- The destruction wrought by Hurricane Harvey has forced utilities in the Gulf Coast region to spend around $520 million to repair the damage and improve resiliency to guard against future storms, according to a new analysis done by S&P Global.
- According to NOAA, there were 16 weather events in the United States last year that individually caused $1 billion or more in damage. Collectively, natural disasters cost $306 billion in 2017, topping the previous record of $215 billion in 2005.
- Three of the five most expensive storms in U.S. history struck last year, according to the U.S. National Oceanic and Atmospheric Administration (NOAA): Harvey, Maria and Irma caused more than $250 billion in total damage.
Utilities and their customers are shouldering the increasing cost of hurricanes and other natural disasters.
It took about a year to restore power to all residents, but fully rebuilding and modernizing Puerto Rico is expected to be a more laborious process. Navigant Consulting and the Puerto Rico Energy Resiliency Working Group concluded it would cost $17.6 billion to build a more distributed and renewable grid.
More than 60% of Florida electric customers lost power at some point during Hurricane Irma last year. Duke Energy Florida subsequently filed a petition with state regulators to recover an estimated $381 million in costs associated with the September storm. Tampa Electric filed to recover of $88 million to restore power after Irma and several previous storms.
S&P's estimates of utility costs from Hurricane Harvey put the bulk of the damage in AEP Texas' territory. The firm says the utility has requested state regulators sign off on almost $380 million in storm-related costs.
On the west coast, where California is battling deadly wildfires and liability rules put much of the responsibility on utilities: Pacific Gas & Electric (PG&E) faces $1.59 billion in wildfire costs in the second quarter of 2018.
The state's "inverse condemnation" law potentially puts utilities on the hook for all costs related to fires if their equipment is found to have played a role in starting it — even if there was no negligence.
While lawmakers have declined to pursue changes to the state's liability rules in this legislative session, this week a bicameral committee released a draft regarding the vulnerability of investor-owned utilities to wildfire damage. PG&E has floated the idea of bankruptcy or restructuring as a result of possible wildfire liability.