ORIGINAL REPORTING: Extreme weather, resilience, reliability, and no-regrets investments

As extreme weather spurs billions in utility resilience spending, regulators struggle to value investments; A new study by the National Renewable Energy Laboratory shows the value of resilience depends on too many factors to easily quantify and moves regulators back to human judgment.

Herman K. Trabish, April 25, 2020 (Utility Dive)

Editor’s note: At this moment, there is probably no issue of greater significance to most state power system regulators than resilience.

The clarity of hindsight has shown policymakers the value of investments against a pandemic or a Fukushima, but debates continue over extreme weather preparedness. Hurricane flooding in the East and South and wildfire mayhem in the West have taught electric utilities they must invest billions in resilience, but it is still not clear which investments are the best use of ratepayers' money.

"Measuring how well utilities are keeping the lights on and getting them back on when they go off is easier than the intellectual gymnastics of measuring the value of resilience for individual solutions," former Illinois Commerce Commission Chair Brien Sheahan told Utility Dive. "Policymakers and regulators need to be more proactive, but the challenge is still the cost against an event's likelihood."

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Utility proposals to regulators for resilience spending are growing, though their precise value and how they differ from traditional reliability investments is unclear, according to regulatory proceeding stakeholders. To settle debates about utility plans against specific threats, national lab researchers are working on a "value of resilience" metric that some say is urgently needed and others say is premature.

"Resilience is mentioned more and more in utilities' grid modernization proposals, but it often gets conflated with reliability," Autumn Proudlove, senior manager of policy research for the North Carolina Clean Energy Technology Center (NCCETC), told Utility Dive. Regulators tend to make the same mistake, often making "little or no distinction" between proposals for reliability and resilience, a 2017 Department of Energy (DOE) survey reported.

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"The term 'resilience' means the ability to prepare for and adapt to changing conditions and withstand and recover rapidly from disruptions," according to the Obama administration's Presidential Policy Directive 21. Reliability, on the other hand, is "maintaining the delivery of electric power" when there is "routine uncertainty in operating conditions," according to the DOE's Grid Modernization Laboratory Consortium.

But "resilience is closely related to reliability," the National Association of Regulatory Utility Commissioners (NARUC) acknowledged. A major distinction is that reliability is about preventing disruptions that are "more common, local, and smaller," and resilience "addresses high-impact events" that "can be geographically and temporally widespread," NARUC added. Another key distinction is in how reliability and resilience are measured, according to a 2017 DOE paper. Most regulators are familiar with reliability measurements like System Average Interruption Frequency Index (SAIFI) and System Average Interruption Duration Index (SAIDI) that show how well utilities keep the lights on and get them back on when they go out. But "any definition or metric that is based on measuring outage frequencies, times, extents, or impacts on customers or systems does not get at the essence of resilience," the paper added…” click here for more

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