Will Climate Change Cripple Utilities Financially?

It’s getting harder and harder to meet demand, to make sound investments and to keep the lights on.  Utilities were once a safe bet, but incidents brought on by climate change coupled with an aging infrastructure have financially devastated utilities like PG&E.  Now Hawaiian Electric faces multiple lawsuits in connection with Maui’s wildfires earlier this month. 

Truthfully, the residents impacted by these tragedies are the real victims.  However, numerous markets will face the long-term effects of disasters stirred by climate change.    Now, agriculture, insurance, and energy investments carry greater risk.  Some utilities are seeing rewards despite risks. 

In 2015, Green Mountain Power started a home battery and storage system using Tesla’s Powerwall.  The program was capped at 500 customers but the recent flooding in Vermont has increased demand.  “We were filling up the customers at the beginning of the year pretty quickly and then creating a waiting list,” said Josh Castonguay, the top innovation executive at the GMP, which serves 270,000 customers in Vermont. ​“Clearly the program is successful, it’s performing as we expect, and customers are looking for this.” 

In Colorado, Xcel Energy is also launching a virtual power plant for residents.  The Renewable Battery Connect scheme is open to its residential and business customers in the state and will provide $500 per kW of storage for up to 50 percent of the equipment cost of a solar-charged battery storage system.  The Brattle Group, an energy consultancy firm, found that US utilities could make up to US$35 billion in savings on their costs of supplying electricity over the next decade by leveraging virtual power plant (VPP) technology.  Will climate change cripple your utility financially? What are the rewards that outweigh the risks?