In the first part of this three-part series, we explored how utilities face a worsening scenario as disasters of all types increase in both frequency and intensity, threatening the critical lifelines power utilities provide to their communities, and how a mutual aid network can make your network more resilient for the long-term. In this second installment, we introduce the many public funding vehicles available for utilities to prepare their network to prepare, withstand, and recover when disaster strikes.  

As explained in the first installment, there are three types of energy utilities in the United States and its Territories. These are not-for-profit electric utilities, also known as Public Owned Utilities (POUs), run by local governments. Additionally, there are Cooperatives Utilities (CO-OPs) and Investor-Owned Utilities (IOUs) operating in the U.S. The programs detailed in this article are available to all types of utilities.

Addressing Issues and Struggles Through Mitigation

The public, private, and non-profit sectors annually spend billions of dollars to fund mitigation planning and activities that avoid, reduce, or transfer these natural hazard risks. Studies have shown that such mitigation investments can be effective and cost efficient. For example, FEMA Hazard Mitigation Experts found that for every $1 spent on mitigation strategies there is a $6 reduction in future events/disaster costs.

The costs and dangers posed by natural hazards, along with the importance of mitigation, should drive the U.S. towards a more coordinated, integrated approach to mitigation investments. As a result, mitigation investments made by the federal government, state, local, territorial, and tribal entities (SLTTs), as well as by private and non-profit sector entities (such as businesses, philanthropies, foundations, universities, and other non-governmental organizations), would be more effective and efficient.

Leveraging Public Funding and Assistance

In 2018, Congress passed a law to reform disaster recovery activities by the federal government increase focus on resiliency. A few sections of the law directly relate to increasing utility resiliency:

• Eligible Wildfire Activities (Section 1205): Authorizes FEMA to aid under its Hazard Mitigation Grant Program and Pre-Disaster Mitigation program for activities related to wildfire and windstorm disaster mitigation. These activities range from reseeding damaged groundcover with native species to installing utility poles that are resilient to extreme winds.
• Code Implementation and Enforcement (Section 1206): Authorizes FEMA to help state and local governments for building code and floodplain management ordinance administration and enforcement.
• Prioritization of Facilities (Section 1208):Requires FEMA to develop guidance and annual training for state, local, tribal, and territorial governments, first responders and utility companies. The guidance will highlight the prioritization of power restoration for hospitals and nursing homes and the need to coordinate response plans before power outages occur.
• National Public Infrastructure Pre-Disaster Hazard Mitigation (Section 1234):Authorizes the National Public Infrastructure Pre-Disaster Mitigation fund, which will be funded through six percent of estimated disaster grant expenditures from the Disaster Relief Fund as a set aside. This allows for a greater investment in mitigation before a disaster. This new program is named Building Resilient Infrastructure and Communities (BRIC).

Climate change could burden utilities with substantial costs above and beyond the damage caused by a particular event. In some jurisdictions, utilities can be held re­sponsible for lost economic output caused by power outages. These assessments are, of course, ultimately borne by consumers in the form of higher rates. A decade after Hurricane Katrina, Gulf Coast consumers were still paying storm damage charges.

Given their capabilities and knowledge, regulators are well positioned to work with utilities to help them make cost-effective investments in resiliency. Regulators can incentivize utilities to develop climate-adaptation plans that protect and upgrade their infrastructure. They can design liability structures that encourage utilities to take preventive actions by shifting the liability burden if specific measures are taken. And they can encourage experimen­tation and forward thinking. Regulators will have to define their priorities based on their specific circumstances, such as the state of their grid and generating system.

An example of resiliency-oriented regula­tion comes from Florida. Since 2006, the Florida Public Service Commission has required investor-owned power utilities to devise three-year storm-protection plans. The commission has also required utilities to implement aggressive vegetation man­agement and an inspection program with an eight-year life cycle for wooden poles. Some utilities have replaced those poles with concrete structures designed to withstand 140 mile-per-hour winds.

