ConEd Invests $1 Billion in Infrastructure Resilient to Climate Change

Font Size:

For the first time, NY utility commission orders climate adaptation measures.

Font Size:

In 2012, Hurricane Sandy caused thousands of New Yorkers to lose power, shutting down the city that never sleeps for days. Now Consolidated Edison, Inc. (ConEd), a major New York public utility that provides electrical services to over 11 million people, wants to take steps to prevent another major power outage. So does the New York Public Service Commission, which recently approved ConEd’s $1 billion proposal to strengthen its facilities against extreme weather events — such as intense storms and heat waves — through varied projects from 2014-2016. Most significantly, the Commission ordered all utilities in the state to consult the best available local climate science, consider how climate change will impact their infrastructure, and “integrate these considerations into their system planning and construction forecasts and budgets.”

As a regulated utility, ConEd must get approval from the New York Public Service Commission before increasing rates. This meant that ConEd had to initiate a rate case in order to raise the funds required to strengthen their systems.

ConEd submitted its initial proposal to the Commission early last year. Several other parties subsequently joined the case, including the City of New York, the State Attorney General, and several environmental non-governmental organizations. These parties advocated that ConEd do a better job of hardening its infrastructure to resist the likely ravages of climate change, including sea level rise, storm surge, and heat waves.

Public comment was also taken, with the vast majority of commenters opposed to the proposal because of the financial effect the proposal would have. Many were angry over ConEd’s performance during Sandy. The AARP also expressed its displeasure through the comment process.

Nevertheless, the proposal moved forward. ConEd, The City of New York, the State Attorney General and the environmental organizations that joined the rate case were able to negotiate an agreement, and filed a joint proposal with the Commission on December 31, 2013. The Commission approved the proposal with some modifications on February 20.

At the recommendation of the Commission, ConEd and the groups have formed a “Storm Hardening and Resiliency Collaborative” both to consider climate change effects on ConEd’s infrastructure and incorporate these findings into their storm hardening projects. The Collaborative is led by the Columbia Center for Climate Change Law, the Environmental Defense Fund, the Natural Resource Defense Council, and the Pace Energy and Climate Center. Alongside the rate case, the Collaborative developed ConEd’s storm hardening investment proposal and in December 2013, submitted a report to the Commission summarizing its work and ConEd’s updated plans. The Commission directed the Collaborative to continue developing ConEd’s resiliency strategy, which it will do so through at least 2014.

ConEd’s storm-hardening projects will target the infrastructure that is particularly vulnerable to extreme weather events: substations, through which electricity travels to the consumer; the electric network distribution system, which delivers electricity to consumers; the gas distribution system; power lines and power plants; and tunnels. These storm-hardening projects will upgrade or replace vulnerable equipment, relocate or elevate critical infrastructure, and install preventative devices, such as submersible equipment, flood control pumps, and alternative generators.

In elevating and installing new infrastructure, the Collaborative decided that ConEd’s projects will use a “FEMA plus three” standard, which means that ConEd will “design projects located within the 100-year floodplain [as determined by the Federal Emergency Management Agency (FEMA)] to withstand the level of a 100-year flood plus three feet.” Non-governmental organizations (NGOs) in the Collaborative express concern that this standard will not protect infrastructure against expected sea level rise over the next forty years. ConEd emphasizes that this standard is a baseline and that each project will be assessed individually to determine the appropriate elevation level.

The Collaborative comprises four working groups. Throughout the last year, these groups assessed various aspects of ConEd’s storm hardening plans in light of the most recent, local climate science. The group discussed alternative strategies to promote resiliency and determined the appropriate flood protection design standard to use in resiliency projects. Additionally, the Collaborative analyzed the resiliency of ConEd’s natural gas system and developed a risk assessment model that prioritized the vulnerability of ConEd’s infrastructure.

These working groups will continue to assist ConEd as it attempts to implement the Commission’s order. One will assist ConEd in examining its storm-hardening projects to be implemented in 2015 and in conducting a climate vulnerability study in 2014.

Another will go beyond storm hardening and study the use of alternative strategies to promote resiliency. Such strategies include distributed generation (DG), which refers to consumer-sited sources of energy like solar panels on roofs, and microgrids, which are local grids that can disconnect from the main power grid to provide electricity under extreme situations. Collaborative NGOs encourage the development of alternative resiliency tools, explaining that although “the storm hardening efforts are designed to build the castle walls higher, the inclusion of DG and microgrids into the grid will allow the inside of the castle to run more efficiently and independently.”

Meanwhile, a third working group will develop a cost-benefit model for prioritizing the projects. On December 26, 2013, the Commission has ordered a “complete overhaul” as to how NY utilities measure the costs and benefits of energy efficiency projects. The Collaborative’s new model attempts to measure a project’s full societal benefit by including costs that are avoided when an outage is prevented or shortened, as opposed to just considering a project’s ability to reduce climate vulnerability risks. The model will be further developed in another Commission proceeding.

A final working group will focus on climate mitigation measures through developing a program to reduce methane gas leakage from ConEd’s natural gas distribution system. Methane is a potent greenhouse gas that Collaborative NGOs advocate addressing.

Other utilities are working on climate resiliency as well. N.Y. Governor Andrew Cuomo recently announced an agreement with FEMA to use $1.4 billion in federal funding for storm repair and grid improvements on Long Island, in cooperation with PSEG Long Island. In addition, National Grid plans to file a climate change vulnerability report with the Commission by the end of the year, and in New Jersey, PSEG has proposed a $3.9 billion, 10-year storm hardening program before that state’s Board of Public Utilities.