Can Power Grids Weather the Storms?

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.

Maui Tragedy

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.

Stormproof

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.

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