Climate Risk in the Electricity Sector: Legal Obligations to Advance Climate Resilience Planning by Electric Utilities
Electricity generation, transmission and distribution, and load are all impacted by weather patterns. Electric system assets have been designed for historic weather conditions, with the goal of ensuring reliability and quick recovery following extreme events. However, climate change is causing major shifts in historic weather patterns and more frequent and severe extremes, which are creating new risk profiles for the electric system. Proactive climate resilience planning by electric utilities to identify, respond, and rationally allocate these climate risks is thus increasingly salient. This paper argues that it is also legally required.
Recently published industry studies demonstrate that accurate, specific, and actionable climate resilience planning is possible. Nevertheless, and despite the significant benefits of climate resilience planning, relatively few electric utilities have engaged in the process. This paper explores two legal doctrines, public utility law and tort law, which we argue obligate electric utilities to plan for the impacts of climate change on their assets and operations. Public utility law requires electric utilities to meet, among other things, prudent investment and reliability standards. Tort law establishes a duty of care that obligates electric utilities to, among other things, avoid foreseeable harm when performing acts that could injure others. We argue that, as climate science becomes more precise and predictive, these legal standards take on new meaning and require electric utilities to engage in climate resilience planning.
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