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Climate risks and impacts for the regional utility sector: results of a collaborative research process with Tucson Electric Power | CLIMAS

Climate risks and impacts for the regional utility sector: results of a collaborative research process with Tucson Electric Power

TitleClimate risks and impacts for the regional utility sector: results of a collaborative research process with Tucson Electric Power
Publication TypeReport
Year of Publication2017
AuthorsGerlak, AK, McMahan, B
Date Published10/2017

The Arizona Business Resilience Initiative (ABRI) was launched at the University of Arizona (UA) in 2015 with the aim to develop a methodology to collaborate with business entities to learn from and contribute to ongoing efforts targeted at assessing opportunities and managing risks to their operations, especially those associated with climate change and variability. As an initiative of the Vice President of Research, Kimberly Andrews Espy, ABRI applies university resources and expertise to develop a replicable framework and robust process. It aims to enhance businesses’ ability to react and adapt to specific climate risks and also improve the private sector’s resilience to anticipated environmental and social changes more generally.

Over an 18-month period, from spring 2015 to winter 2016, researchers at the UA worked in collaboration with partners at Tucson Electric Power (TEP), Tucson’s local electrical utility, to develop and pilot an innovative qualitative risk assessment process. Throughout the course of the initiative, more than a dozen researchers at the UA worked to gather, interpret, and synthesize information regarding the current state of the climate in relation to TEP decision-making, and to develop and inform plausible future scenarios for TEP’s planning purposes, especially their Integrated Resources Plan (IRP) process.

The ABRI process was focused on climate and environmental risk areas that TEP identified as key concerns for electrical utilities operating in the arid Southwest, where extreme temperatures, drought, and climate variability all affect planning and decision-making. These four risk areas include: Heat, Wildfire, Water, and Air. UA and TEP followed an iterative process characterized by a series of exchanges of knowledge and information regarding risk areas, scope of data, and gaps and needs. The initiative was built upon the collaborative process of co-discovery ignited by an exploration of existing scientific knowledge and TEP experience.

Within the four risk areas, the UA teams worked with TEP to identify their key concerns, data and information that would further aid in decision making and planning, and recommendations for future actions that would help TEP plan for present and future climate and environmental risks. The Heat team focused on the role of a changing climate on peak load and seasonal market demand, as well as wear and longevity of infrastructure. The Wildfire team emphasized the high impact but low probability risks of extreme wildfire (to specific infrastructure), as well as the larger and more general threat that increased fire risk and changing fire seasonality might pose. The Water team focused on the role of drought and water availability, as well as how future energy utility portfolio decisions might (or might not) be subject to competition over water resources. The Air team emphasized regulatory and policy questions about location and concentration of pollutants, and the role that changes to federal regulatory frameworks might play in decision making regarding air quality and the location of generating stations.

Researchers then explored a network of interrelated effects to understand the widest range of possible connections and outcomes that overlap within this system, and have the potential to amplify the cluster specific impacts, especially given current climatic trends. This process of synthesizing risks that span the topical clusters helped identify possible trade-offs between managing and adapting to the four distinct risks, and can be used to plan, understand past events, and anticipate future events. The overlapping management concerns related to interactions between the key risk areas and the management implications for these overlapping concerns for TEP.

The analysis of cascades and network effects reveals the interconnected nature of the four risk areas, and the difficulty of managing these complex relationships. Interventions that target critical pathways in the chain of events, are ideal candidates for intervention, particularly those with increased likelihood of producing negative impacts (e.g. fuel load reduction along major transmission lines, planning for changes to summertime seasonal peak load and regional market demand, or moving away from water intensive coal fired generation that is likely to see additional regulatory limits in the future to renewables and natural gas). By identifying high impact risks within our assessment, and by establishing frameworks wherein additional monitoring and analysis can assess which impacts are most likely – as standalone events, or as part of a chain of events – these analyses of cascades and network effects demonstrate a process by which a holistic assessment framework could be further developed and employed by TEP, or by other Arizona businesses.

Within each of the four risks, we identify recommendations, including recommendations for further research as well as recommended risk mitigation and adaptation actions.