Available Funding Sources for Building Resiliency to Utility Infrastructure

• Department of Homeland Security
• Federal Emergency Management Agency
• Department of Energy
• USDA
• USACE
• HUD
  • CDBG-DR
  • CDBG MIT
• State Programs
  • Resiliency Programs
  • Climate Change
  • Going Green Programs

FEMA funding is authorized through the Robert T. Stafford Disaster Relief and the Emergency Assistance Act Public Law 93-288.  The Act is amended when the magnitude of incident or threatened incident exceeds the affected State, Indian Tribal, and local government capabilities to respond or recover. 44 C.F.R. § 206.2(a)(16) further defines local governments to include counties, municipalities, cities, towns, townships, local public authorities, school districts, special districts established under State law, intrastate districts, councils of governments (regardless of whether the council of governments is incorporated as a nonprofit corporation under State law), regional or interstate government entities, agencies or instrumentalities of a local government, State-recognized tribes, rural communities, unincorporated towns or villages, or other public entities, for which an application for assistance is made by a State or political subdivision of a State.

• Sources of Available Funding through FEMA Programs Pre-disaster Mitigation Grants (PDM):
  • The application process requires the grantee to complete hazard mitigation planning.
    • Utility Protection and Infrastructure Retrofit
    • Resiliency Studies and Planning
  • Public Assistance (PA)
    • Funding is made available after a presidential disaster declaration.
    • Includes reimbursement for repairs/mitigation of public infrastructure.
      • Emergency Preparations
      • Emergency Restorations
      • Permanent Repairs
      • Codes and Standards Development
      • Mitigation Activities for Storm Hardening
    • FEMA HMA 404 Mitigation
      • The 404 Funding is used to provide protection to undamaged parts of facilities or to prevent /reduce damage caused by future events.
      • This is a competitive grant.
      • Must provide long-term solution to a problem.
        • Strengthening systems
          • Overhead construction
          • Narrow profiling
          • Underground construction
          • Resilient alternative solutions
          • Vegetation Management
          • Elevating substations and equipment
        • HUD CDBG-DR and CDBG- MIT
          • Repairs and upgrade Electrical Power Grid
          • Solarization
          • Energy Resilience Investments
          • Mitigation Activities to Harden Systems
        • USDA Rural Utility Services Electric Program
          • Supports rural electric utilities in improving infrastructure.
          • Aims to enhance reliability, resilience, and efficiency in rural areas.

FEMA’s determination of eligible utilities to receive FEMA funds are:

• Power Generation
• Transmission and Distribution Systems
  • Substations
  • Overhead and Underground Powerlines
  • Solar Systems
  • Wind Turbines
• Natural Gas Transmission and Distribution
• Sewer and Wastewater Collection, Transmission and Treatment Plants/Systems
• Communication Systems; transmission and switching, and distribution of telecommunications traffic.
• Irrigation to provide Water for Drinking Water Supply, Fire Suppression or Electric Generation
• Water Treatment, Transmission, and Distribution by Water Company Supplying Municipal Water

No matter what type of utility nor the type of community served, Federal and SLTT funding sources are available to help your utility plan for, mitigate against, and recovery from any type of disaster, whether natural or man-made. For help navigating the funding landscape and to find what vehicles and sources are best suited for your specific needs, we encourage you to seek the support of a qualified and experienced resiliency and recovery management partner—this investment will pay for itself many times over and help your community weather the next storm.

Hill International Director of Public Assistance Martin Altman has more than 35 years of leadership and emergency management experience, including nine years serving with the FEMA.

He has managed and implemented disaster planning and recovery program management for public and private sector clients. Martin served as the FEMA Region VII Project Officer and Closeout Specialist for Kansas City, MO, and was then appointed the FEMA Public Assistance Infrastructure Branch Director for the Florida Long Term Recovery Office, where he managed the FEMA Public Assistance Program.