher temperatures _{efficiency availability}

Reduced water _{Reduction in supply} Drought _{availability for}

availability cooling

Increased intensity of Flooding, ice, Damage to equipment,

Transmission and storms wind reduced reliability

Distribution Heatwaves, Damage to equipment,

Higher temperatures extreme heat reduced reliability

Changesin Changes in

Ch i i n atiming s p and Reduction in supply Hydropower _{precipitation and quantity of availability}

snowpack _runoff

Reduction in _{Reduction in supply} Solar Power Higher temperatures _{solar cell availability}

efficiency

Wind Power Change in wind speed Uncertainty of Increased uncertainty and direction expected output

Source: Adapted from CCSP 2007; Wilbanks et al. 2012; Ebinger & Vergara 2011.

Table 3: Potential Demand Side Electricity Sector Vulnerabilities

Climate Change Impacts Specific Electricity Sector Impacts Vulnerabilities

Hotter average Increased demand for cooling, Reduced reliability, increased temperatures, extreme Increased peak demand; Reduced revenue uncertainty

heat events demand for heating

Increased intensity of Damage to customer-side energy Increased revenue uncertainty storms using assets (buildings, equipment

etc).

Source: Adapted from CCSP 2007; Wilbanks et al. 2012; Ebinger & Vergara 2011.

In addition to vulnerabilities, climate change impacts could result in opportunities for the electricity sector (CCSP 2007). For example, milder winters could reduce some operational challenges, such as fuel delivery disruptions due to snowstorms, and if managed properly, increased demand for cooling services could be a business opportunity for utilities (CCSP 2007). Nevertheless, a study on the

will likely present more vulnerabilities than opportunities (Hammer et al. 2011a). Climate change will likely increase the difficulty of ensuring enough electricity supply during peak demand periods, increase the difficulty of ensuring reliability during extreme weather events, and exacerbate problematic

conditions, such as the urban heat island affect and coastal flooding (Hammer et al. 2011a).

An additional concern for policymakers is that vulnerabilities in the electricity sector could result in cascading failures with other infrastructure services due to their interconnectedness (Wilbanks et al. 2012a). Electricity infrastructure is highly interconnected with communications, transportation, potable water, and wastewater infrastructure (Wilbanks et al. 2012a). Furthermore, infrastructure failures have consequences that go beyond the physical infrastructure itself to the services that the infrastructure provides. The loss of those services entails economic, social, and environmental consequences (Wilbanks et al. 2012a), such as illness from contaminated water or lost earnings from business closures.

Adaptation is a way for a system to reduce vulnerabilities and take advantage of opportunities

(IPCC 2007: 6). Climate change adaptation is defined as an adjustment in response to observed or

expected changes in climate and their affects in order to reduce the adverse impacts of change (IPCC

2007; Adger 2006). Two different concepts of adaptation apply to the strategies that electric utilities can

employ to adapt to climate change: (1) Adaptation as reducing vulnerabilities and (2) adaptation as enhancing resilience.

The framework of adaptation as reducing vulnerabilities leads us to define adaptation strategies as those that seek to reduce exposure, reduce sensitivity, or enhance adaptive capacity (IPCC 2001).

* Reduce Exposure: Take steps to reduce the degree to which utility assets and operations

experience a climate change impact. For example, relocate substations away from areas prone

to coastal flooding.

* Reduce Sensitivity: Take steps to reduce the degree to which the utility assets and operations are affected by the climate change impact. For example, install saltwater resistant

transformers in areas prone to coastal flooding.

* Increase Adaptive Capacity: Take steps to enhance the ability of the electric utility to undertake adaptation. For example, provide utilities with coastal flooding maps that include exposure from sea level rise.

