Keeping the Lights on During Superstorm Sandy: Climate Change Adaptation and the Resiliency Benefits of Distributed Generation

Abstract

Hurricane Sandy (ultimately downgraded Sandy by the time it hit the coasts of New York and New Jersey in late October 2012) was the most lethal and destructive hurricane in 2012, resulting in 285 deaths, $68 billion in damages, and 8.5 million customers in the eastern United States losing power. Superstorm Sandy provided a wake-up call for electric utilities on the need adopt a different set of long-term planning tools improve the resilience of the electric system against anticipated extreme weather events. The experience of Superstorm Sandy provides a case study of the system resiliency benefits of distributed generation (DG) resources and microgrids, and valuable lessons that can be learned as utilities plan for increasingly frequent extreme weather events of the future. This Article examines legal and regulatory tools available encourage electric utilities move in the direction of a DG-based model, and it focuses in particular on the Consolidated Edison Company of New York (Con Edison) rate proceeding in New York. In that recently concluded proceeding, regulators had an opportunity consider a approach proposed by the utility-featuring transmission and distribution infrastructure investments-alongside a competing view of a utility of the future offered by environmental parties, geared toward a more resilient system that integrates DG resources and microgrids. In a precedent-setting order issued by the New York State Public Service Commission (PSC) on February 21, 2014, the PSC required Con Edison make significant investments to enhance system reliability, achieve a higher level of storm hardening and resiliency in the face of anticipated climate change and sea level rise. Con Edison was directed take specific steps use DG resources as an alternative traditional infrastructure, facilitate DG installations in its service territory, and develop an implementation plan for microgrids in its service territory. More broadly, utilities in New York were directed integrate predicted impacts from climate change into their long-term system planning processes. The article also examines other legal theories that can be in regulatory proceedings move utilities toward a new paradigm that features DG resources, including the prudent investment standard, the doctrine of used and useful, and the requirement set cost-based rates.