Are You Ready for Extreme Weather?

If you follow the events of the utility industry, then you are likely aware of the focus being placed on ERCOT and Texas-based utilities related to the February 2021 snowstorm event that caused days of power outages, billions of dollars in damage, and monumental regulatory scrutiny.

This headline news has caused many utilities to become more focused on being ready for similar types of cold weather events. Unfortunately, many are overlooking the broader question, “Are you ready for an extreme weather event?”  Extreme weather events can happen year-round.  Examples of other extreme weather events that you may want to consider include flash flooding, severe winds, extreme heat, extreme drought, etc.  Each of these extreme weather conditions may pose different risks to your organization’s operations and the ability to provide reliable service.

The NERC Reliability Standards were designed to support the reliable operation of the Bulk Electric System.  The NERC standards support reliability during normal and certain emergency situations.  For example, the NERC Standards include EOP (Emergency Operations) standards which require an Emergency Operations Plan and a backup Control Center; CIP (Critical Infrastructure Protection) standards which stipulate the requirements for recovery plans; COM (Communication) standards which require Alternative Interpersonal Communications; FAC (Facilities) which includes minimum clearance distances associated with vegetation and requirements regarding derivations of system limits and ratings; just to name a few.  However, it is important for utilities to stretch the concepts included in NERC standards beyond meeting specific compliance requirements to a more global application in order to prepare for extreme weather.

What used to be known as the 50-year floods in some areas of the country have now happened multiple times within a 3-to-5-year period; and record-breaking extreme temperatures have become the “new norm” across certain regions. Regardless of the reason, these extreme weather events are becoming more commonplace.  Accordingly, the importance of the question, “Are you ready for an extreme weather event?”  has become increasingly important and likely deserves a higher priority and more global consideration on your entity’s risk assessment than in the past.

Many of today’s utilities were founded in the late 1800’s and early 1900’s and it is inherent for organizations to develop processes and procedures and place them on “auto pilot.” Because these processes are placed on “auto pilot,” previous assumptions used in building and maintaining  facilities can be outdated.  For example, utilizing a 10-year or 20-year straight-line average for various trend data is a typical practice in the industry.  Straight-line averaging became a standard because it smoothed out anomalies over the trend period. However, it also assumes that the future will be similar to the past. It may be prudent to consider utilizing weighted averages, giving more weight to recent years.  A change of this nature would provide an “adjustment factor” to identify trends during the more recent years (e.g., last 5 to 10 years).

Some questions to consider when performing an extreme weather assessment may include:

Facilities

  • Where are our facilities located?
  • Can we timely reach them during an extreme weather event?
  • How long can we continue to reliably operate without reaching them?
  • Are we dependent on certain technology or resources that are environmentally sensitive (e.g., phones, internet, fuel, etc.) in order to operate our facilities reliably?
  • Are we dependent on a single source of technology or resources?
  • Are our facilities at a high enough elevation to withstand “new norm” flooding?
  • Can our poles and lines withstand “new norm” winds?
  • Can our facilities tolerate “new norm” temperatures (hot or cold)?

Procedure/Process Assumptions

  • When did we last review/change our assumptions?
  • Are there any new factors that should be considered in our assumptions?
  • Has there been a change in technology or resource availability that should be considered in our assumptions?

Operations

  • Do we have personnel with the appropriate skills to address “new norm” extreme events?
  • Have we updated training processes and procedures to include training on extreme weather events?
  • Have we performed extreme weather operational drills to test processes and procedures?
  • Do we have personnel in the right places to address extreme weather events?
  • Have we implemented and updated technology/resources to maintain reliable service throughout extreme weather events?
  • Do we have Mutual Aid and Emergency Assistance Support Agreements with other utilities?
  • Are our Mutual Aid and Emergency Assistance Support Agreements with the right utilities (i.e., utilities that will not be affected by the same extreme event)?
  • Will our Mutual Aid and Emergency Assistance Support Agreements provide the appropriate level of support during extreme weather events?

Regardless of where your organization may be located, it is critical that you perform an extreme weather assessment.  Performing this assessment and implementing measures to mitigate unfavorable findings now can increase your ability to provide reliable service to your customers, save you from being the headline story in the news, mitigate liabilities and negative press, and possibly eliminate you from being the focus of numerous regulatory investigations.



Author: Brian L. Pauling
Mr. Pauling is a successful business professional holding over 25 years of experience applying audit, ethics and compliance, financial, reporting and advisory techniques to enhance compliance, maximize financial performance and increase operational effectiveness and efficiency.

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