A second concept of adaptation is actions that enhance resilience. The IPCC defines resilience as

"the ability of a system to absorb disturbances while retraining the same basic structure and ways of functioning, the capacity for self organization and the capacity to adapt to stress and change" (2007:

the face of changing climate. Resilience does not mean ensuring an asset, organization, or system looks exactly the same before and after a disturbance. Rather, resilience means ensuring that the asset, organization, or system provides the same functionality, such as reliable electricity service, in the face of disturbance. Resiliency strategies may take the form of adjustments in the physical electricity

infrastructure, such as deploying technologies that allow the grid to recovery more quickly from an outage (Wilbanks et al 2012b). Resiliency strategies may also take the form of adjustments to

institutions and organizational form that "enable technological evolution, new information exchange or decision making procedures" (Pelling 2010: 56).

Adaptation Strategies

Given the vulnerabilities described above, there are many adaptation strategies that utilities can implement to reduce their vulnerability and enhance their resilience. Several studies have examined and organized potential adaptation strategies for the electricity sector found in the literature (Hammer et al.

2011b; Ebinger & Vergara 2011). Table 4, below, organizes adaptation strategies from the literature

according to the different functions and responsibilities of an electric utility, such as transmission and distribution, internal capacity building, and planning activities. This table serves as a framework from which to examine the adaptation strategies utilities are pursuing in subsequent sections of this paper.

Table 4: Electric Utility Adaptation Measures by Category

Category Sub-Category Example Adaptation Measure Adaptation Purpose

Capital investments in Reduce system sensitivity to an Diversify supply sources climate change impact

Changes in operating Adjust hydropower operations to Reduce sensitivity to changes practices changes in river flow patterns in precipitation

Transmission Capital investments in Bury wires underground Reduce exposure to high winds

&

Operating practice . . Reduce sensitivity to high Distribution Increased tree trimmingwid

changes in T&D winds

Conservation, energy Establish demand response Reduce sensitivity to peak Demand efficiency, demand programs demand during extreme heat

Side

Support investment in rooftop Enhance resiliency with Distributed generation solar panels _{decentralized power sources}

Enhance adaptive capacity by Create internal adaptation saigifrain

Ineral Changes in Staffing .okn ru sharing information,

Internal working group _{developing partnerships}

Capacity Enhanced monitoring _{Enhance adaptive capacity by}

Enhncdldniorng Early warning systems for rdcn epnetm of climate change temperaturereducing response time

indicators

Enhance resiliency of the Internal: emergency _{Storm contingency planning system if the face of severe}

planning _weather

Internal: vulnerability Enhance adaptive capacity by assessment; adaptation Vulnerability assessment increasing awareness of Planning strategy _{PlanningReduce} vulnerabilities

system sensitivity by Activities Integrated resource plan that seleingea res tio

Internal: resource includeselecting a resource portfolio

planning projections/scenarios that performs well in a range of future conditions

Enhance adaptive capacity by External planning Patation in sharing information and

adaptation plan developing partnerships Encourage widespread customer Reduce sensitivity to peak Stakeholder education action to manage electricity use demand conditions or supply

more efficiently shortages

Advocacy for more energy Reduce exposure to peak Education, Policy advocacy efficient building codes demand during extreme heat. Advocacy, Advocacy for formal review of

Research Regulatory advocacy adequacy of regulatory policies in Enhance adaptive capacity by the face of climate change reducing regulatory barriers Funding/ participating Provide data to researchers Enhance adaptive capacity by in research compiling a climate change risk increasing awareness of risks

database

Enhance adaptive capacity Purchase a stronger isurance _{through the availability of} Sharing Risk Insurance policy for an area at risk of _{financial resources after a}

damaging flood Source: Adapted from Ebinger & Vergara, 2011; Hammer 2011b; Wilbanks et al 2012b.

