Lightning Strikes the Balance Sheet
Power companies and grid operators face a precarious landscape — financially and physically.
As natural disasters and weather grow increasingly extreme, so do the costs of maintaining service under varying conditions. From windstorms to wildfires, nature is putting the operational and financial stability of these utility companies to the test.
The tragic Maui wildfires are the latest spotlight on the danger of extreme weather to humans, animals, towns and their surroundings.
Hawaiian Electric Industries (HEI) has been widely criticized for mismanaging and even amplifying the crisis. Threats of a class-action lawsuit have further dented the company’s stock value.
The convergence of a warming climate and decades of underinvestment in electrical grids is steering utility companies into uncharted territory. The tragic Maui fires are a warning sign for the climate risk facing people, governments and companies around the globe.
The utility industry is showing alarming cracks in its foundation.
In addition to fires, power companies must contend with a heightened risk of other natural disasters, such as floods. Making matters worse, the average gas plant is four decades old. Hydroelectric plants are even older — more than 60 years on average. These pressures have led to bankruptcy for Texas’ Brazos Electric Power Cooperative in 2021 and California’s PG&E in 2019.
Ultimately, your power bill could hinge on how tightly these companies batten down the hatches. But an unreliable grid is another, and arguably worse, possibility.
Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.