The Cost of Inaction: Why T&D Utilities Must Protect Themselves Against Intensifying Weather Risks

As extreme weather events increase in both frequency and severity across the U.S., T&D utilities are under growing pressure to protect their infrastructure from hurricanes, wildfires, snow storms and prolonged heat waves. These events are no longer isolated, and they bring extensive damage to powerlines and lead to prolonged outages, impacting entire regions. The mounting financial and operational risks have also drawn heightened attention from insurers, who are reevaluating their coverage terms and liability thresholds. Without comprehensive mitigation plans in place, utilities may face serious financial repercussions beyond infrastructure repairs. For utilities, this means that claims for extreme weather-related damages might go unpaid if they lack adequate preparation measures, exposing them to potentially bankrupting costs.

As extreme weather becomes a persistent reality, from hurricanes to tornados and droughts to wildfires, these proactive steps are no longer just operational improvements but vital investments in long term financial security. By understanding these high stakes, utilities can protect their assets and better position themselves to maintain service continuity and avoid the growing liabilities tied to today’s climate challenges.

Doing nothing costs more

Utilities that fail to adapt to the intensifying impacts of extreme weather are finding themselves at the center of costly financial and legal storms. High-profile cases have set a precedent for courts to hold utilities accountable for damages stemming from inadequate risk mitigation measures. The traditional defense of ignorance—no longer holds up. Increasingly, courts are ruling that utilities "should have known" about these vulnerabilities, placing a heightened burden of responsibility on providers.

Furthermore, government bodies are increasingly clamping down on reliability levels for customers. For example, in Michigan, the local Public Service Commission is planning a regulation which could see investor-fined owned utilities as much as $10 million a year if they fail to meet reliability benchmarks, like the amount of time residents are without power, or the time it takes to restore service.

Compounding these issues is the challenge of outdated systems. Many utilities still rely on paper maps, static records or fragmented data systems to monitor their networks. Such inefficiencies leave utilities ill-equipped to respond to crises promptly. The absence of a digital inventory hinders their ability to quickly locate damages or allocate resources effectively during extreme weather events and power outages. This delay not only prolongs outages but also drives up operational costs and reduces customer satisfaction, which, in some states, can also lead to fines. One such example in 2024 saw Texans affected by Hurricane Beryl turn to the Whataburger app to track power outages in their areas after the live map from one of the state’s largest electric companies went down. The fast-food chain’s app provides real-time updates on location closures, so customers could easily see which areas of the state had restored power.

The insurance landscape is also shifting in response to these challenges. With many utilities self-insured up to significant thresholds, they bear the brunt of financial losses when disasters strike.

On top of crisis preparedness, utilities may unknowingly miss opportunities for revenue in their everyday operations. For instance, inaccurate asset records mean utilities can fail to bill telecommunication companies for pole attachments or overpay property taxes on T&D infrastructure that does not exist.

Outsmarting the elements

The path to resilience begins with one simple principle: know your network. Utilities must create an accurate, digital inventory of their assets. By using technologies like satellite imagery, drones and weather data, utilities can build a clear, real-time picture of their infrastructure and the risks it faces.

With many assets on the network approaching and passing middle aged, maps developed when they were first built are no longer sufficient. A utilities’ blueprint from the construction stage often doesn’t paint an accurate picture of what stands today. Perhaps a pole was actually erected on the opposite side of the street than planned or workers needed 10 pylons to support cabling when plans state only 8, inaccurate records are all too common, and without a digital picture, utilities just don’t have the foundation to act quickly and decisively when crisis hits.

Vegetation management is another key area where action matters. Encroaching trees are one of the leading causes of outages during storms, but with targeted management based on predictive analytics, utilities can dramatically reduce these risks. But if utilities don’t know what trees are where, or even where the asset is to begin with, they can’t even begin to respond.

Innovating for preparedness

The utility sector is at a turning point, where technology is transforming what’s possible in managing extreme weather risks. Solutions like digital twins and AI-powered predictive analytics are shifting utilities from a reactive to a proactive approach. By integrating real-time monitoring with data-driven insights, utilities can not only respond faster but also prevent outages before they happen. AI platforms are already making a difference. These systems analyze vast amounts of data to detect and assess infrastructure vulnerabilities, from cracks in poles to corrosion on wires. By automating these processes, utilities can focus their human resources on

solving complex problems rather than routine inspections. The result is a faster, more cost-efficient way to manage assets that also satisfies customers, insurers and regulators who are looking for demonstrable improvements.

Looking ahead, utilities must also prepare for the evolving grid. Decentralized renewable power generation, is reshaping how electricity is delivered. These systems introduce new complexities, but with the right tools, utilities can seamlessly integrate renewable sources while maintaining reliability and resilience.

Where there’s a blame there’s a claim – or is there?

The stakes for utilities are higher than ever. Inaction in the face of intensifying weather risks is no longer an option—it’s a liability. The financial, operational, and reputational costs of unpreparedness are climbing, and utilities that fail to modernize risk falling behind.

The time to act is now. With extreme weather becoming the norm, resilience isn’t just a strategy—it’s a necessity. By adopting a proactive digital approach, utilities can protect their assets, secure their finances, and deliver the reliable service their customers depend on.

For T&D utilities ready to take the first step, the rewards far outweigh the risks.