It is possible to distinguish between technological, behavioral, and sector-wide strategies. In the table above, the capital investment in supply and T&D are considered technological strategies (Ebinger

& Vergara 2011). One subset of technological strategies is "hardening" strategies, which involve physical

improvements to infrastructure, such as installing transformers that can tolerate higher temperatures or building a berm around a power plant for flood-proofing (Hammer et al. 2011a). Another subset of technological strategies is known as "smart grid," which is the integration of information technologies into the grid to improve customer management of energy use, system reliability, and integration of cleaner sources of electricity (Schwartz 2010). Smart grid investment are under way for reasons other than adaptation, but some smart grid technologies that allow for greater monitoring, control, efficiency, and flexibility of the grid "would appear to be highly useful" for climate change adaptation (Wilbanks et al. 2012: 54).

Many of the categories in the table above are considered behavioral strategies: operational changes, planning, and internal capacity building. Behavioral strategies could include the

reconsideration of the location of electricity investments based on climate change risks (Ebinger & Vergara 2011). These measures hinge upon future climate risks being integrated into decision-making and management processes, including relevant planning and management decisions (Ebinger & Vergara 2011).

There are also sector-wide adaptation strategies (Hammer et al. 2011a; Ebginer & Vergara 2011). One example is the adoption of policy frameworks that facilitate the internalization of adaptation concerns into electricity systems (Ebginer & Vergara 2011). Other examples under consideration in New York include a regional working group, a climate change risk database, or a formal review process of the appropriateness of current regulatory policies in the face of climate change impacts (Hammer et al. 2011a). Utilities would likely not be the primary entity responsible for implementing sector-wide strategies, but they play a critical role in supporting these strategies, which is represented by the category "Education, Advocacy, and Research" in Table 4.

Approaches to Adaptation

Climate change adaptation is often considered a risk-management strategy (NRC 2010; Wilbanks et al. 2012b). Risk is defined as the probability of an impact multiplied by the consequences if the impact occurs. Electric utilities manage many risks in their normal operations, such as the risk that prices will

expected (Shively & Ferrare 2007). These risks are often managed through internal risk management programs, which involve measuring risk levels frequently, structuring physical transactions, the use of financial instruments, and management of stakeholder relationships (Shively & Ferrare 2007).

The risks associated with climate change impacts can also be managed through internal programs, but climate change risk management is different from traditional risk management given the complexity and uncertainty around climate change and its impact on the electricity system (Ebinger & Vergara 2011). There is uncertainty regarding the severity and timeframe of climate change, uncertainty regarding if and how changing climate parameters will result in impacts on the electricity system, and uncertainty regarding the costs, benefits, and effectiveness of adaptation options (Ebinger & Vergara 2011; NRC 2010).

Given these uncertainties, "nearly every credible source indicates that the appropriate adaptation strategy is rooted in risk management for an uncertain future rather than precise projections for optimal decisions" (Wilbanks et al. 2012b: 49). Climate change risk management requires developing strategies that perform well in multiple possible future scenarios. A critically important step towards developing such strategies is conducting a vulnerability assessment that considers possible exposures to risk under a

range of possible future trends and conditions (Wilbanks et al. 2012b; NRC 2010). Climate change risk management also requires frequent engagement with the latest climate science to identify changes that are relevant to the system and it also requires frequent monitoring and reevaluation of adaptation options as information and conditions change (NRC 2010). Climate change risk management needs to be rooted in flexibility and a continuous learning process in order to manage uncertainty (Wilbanks et al

2012b).

In addition to vulnerability assessments, Scenario Planning is another tool for exploring alternative futures and assessing strategies for reducing vulnerability and increasing resiliency of critical services (Susskind 2010). Instead of focusing on a single prediction, scenarios focus on uncertain drivers and complex interactions (Susskind 2010). A carefully constructed set of scenarios can highlight future risks and opportunities, providing managers with the information needed to assess the effectiveness of alterative strategies and expanding an organization's understanding of future risk by systematically exploring plausible futures (Susskind 2010). Scenarios presume that in a highly uncertain and dynamic situation there is no single best strategy, but rather a portfolio of strategies that allows an organization to be prepared as conditions change (Susskind 2010).

Figure 1: Climate change adaptation as a risk management process

ldentifv current andI

tbtffl-v ChIll-Itt-'

clia ngcs t elevan t to

the ,,vstenl

sI

Source: NRC 2010.

