New York’s Con Edison to Take New Measures Protecting Against the Effects of Climate Change

By: Elizabeth B. Stein, Attorney and Adam Peltz, Attorney

Source: Iwan Baan

Source: Iwan Baan

The New York State Public Service Commission (Commission) took a historic step late last week, unanimously approving an Order that requires Con Edison to implement state-of-the-art measures to plan for and protect its electric, gas, and steam systems from the effects of climate change. This announcement regarding the future of New York State’s largest utility comes as a welcome coda to local storm recovery and resiliency efforts that have been in the works for some time now.

On October 29, 2012, Superstorm Sandy clobbered the coastline of New York City. Homes were swept away or badly damaged as corrosive salt water flooded basements, while millions lost power. In one of the enduring images of the storm, an exploding transformer at East 14th Street caused the “city that never sleeps” to go dark below 40th Street and stay that way for the better part of a week.

The ferocity of the storm’s attack startled many of us, but for those with knowledge of the region’s infrastructure, the devastation came as less of a surprise. In 2005, Hurricane Katrina had been an enormous wake-up call to vulnerable coastal cities, and the next year New York City unveiled new emergency plans to prepare the City for the event of a Category 3 hurricane, as described in the landmark 2007 PlaNYC 2030 report. This report also called for a forward-looking plan to deal with climate change that would include updated flood maps and upgraded building codes to prepare for extreme weather events. The City’s efforts bore fruit when Sandy actually hit and a post-mortem analysis showed the situation could have been far worse.

Con Edison, the utility that provides electricity to New York City and Westchester County and natural gas to portions of that footprint, had also been planning for better storm readiness for many years before Superstorm Sandy. Having learned key lessons from Hurricane Katrina, Con Edison had been moving in the direction of waterproof equipment for years. The utility had also discovered an alarming trend of increasing storm-related service disruptions in its own service territory; as of January 2013, when the rate case was initiated, four of the five worst storms to interrupt service to Con Edison’s customers had occurred in the preceding two and a half years.

Thus, when Con Edison brought a major rate case less than three months after Sandy, it came prepared with a rigorous storm-hardening plan, parts of which had been years in the making. But it was clear that the utility needed to do more than “harden” the existing system, and that it needed to account not just for storms but for other facets of climate change as well. In the rate case, EDF, the Columbia Law School Center for Climate Change Law (Columbia), Natural Resources Defense Council (NRDC), and the Pace Energy and Climate Center (Pace), among others, joined together in urging Con Edison to modernize its system and operations in ways that transcend traditional storm-hardening.

EDF and other parties argued for the electric grid to become less centralized and more flexible. We also called upon Con Edison to change how it charges customers for electric service by introducing more sophisticated electricity pricing structures based on the time electricity is used. This greater flexibility would furnish a greater range of options for dealing with system stresses, not only in storms but in other situations such as heat waves. The rate case was informed by Columbia’s focus on the most up-to-date climate science and what that means for grid design. EDF and other parties also sounded a cautionary note on natural gas, calling for methane leakage reduction.

While the rate case was underway, and on the recommendation of Department of Public Service (DPS) Staff, Con Edison convened a Storm Hardening and Resiliency Collaborative. This Collaborative gave rate case parties an additional forum to examine the utility’s storm hardening plans while addressing other facets of resiliency as well. In addition to detailed examination of Con Edison’s proposed storm hardening measures, the Collaborative emerged as a forum where alternative resiliency strategies, methane leakage reduction, and cost-benefit methodologies for storm-hardening and resiliency measures could be more fully developed.

Over the course of the rate case, Con Edison rose to these challenges. The settlement that the Commission endorsed on February 20 includes progress toward many of the initiatives supported by EDF and other environmental organizations. Importantly, the settlement agreement also called for the continuation of the groundbreaking Collaborative, paving the way for Con Edison to emerge as a standard-bearer for utility planning in the face of climate change.

In our next blog post, we will discuss some highlights of the 300+ page final Order posted by the Commission last Friday, February 21st, and how those aspects of the Order advance clean energy and resiliency in New York.

This entry was posted in Clean Energy, Climate, Demand Response, Electricity Pricing, Energy Efficiency, Energy Financing, New York, Smart Grid, Utility Business Models. Bookmark the permalink. Both comments and trackbacks are currently closed.
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