In a groundbreaking agreement, Consolidated Edison, one of New York’s major utility companies, will incorporate plans to protect the power system from the effects of climate change as part of a new multi-year rate plan. The settlement, reached Feb. 20 with the New York State Public Service Commission after many months of negotiations, could serve as a nationwide model for restructuring how power companies and other utilities operate in the face of threats from climate change.
The commission said it will require all of the utilities it regulates – electricity, natural gas, steam, telephone, cable and private water systems — to take the latest science on climate change impacts into consideration. Con Ed agreed to undertake a study of how climate change will affect its electricity, natural gas and steam systems in the coming decades, and of how to prepare for these changes.
The Columbia Law School Center for Climate Change Law, an Earth Institute affiliate, was part of a collaborative of academic and environmental groups involved in the Con Ed rate negotiations. The groups pushed for innovative resiliency measures and advised Con Ed on how best to spend a proposed $1 billion in “storm hardening” funds. Although the commission’s order approves the approximately $1 billion in resiliency measures, customer rates should remain essentially flat over the course of the rate plans.
The negotiations were driven in part by the harsh effects of Hurricane Sandy in the fall of 2012, which knocked out power to lower Manhattan and many other areas around New York City and New Jersey.
“We think this is nationally significant,” said Michael Gerrard, director of the Center for Climate Change Law. “It’s the first example of a state utility commission requiring all of the utilities it regulates to take account of climate change in their operational and capital planning. We think it will form a precedent for other states.”
Other groups involved in the collaborative include the Natural Resources Defense Council, the Environmental Defense Fund and the Pace Energy and Climate Center. The negotiations included testimony on climate change impacts such as sea level rise and more frequent extreme weather events such as storms and heat waves. Among those testifying were Radley Horton, a climate scientist at the Earth Institute’s Center for Climate Systems Research; and Klaus Jacob of the Lamont-Doherty Earth Observatory, who has been engaged for years in studying climate resiliency in New York.
“The state’s utilities should familiarize themselves with scientists’ projections for local climate change impacts on each service territory,” said the commission. “These will differ: Other coastal and estuarine utilities also face sea level rise and storm surges, while all the state’s utilities face challenges such as Hurricane Irene and Tropical Storm Lee, Nor’easters, floods, severe winds, increasing ambient heat, and extreme heat events. We expect the utilities to consult the most current data to evaluate the climate impacts anticipated in their regions over the next years and decades, and to integrate these considerations into their system planning and construction forecasts and budgets.”
Gerrard said the Center for Climate Change Law and other groups will continue to work with Con Ed as it develops the climate change adaptation study required by the utility commission.
Among the alternative strategies being studied to make the energy grid more resilient:
- Developing critical peak pricing to reduce load during heat events.
- Creating rate options for customers that will encourage smart charging of electric vehicles.
- Empowering customers to make smarter, lower-carbon energy-use decisions.
- Identifying areas where high-efficiency cogeneration systems and microgrids could be placed to reduce system load, isolate outages, and provide refuges of power “islands.”
For more on the agreement, visit the Columbia Center on Climate Change Law.