"No-regrets" or "reversible" adaptation strategies tend to perform well in light of an uncertain future (Hallegatte 2008). No-regrets strategies yield benefits even if climate change impacts do not materialize as predicted and reversible strategies allow a utility to change course if unanticipated problems arise or the measure proves ineffective (Hallegatte 2008). Energy efficiency is an example of a no-regrets strategy, because it delivers cost savings regardless of how exactly the climate changes (Hammer et al. 2011b). No-regrets and reversible strategies tend to be "soft" strategies because they imply much less path dependency and irreversibility than "hard" adaptation investments (Hallegatte

2008). For example, demand side management can help avoid large-scale investments in generation or

reinforcement and extensions of T&D networks that are not easily undone (Ebinger & Vergara 2011). Nevertheless, demand side management faces significant barriers to implementation, such as behavioral, policy, and institutional barriers (Ebinger & Vergara 2011).

Because electricity infrastructure is highly connected to other forms of essential services and because there are many demands on electricity systems (i.e. reliability, economic development, reduced emissions) risk management process should also seek to identify adaptation strategies with co-benefits across sectors and across policy goals (Wilbanks et al. 2012b) Identifying strategies with co-benefits

Identifyoprtiie Ir co-benefits across adaptation options

L

bascd (In ;ul appraisal

assess all of the risks and adaptation options in the electricity sector. As such, collaborative risk

management that enables stakeholder groups to engage in constructive discourse, information sharing, strategy development, implementation, and monitoring and evaluation is critical (Wilbanks et al. 2012b; Susskind 2010; NRC 2010). Furthermore, bundling climate change adaptation with other agendas is "virtually certain to attract more widespread buy-in" (Wilbanks et al. 2012b: 53).

The timing of adaptation investments should also be a consideration in climate change risk management. Given that many electricity infrastructure investments are long lived, early adaptation action will generally be less costly and more effective than repairs or retrofits (Ebinger & Vergara 2011). In addition to being long lived, electricity infrastructure and equipment have finite lifetimes, so in any given year, many items are due for replacement (Wilbanks et al. 2012). Taking advantage of

opportunities provided by infrastructure and equipment replacement can help move systems towards being better adapted at a lower cost (Wilbanks et al. 2012; Hammer et al. 2011a). Smaller investments in infrastructure with a shorter lifespan span may allow for greater flexibility in upgrading and

incorporating of the latest climate knowledge in system design (Hallegatte 2008).

Innovation can also help reduce the costs of adaptation. There are likely alternatives for reducing risks that require going beyond currently available technologies and practices (Wilbanks et al. 2012). Innovative approaches can often reduce the net cost, but legal, regulatory, and policy barriers may need to be addressed in some cases (Wilbanks et al. 2012). Utilities can promote innovation with internal

incentive structures that promote and reward innovative risk management. In addition, utilities can advocate for changes to regulation or policy that would help unlock innovation.

Summary of Appropriate Approach to Electric Utility Adaptation

- Assess vulnerabilities under a range of possible future trends and conditions using tools such as vulnerability assessments and scenario planning (Wilbanks et al. 2012b; NRC 2010; Susskind 2010).

e Reduce known vulnerabilities to climate change impacts through changes to technologies, materials, and business strategies (Wilbanks et al. 2012b).

e Prioritize flexible adaptation strategies that do not close off future options (Hallegatte 2008). - Monitor, evaluate and learn from emerging experience with impacts and adaptation responses

(Wilbanks et al. 2012b).

e Focus on replacement opportunities provided by infrastructure and equipment toward the end of their lifetime for greater cost-effectiveness (Wilbanks et al. 2012b; Hammer et al. 2011b).

e Through collaborative risk management, develop strategies with co-benefits with other sectors and other agendas to address the interconnected nature of electricity infrastructure and attract more widespread buy-in (Wilbanks et al. 2012b; Susskind 2010).

e Identify and engage stakeholders and ensure they are well-informed and their input is taken into account (UKCIP 2007). Stakeholder engagement should enable constructive discourse, information sharing, and partnerships that allow institutions to take on risk management roles for which they are best suited (Wilbanks et al. 2012b; Susskind 2010).

e Promote innovation through internal structures and incentives and policy and regulatory advocacy when needed (Wilbanks et al. 2012). Search for strategies to reduce risk that go beyond currently available technologies and practices.

