Investing in Adaptation and Resilience for Utilities

This report presents a detailed analysis of how US utilities are addressing physical climate risk through significant investments in adaptation and resilience. It outlines the current structural investment cycle, highlighting that US utilities invested approximately US$30 billion in resilience and grid-hardening capital expenditures in 2024, reflecting an 8% annual increase. The report examines the operational resilience metrics that distinguish successful utilities from those that are less effective in managing climate risks. It emphasizes the shift in capital deployment strategies, moving from reactive to proactive measures aimed at enhancing infrastructure resilience against extreme weather events. The document also discusses the regulatory frameworks that govern utility investments in resilience, detailing the increasing formalization of climate-specific planning requirements. Furthermore, it provides case studies of major utilities, illustrating their unique challenges and strategic responses to climate-related threats, ultimately underscoring the importance of adaptation capital in ensuring long-term operational stability and financial performance.