Adapting to Climate Change: A Risk Management Guide For Utilities

The unavoidable impacts associated with climate change and weather extremes have the potential to adversely affect infrastructure, including electricity infrastructure. It is thus imperative that organizations in the business of generating electricity have the tools and resources they need to effectively anticipate, plan for, and respond to climate-related risks.

The Canadian Electricity Association’s (CEA) Sustainable Electricity Program™ Public Advisory Panel identified the need for active climate change adaptation management planning across the sector. CEA has taken the lead on the development of a template to provide consistency and guidance for member companies as they develop these plans.

Some in the legal community warn that “those who are responsible for the safe and effective management of our electrical systems will be expected to exercise reasonable care in preparing for and responding to these [climate change and extreme weather] hazards.” The need for proactive climate change risk management is a business imperative.

The purpose of this guidance document is to support the creation of practical, useful climate change adaptation management plans and to ensure a consistent approach across the sector. This risk-based framework will define the characteristics and key considerations of adaptation planning. It will take an approach similar to the International Organization for Standardization’s (ISO) management system standards by providing a framework that allows users to flesh out the details in a utility-specific manner.

This document outlines a strategic, risk-based framework that can be readily incorporated into existing enterprise risk management (ERM) processes. In the absence of ERM processes, it supports the creation of an adaptation-management process.

Characteristics, criteria, and key considerations of adaptation are defined. The approach includes tools for better understanding the impacts of climate change and identifying adaptation elements.

The framework is not intended to be an exhaustive treatment of the subject, but to instead provide an outline of management characteristics illustrated by some implementation suggestions. It is not intended to be prescriptive but rather is meant to stimulate critical thinking on the part of utility practitioners. It recognizes the fact that each utility’s suite of and appetite for risk(s) is unique and that management strategies will vary accordingly. Management plans need to be tailored to utility-specific circumstances, like the approach currently used in ISO frameworks.