A concept that is related to climate change adaptation is disaster risk reduction (DRR). Disaster

risk reduction seeks to minimize disaster risks through prevention, mitigation, preparedness, and recovery (Weaver, 2009). DRR is also a risk management activity, but it addresses both environmental and human induced hazards, such as hurricanes, earthquakes, and oil spills. Climate-related hazards are only one type of hazard that DRR addresses (Weaver 2009).

Climate change adaptation is different than DRR, because it seeks to address the long-term impacts of climate change (Weaver 2009). Whereas DRR focuses on reducing foreseeable risks based on previous experience, climate change adaptation seeks to manage risks outside of the realm of historical experience (Weaver 2009). As such, climate change adaptation originates with and requires continued engagement with scientific projections of how the climate will change over the long-term (Weaver

2009). Due to the uncertainty associated with climate change, adaptation also has a greater emphasis

on adaptive management and flexibility, that is, monitoring both the climate science and effectiveness of adaptation options over time and being able to adjust to new and unexpected conditions (NRC 2010).

Key Enabling and Constraining Factors

A firm's approach to adaptation is strongly influenced by the regulatory context, market

context, external resources (financing, skills, and expertise), and by interactions with actors outside the organization (Berkhout et al. 2006: 149). Given that utilities are regulated as natural monopolies, regulation and other government policies are undoubtedly key factors for enabling or constraining adaptation, but financial rewards will remain a prime motivator for investments (Ebginer & Vergara

government policies surrounding electric utilities that are likely to play a significant role in enabling or constraining adaptation efforts.

Business Model

Electric utilities carry out many of the core functions of the electricity sector, but exactly which functions an electric utility carries out depends on whether it is vertically integrated or restructured

(RAP 2011). A vertically integrated utility (1) generates electricity at power plants that they own, (2) purchases additional electricity needed for distribution, (3) distributes electricity, and (4) sells electricity to its customers and other utilities (RAP 2011). This type of utility earns revenue by generating electricity

at their own plants and transporting it to customers. A restructured utility participates in two functions:

(1) purchasing electricity in wholesale markets and (2) distributing it to customers (RAP 2011). This type

of utility generates revenue by transmitting electricity to customers or other utilities (RAP 2011). There are also different ownership models for utilities. Investor-owned utilities (1OUs) are for-profit corporations owned by public or private shareholders (Shively & Ferrare 2007). They serve almost

70 percent of customers in the U.S. and sell almost 60 percent of the electricity consumed (APPA 2012).

Consumer-owned utilities (COUs) are comprised of municipal utilities, utility districts, and cooperatives (RAP 2011). They are more numerous than IOUs and serve about 30 percent of the population (APPA 2012). Due to time constraints, this paper focuses primarily on investor owned utilities because of their dominant economic role in the sector. Many research findings are applicable to COUs, but they are less influenced by state regulatory policy and more influenced by local policy (RAP 2011).

Regulatory Context

Electric utilities are regulated as "natural monopolies," so regulators determine how a utility recovers its costs and its rate of return on investment (RAP 2011). Because utility profits and incentives are tied to regulation, utilities care a great deal about regulation and the opinion of regulators (RAP

2011). Most utility regulation takes place at the state level with state regulatory commissions that are elected or appointed by governors and are charged with protecting public health and safety while also

keeping electricity affordable (RAP 2011).

