United States Electric Utility Adaptation to Natural Disasters and Green Power Mandates

Abstract

Abstract Access to electricity is a crucial determinant of quality of life and productivity. The United States has a highly reliable electricity grid, but it faces new resilience challenges posed by more intense natural disasters and ambitious green power requirements. Over the past decade, utilities have faced a tradeoff between achieving local carbon mitigation goals and offering reliable power access. Using a generator panel dataset from 2013 to 2022, we document that electricity generation from renewables declines during extreme weather events. Based on an electric utility panel dataset over the same period, we find that natural disasters disrupt electricity distribution, but transmission lines are resilient to such shocks. Utilities have made some adaptation progress over time. The higher costs of supplying reliable green power are associated with higher retail electricity prices.