The power sector has long lacked a consistent approach to evaluating climate risk. Now, as extreme weather increasingly strains grids and renewables saturate the power system, climate change is prompting concerns about power deliverability.
Boards and regulators have begun asking utilities how they plan to address these potential risks; according to Morgan Scott, director of the Electric Power Research Institute’s Climate READi program, many have had to cobble together their own one-off analyses in response. Without a standard methodology, though, regulators often come back with questions about what exactly went into these analyses.
That’s the backdrop for EPRI’s 2022 creation of Climate READi, a utility initiative aimed at improving resiliency planning and operation — and most recently for the release of the group’s framework for assessing physical climate risk and response options.
The “compass” is a sweeping collection of roughly 20 documents, from how-to guides to reference documents, put together over nearly three years. The project, released last week, incorporates input from over 40 power companies, as well as members of the Climate READi affinity group: from academia, consulting, finance, and government, among others. Climate READi began with 14 anchor companies, but it has since grown substantially to include members from across the United States, as well as Canada, the United Kingdom, and France.
Even back in 2022, when the group was launched, the vast majority of literature on resiliency explained that “proactive investment costs less than what it takes to respond and repair after an event,” Scott said. And while proactive investment can be hard in a regulated environment like the utility space, investor interest in the “unavoidable opportunity” of adaptation is surging across all sectors; one recent report from the LSE Group found that more than 2,100 companies with products and services for climate adaptation generated a combined revenue of more than $1 trillion in 2024.
At the same time, though, the U.S. government is taking a step back from the kind of investment and research that could encourage the power sector and countless others to plan for disaster.
The Climate READi framework approach
There are four key components of the framework, as Scott defined it: “the hazard itself; the exposure of your assets to the hazard; the actual vulnerability associated with that exposure; and then your response.” Many of these are shared between utilities — but it’s the degree and intensity of the risk that changes how they can and should respond.
“At the end of the day, we all experience the same weather variables; it’s just that we experience them in different ways depending on where we are regionally,” Scott said, adding that each power company’s vulnerability will depend on “what assets they have [and] what investments have already been made.”
From the beginning of Climate READi, Scott said EPRI has found that the industry needs a step-by-step process for how to tackle the challenges posed by extreme weather, as well as certain new tools to fill analytical gaps, like an online asset vulnerability and adaptation database or an analytical risk tool to put climate data into the form needed for power system analysis.
Because the framework has incorporated such a wide variety of perspectives, the hope is that it is widely accepted by regulators, investors, and other stakeholders who need to know a power company’s true risk exposure.
“There are important questions around what the power system is going to look like moving forward,” Scott said. “And what the framework gives [utilities] is the process by which they can evaluate what is the environment that those assets might live in for the next 20, 30, 40, years, and how do we use that to inform whether there is a change that’s needed for existing assets, or whether you design and build new assets in a different way.”
The government’s abdication
In pitching Climate READi, Scott said she often uses the National Oceanic and Atmospheric Administration’s data on billion-dollar disasters, which illustrates how the number of those events is increasing year-to-year. The 2024 total, for instance, was 27 events; between 1980 and 2024, the average was 9 events.
As those numbers go up, Scott said, “we have a responsibility to think about how we plan the power system in a way that continues to reliably deliver power to customers.” And resilience, she added, is key to that effort.
However, that responsibility is complicated by the federal government’s step back on resiliency. According to the NOAA website, that billion-dollar-disaster data will no longer be updated going forward due to “evolving priorities, statutory mandates, and staffing changes” under the Trump administration.
And this is just one example of the kind of at-risk data that is so useful to utilities as extreme weather events get both more frequent and more intense. In February, NOAA was one of the first targets of Elon Musk and his Department of Government Efficiency; and in April, Trump’s budget proposed a 27% cut to the agency.
The nonpartisan scientific agency is in charge of research on the atmosphere and oceans, and the possibility of limiting that work has caused alarm throughout the climate and energy spaces. For instance, the climate resiliency planning platform Rhizome relies on NOAA projections, including for its work with utilities. As co-founder and CTO Rahul Dubey told Latitude Media in February, compromising those projections “will definitely have an impact on some serious decision-making” about future-proofing the grid.