Each state regulatory commission's authority differs according to its authorizing statute and its interpretation of that statute (RAP 2011). Some commissions are cautious in their interpretation while others interpret public interest obligations as providing authority to regulate more widely (RAP 2011). Most state regulatory commissions, however, perform the functions described below in Table 5 (RAP

2011). The table also includes ways that these functions could service as factors enabling adaptation at electric utilities. These functions could also be constraints if carried out without sensitivity to climate change impacts.

Table 5: Utility Commission Regulatory Functions and Potential Adaptation Enabling Role

Common Regulatory Commission Functions Potential Enabling Roles for Adaptation

Determine the revenue requirement and Guidance on eligibility of adaptation-related utility rates investments for rate reimbursement; Structure

utility rates to enable demand responsiveness (Ex: dynamic pricing)

Set service quality standards and consumer Require robust storm plans and conduct protection requirements evaluations and drills.

Oversee the financial responsibilities of the Examine adaptation-related investment and utility, including reviewing and approving require long-term planning take climate capital investments and long-term planning change impacts into account.

Review and approve comprehensive supply Require that resource plans are tested against resource plans future scenarios that include climate change

projections and uncertainties; Provide opportunities for collaborative decision making.

Approve the entry of competitive retailers into Allow microgrids and ESCOs to operate in the state's market utility service territory to provide customers

with energy management options Source: Adapted from RAP 2011

In addition to the potential enabling role that regulation can play, traditional utility regulation has the potential to constrain adaptation in at least two important ways: the tendency to overvalue capital-intensive investment and the tendency to increase throughput of electricity. Traditional utility regulation may cause utilities to use capital-intensive adaptation strategies even if "soft" strategies have greater efficacy. This tendency is due to the Averch-Johnson Effect, which suggests that utilities will overbuild because their allowed rate of return is a function of their capital investment (Averch &

Johnson 1962; RAP 2011). According to this theory, a company that is allowed a return on investment in excess of its actual cost of capital will tend to over-build its system (RAP 2011).

Regulators try to overcome this tendency through "prudence reviews," in which regulators determine if a new facility was built in an economic fashion (RAP 2011). If a regulatory commission deems the planning or construction imprudent, it may disallow a portion of the investment, refusing to

over-investment in capital-intensive projects or "gold-plate" the system and help protect consumers from exceedingly high rates (RAP 2011).

Like other utility investments, adaptation-related investments will likely need to be deemed "used and useful" under prudency review if the costs are to be passed on to customers. Recent research has raised the concern that regulators and utilities "may increasingly find themselves in situations where, because of uncertainty over the exact severity or timeliness of climate change risks...it is unclear whether capital investments proposed by utilities to enhance the climate resilience of their distribution system will be eligible for rate reimbursement" (Hammer et al. 2011b: 280). Although adaptation-related investments may serve public interest goals, such as safety and reliability, regulators must balance those goals with keeping prices at reasonable levels. Hammer et al. suggests that guidelines clarifying this matter may be helpful for utility capital investments and maintenance planning (2011b).

Under traditional regulation, utilities also have a throughput incentive, which refers to the incentive to increase the volume of electricity utilities transmit through their wires to increase revenue (RAP 2011). Demand side strategies, such as energy efficiency and distributed generation, are key strategies for reducing the electricity system's sensitivity to climate change impacts, such as peak demand during heat waves (Ebinger & Vergara, 2011; Hammer et al. 2011b). However, demand side managment often reduces the amount of electricity being transmitted through a utility's wires.

Therefore, an important element of regulation is whether utilities can generate revenue independently of transmitting more electricity, otherwise they are likely to resist demand side strategies that would reduce electricity sales and their revenues (RAP 2011).

Regulators have devised a number of policy tools to overcome the throughput incentive, including decoupling, incentives, and mandates (RAP 2011). Decoupling policies are designed to ensure that utilities' revenue is independent of their sales volume (RAP 2011). This policy removes the utility's disincentive for energy efficiency or other measures that reduce consumer usage levels. Another tool is incentives for preferred actions or performance (RAP 2011). Some commissions have established incentives to reward utilities achieve specific goals, such as a bonus to the rate of return for exceeding energy efficiency goals or penalties for failure to maintain commission-established goals for reliability (RAP 2011). Regulators could potentially use incentives for preferred actions in accordance with adaptation strategies. Lastly, commissions often require utilities to meet mandates on investment in energy efficiency and renewable energy (RAP 2011).

