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Changes in the global climate may result in regional changes that might impact the physical or operational environment of an electric utility such as APS. According to the Intergovernmental Panel on Climate Change (IPCC), North America – including the United States- is projected to warm by about 2 to 13 degrees F by 2100. Other projections for the Southwest US from climate change models include an increase in the number of extreme hot days in the summer, less precipitation in the form of snow and the earlier runoff of snowmelt, increased wildfire potential, and the potential for increased water shortages.
However, there is a great deal of uncertainty in predicting climate changes, particularly for a specific region. The US EPA warns that “projections of climate change in specific areas are not forecasts but are reasonable examples of how the climate may change”.
Assuming that the primary physical and operational risks to APS from climate change are increased potential for drought or water shortage, and a mild to moderate increase in ambient temperature, we believe that we are taking the appropriate steps at this time to respond to these risks. Weather extremes in drought and high temperature variations are common occurrences in this Southwest United States desert area, and these are risk factors that we consider in the normal course of business in the engineering and construction of our electric system.
The National Electric Safety Code does not specify ambient temperatures to use, rather requires utilities to consider their local situation. APS would naturally have a higher ambient temperature than many other utilities, and engineers for higher ambient temperatures, including safety factors. APS typically assumes an ambient temperature of 120 degrees F as the starting point for determining what our materials need to be rated to. For overhead conductors, that assumption relates to a conductor temperature of 212 degrees F for determining the maximum amp rating for each conductor. Increased ambient temperature would reduce the amount of power a conductor or other material could carry before reaching its operating temperature. If climate change were to slightly increase the ambient temperature, then our materials should be fine as we build in safety factors when considering what temperature they will reach during heavy electricity usage times. Large increases in ambient temperature due to climate change might require evaluation of some materials and represents a greater challenge. These are important factors that we will continue to monitor in our resource planning and system maintenance processes.
Arizona is currently in a decade plus long period of drought, with no water supply impacts to our generating facilities. About 56% of the water used by APS owned generation comes from treated effluent from cities in the Metro Phoenix area - this is the water used by our Palo Verde Nuclear Generating Station and our Redhawk natural gas generating station. The majority of the remaining water comes from deep underground wells or on-site lakes at our power plants. Water use, source and long-term availability are criteria evaluated in our resource planning process for all new owned generation or contracts for purchased generation. Our goal is to minimize water use and insure the long term reliability of the water source. Our PNW Corporate Responsibility Report provides additional discussion on PNW water use and conservation.
Higher temperatures may decrease the snowpack, which might result in lowered soil moisture and an increased threat of forest fires that could threaten our communities and electric transmission lines. Arizona has seen an increase in forest fires with the current drought situation. We have responded to the threat in ways such as aggressively clearing our rights-of-ways to decrease fire danger to our lines.
In addition to design and engineering factors, APS prepares high temperature load forecasts that capture the possibility of experiencing more extreme temperatures than our "normal" peak day conditions. These high temperature load forecasts are then provided to our distribution system planners for use in their planning so that they know what their capacity requirements could be under such conditions.
The largest financial risks to APS from climate change are likely associated with the potential costs associated with climate change legislative and regulatory programs at the federal and state levels. Potential impacts of future carbon legislation is discussed as part of our Integrated Resource Plan.
To best manage these risks, APS will maintain an active legislative monitoring and intervention and will incorporate climate change issues into our Integrated Resource Planning process. Other components of our climate change program, including DSM, renewable energy and technology innovation, will also play significant roles in managing financial risks associated with climate change.
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