On May 7, 2019, the California Public Utilities Commission issued an Order Instituting Rulemaking to consider strategies and guidance for climate change adaption. The broad scope of this rulemaking is intended to ensure that the investor-owned public utilities take proper steps to ensure safety and reliability at a time where the impacts of climate change continue to worsen.

Phase 1 of the rulemaking is aimed only at the electric and gas utilities, but subsequent phases will deal with water and telecommunication utilities as well.

The potential ramifications of the rulemaking are significant, as it could result in the CPUC focusing on climate change adaptations in every proceeding in a manner similar to the way in which the CPUC has sought to have an increasedsafety and risk focus. The California Governor, Legislature, and the CPUC have already made climate change a significant focusfor the State, but this rulemaking seems to suggest that there is further need to 1) systematically look at the vulnerabilities that each utility faces and 2) give the CPUC oversight over how individual utilities plan and incorporate adaptation strategies into their operations.

Since the CPUC has to approve significant future infrastructure investments that are part of climate change adaptation strategies based on forecasts of future climate change, this rulemaking is sure to be a battlefield as the outcomes will result in significant monetary and rate consequences. Moreoever, this rulemaking is the CPUC’s ambitious attempt to create a shared understanding/definition of climate change adaptation and establish shared tools for climate change assessment and forecasting. Policies adopted in this rulemaking will likely be utilized not only at the CPUC but in other jurisdictions all across the world. But the reality is that this proceeding is likely to devolve into a war of modeling assumptions and among climate change experts.

My guess is that the consistency the CPUC hopes to create when addressing climate change adaptation and in making real-world investment decisions may be too difficult to achieve in a cumbersome rulemaking. And maybe that’s OK. At the very least, the discussion that this rulemaking will generate should aid the general effort to understand climate change, its impact on the State, and actions the utilities can take to combat such impacts.

Comments on the OIR are due by Wednesday, June 6. We expect participation from a wide variety of stakeholders. Any stakeholders interested in commenting are invited to reach out to a DWT energy attorney.