Other regulatory tools

Integrated Resource Planning (IRP) requires a utility to develop a publicly available plan for the best way to meet consumer needs over time, usually from ten to twenty years (RAP 2011). IRPs are developed with the involvement of the regulator and often include other stakeholders, such as the grid operator and environmental and consumer advocates (RAP 2011). IRPs evaluate how electricity demand could change over time and the range of supply and demand options for meeting future needs, including

new power plants, distributed generation, and energy efficiency (RAP 2011). IRPs evaluate resource mixes for cost-effectiveness across a range of future scenarios (RAP 2011). Weather and population change are often included in the future scenarios and researchers have argued that IRPs can also include climate change impacts and uncertainties in existing analysis methods (Coughlin & Goldman 2008). One challenge that arises, however, is that resource planning is distributed across several types of

organizations that operate at different spatial scales (Coughlin & Goldman 2008). For example, a utility may operate within a single county, whereas a grid operator may cover several states. It's important that the incorporation of climate change impacts in the analysis preserve the spatial variations in weather systems (Coughlin & Goldman 2008).

Forward-looking planning processes, such as IRPs, provide an opportunity for regulators to incorporate collaborative decision-making into the processes for developing plans and agreements. Compared to traditional regulatory procedures, collaborative processes allow for greater stakeholder participation, improved working relationships, and joint fact-finding (Raab 1994). These efforts tend lead to agreements that all parties are more committed to, leading to improved implementation and fewer appeals (Raab 1994). Collaborative efforts have been used to design demand side management programs and integrated resource management plans (Raab 1994). Given the complexity and

uncertainty of climate change impacts, regulators utilities, and other stakeholders would likely benefit from collaborative problem solving regarding adaptation.

Regional Regulation

In many parts of the country, regional grid operators, also known as independent system operators (ISOs), control the electric grid and operate regional wholesale electric markets (RAP 2011). They determine when and which power plants input electricity on the grid and ensure that it flows where needed. ISOs also plan transmission infrastructure (RAP 2011). ISOs could play an indirect role enabling utility adaptation by incorporating climate change impacts in the transmission planning process

(Coughlin & Goldman 2008) and by managing their wholesale markets so that energy efficiency and demand response can participate as resource providers (Ebinger & Vergara 2011).

Federal Regulation

The Federal Energy Regulatory Commission (FERC) regulates the transmission of electricity across states and the regional wholesale markets administered by the Independent System Operators

(RAP 2011). FERC also regulates the planning processes that the ISOs undertake and their tariffs and conditions of service. Except when a utility owns interstate transmission, FERC does not directly regulate electric utilities, but it greatly shapes the electricity markets in which utilities are participants.

FERC also regulates reliability of the interstate power system. In 2003, the Commission designated the North American Reliability Corporation with the responsibility to develop and enforce standards to ensure the reliability of the interconnected interstate power system, including standards that address vegetation management, emergency preparedness, and transmission planning (FERC 2012;

NERC 2013). Lastly, to help support the modernization of the Nation's electric system FERC is focusing

on advancing issues associated with a smarter grid, such as demand response and advanced metering (FERC 2012).

State and Local Policy Context

State and local governments play an important role in shaping the policy context around utilities and climate change adaptation. As of 2012, at least 13 states have climate adaptation plans and

numerous states have created sector specific plans that consider long-term climate change, such as coastal management plans (Bierbaum et al. 2012). Most adaptation efforts to date, however, have occurred at the local and regional levels (Bierbaum et al. 2012). Local governments are using the tools in their authority for adaptation: land use planning, provisions to protect infrastructure and ecosystems, building codes, and emergency preparation, response, and recovery (Bierbaum et al. 2012). Several cities have moved passed the planning stage and are now implementing adaptation strategies

(Bierbaum et al. 2012), but adaptation is still a relatively new concept among local governments (Carmin et al. 2009). Moreover, the energy sector has been less often studied in local-level adaptation planning than sea level rise, health, and water resources (Hunt & Watkiss 2010).

