Critical infrastructure hardening: Who should pay and how much?

Posted on June 1, 2013  /  0 Comments

LIRNEasia works on infrastructure policy and regulation. It also has expertise in disaster risk reduction. That means that we have a natural interest in critical infrastructure issues. This is an area I had published in, even before LIRNEasia came into being. The subject was on assigning responsibility for risk reduction by regulators.

When Hurricane Sandy hit Manhattan, people appreciated the vulnerability of critical infrastructures. Now it appears that action is being taken. But of course, someone has to pay. Who?

Before another big tropical storm can surge into the Consolidated Edison substations that were flooded by Hurricane Sandy, it will have to breach a mile of concrete walls and steel gates.

Con Edison, the electric utility that serves New York City and some northern suburbs, has been racing to meet a deadline of June 1 — the start of the hurricane season — to protect its network of equipment against flooding and storms. On Tuesday, its chief executive, Kevin Burke, showed off some of the improvements that are part of the company’s plan to spend $1 billion to harden the system.

“We have a lot more work to do,” Mr. Burke said, standing in a light drizzle at a large substation near the East River in Downtown Manhattan.

Little if any of that work will be financed by the federal government, he said, but the company hopes it will be paid by customers. Con Edison is asking state regulators to allow it to charge $1 billion in storm-related improvements to ratepayers over four years.

Full report.

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