One of the challenges for local government involvement in electricity sector adaptation is that many cities lack direct regulatory authority over the local utility (Hammer et al. 2011a). As such, in order to advance an agenda of increased climate resiliency of the electricity system, local officials must pursue

advocacy, education, or partnerships rather than direct regulation (Hammer et al. 2011a). An exception is municipal utilities, which are generally subject to control by the City Council (RAP 2011).

Despite these challenges, some of the limited literature on the subject indicates that local level adaptation planning can influence electricity sector adaptation. For example, in New York State, climate change adaptation is a new area of focus for energy companies and few have engaged in comprehensive assessments of their climate change-related operating vulnerabilities (Hammer et al. 2011a). The

exception, however, were companies operating in New York City, many of whom were involved in a climate change adaptation initiative led by the city's Office of Long Term Planning and Sustainability (Hammer et al. 2011a). These companies tended to have internal working groups, developed new policies or procedures, or began to make operational changes with climate change impacts in mind (Hammer et al. 2011a).

IV. Survey

Findings

This chapter discusses findings from the analysis of investor owned utility responses to Carbon Disclosure Project (CDP) surveys regarding the climate change adaptation activities they are currently pursuing. For a more detailed discussion of the methodology, please see Chapter II.

Approximately a quarter of utilities that responded to the CDP survey reported no adaptation measures or the measures they did report did not qualify as adaptation according to the literature. An example of a reported measure that does not qualify as adaptation is "Dominion ... focuses on

monitoring weather and responding to weather events," because it only discusses weather and not climate nor does it discuss a enhancement of weather monitoring as a result of considering climate change impacts. Another example of a reported measure that does not qualify is "The company is not actively planning to manage or adapt to changes in Great Lakes water levels or temperatures," which recognizes a potential climate change risk, but indicates that the company is not currently planning on managing that risk.

Given the limitations of the CDP survey, including potential response bias due to its voluntary nature, it's difficult to extrapolate from this data to say that a quarter of utilities are not engaged in climate change adaptation. Nevertheless, the finding of a quarter of utilities not reporting any

adaptation is not surprising given that, according to the literature, the electricity sector has been very focused on mitigation while adaptation has been underrepresented in action and investment (Ebginer & Vergara 2011).

The adaptation measures reported in the surveys were analyzed according to the categories and subcategories found in Table 4 of the literature review. The most common categories of adaptation measures that utilities reported were (1) transmission & distribution, (2) planning activities, and (3) supply. These three categories account for nearly three-quarters of all adaptation measures.

Figure 2: Number of adaptation measures by category 40 35 30--25 20 -15 10 + 5-0 +--- ----

---Supply Transmission Demand Side Internal Planning Education, Additional

& Management Capacity Activities Advocacy, Insurance

Distribution Building Research

Source: Author analysis of 2012 CDP survey data

Transmission and distribution (T&D) adaptation measures are heavily concentrated in the sub-category of capital investments while operational changes were much less common. In fact, the most commonly reported adaptation measure across all categories was capital investments in T&D: it accounts for 24 percent of all adaptation measures reported in the surveys. Examples of reported T&D capital investments include investments in smart grid technologies, including automation and advanced metering, investment in new transmission lines, hardening T&D to better withstand wildfires, hardening T&D to withstand extreme weather, and undergrounding lines. The T&D operational changes reported were nearly all enhancements in vegetation management.

Figure 3: Detail on transmission & distribution-related adaptation measures

30 25 20 1 5 --- - ~ ~.. 101 5 0

Capital investments in T&D Operating practice changes in T&D