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Technology Chairman’s Message Introduction and TCFD Framework Transition Analysis Just Transition.
Physical Risks and Opportunities
analysis to characterize risks in terms of cost, time, injuries/illnesses or fatalities, system downtime, decreases in revenue, loss of customers, or fines and penalties.
PRECIPITATION ANALYSIS.
Throughout our history as a company, extreme precipitation events have often had operational impacts to AEP facilities and infrastructure. From hurricanes and heavy rainfall of short or long duration to heavy snowfall and ice, there are slight but noticeable changes occurring in our service territory.
We conducted an analysis of heavy rain events at six AEP coal-generating plants, split between our eastern and western service territory, using 1960 rain event maps and comparing them to newer 2014 National Oceanic Atmospheric Administration (NOAA) maps. The comparisons were based on intervals of five, 10 and 25 years, as well as hour duration (24- and 12-hour) precipitation events. The results demonstrate increased heavy precipitation events, some of which coincided with hurricane activity in the Southwest over the past several years. This shows that subtle changes are occurring over time and that the extremes — like Hurricanes Harvey and Laura — are becoming more intense.
In response, several states are taking a new look at how they plan for flooding events. For example, Arkansas, Oklahoma, Louisiana and Mississippi updated their flood design criteria in 2019 following historic floods in those states. In addition, Texas is expected to initiate regional flood planning groups similar to the regional water planning groups that have been in place in other parts of the country since the late 1990s. This is in direct response to the impacts on the state from Hurricane Harvey in 2017 and Tropical Storm Imelda in 2019.
In 2020, AEP Transmission conducted an informal assessment of climate impacts to the transmission network. That assessment identified regional variations in the predicted precipitation rates expected by 2050. For example, while the eastern part of the AEP system (PJM Region) is expected to see an increase in annual precipitation, portions of the western part of AEP’s system (SPP and ERCOT Regions) may see a decrease in annual precipitation that could increase the risk of wildfires and drought.
Increased precipitation threatens flooding of substations, as we have seen in multiple states in recent years. In addition, water can affect the wires business in a less direct way. High levels of precipitation can saturate soil and lead to erosion and soil slippage on steep slopes, which can compromise the integrity of the foundations and positioning of transmission and distribution support structures. Excessive rainfall also causes vegetation to grow faster, creating significant reliability concerns.
Heavy rain events that saturate the ground also can result in landslides and mudslides, especially in mountainous terrain, that can undermine electric facilities. According to the U.S. Geological Survey, the type, severity and frequency of landslides varies by location and is dependent on terrain, geology, and climate. USGS data show a high incidence of landslides that affect Appalachian Power Company, whose service territory is mountainous.
Next steps for continuing this work may include the evaluation of individual or groups of assets for key risks in selected regions. Those facilities with vulnerabilities may be further evaluated using a quantitative risk analysis to characterize risks in terms of cost, time, 59 AEP’s Climate Impact Analysis.
Flooding of substations can affect the power transformer’s secondary oil containment system, risking an oil spill.
Technology Chairman’s Message Introduction and TCFD Framework Transition Analysis Just Transition.
Physical Risks and Opportunities
70°W 80°W 90°W 100°W 110°W 120°W 130°W 40°N 40°N 30°N 30°N 20°N 20°N.
HIGH.
HIGH-MOD.
MOD.
MOD-HIGH.
MOD-LOW 0 500 1,000 KM 250 LOW.
USGS landslide overview map of the conterminous USA, showing areas of high, moderate, and low landslide susceptibility and/or incidence listed from highest to lowest, such that HIGH, high incidence; HIGH-MOD, moderate susceptibility, high incidence; MOD, moderate incidence; MODHIGH, high susceptibility, moderate incidence; MOD-LOW, low susceptibility, moderate incidence; and LOW, low incidence (after Radbruch-Hall et al. 1982; Godt and Radbruch-Hall, 1997)."
This USGS landslide overview map of the conterminous U.S. shows areas of high, moderate, and low landslide susceptibility. The dark shaded areas in the east show the potential risk for this affecting portions of Appalachian Power.
Company and AEP Ohio. Image courtesy of the U.S. Geologic Service.
Landslide Overview Map of the Conterminous United States Water that goes over the spillway is water that cannot be used to produce electricity. Additionally, high water conditions downstream of the dam reduce the output of these facilities. AEP has specific permit requirements and procedures for managing water levels upstream and downstream of its dams. However, these facilities were not designed to be flood control projects.
Weather forecasting and water elevation management also are critical at our Smith Mountain Pumped Storage facility in central Virginia. This facility consists of an upper reservoir, Smith Mountain Lake, and a lower reservoir, Leesville Lake. While the two dams that created the reservoirs are both able to generate electricity, AEP is also able to pump water from Leesville Lake back up into Smith Mountain Lake when demand for electricity is low so the water may be reused when demand is higher. The system acts like a giant battery that can be discharged and recharged when needed.
Smith Mountain Lake is a very large body of water with more than 500 miles of shoreline and is a popular recreation spot for swimming, fishing and boating. As development around the lake’s shores has grown through the years, the potential impact of water level fluctuations has become more pronounced. These fluctuations affect shoreline use and recreation on the water. Appalachian Power Company, which operates the Smith Mountain Pumped Storage Facility, maintains injuries/illnesses or fatalities, system downtime, decreases in revenue, loss of customers, or fines and penalties.
HYDROELECTRIC POWER.
Hydroelectric power is a clean energy source that does not directly emit greenhouse gases and is entirely dependent on water availability to operate. Hydro plants can be affected by changing rainfall patterns, which can affect river flows and energy output. AEP operates 15 hydroelectric facilities and one pumped storage facility in five states. Together, these facilities can generate up to a maximum of 909 MW of electricity.
The precipitation within each watershed directly influences the ability of these units to generate electricity. Too little precipitation results in decreased power production from these facilities. When there is too much precipitation, it creates an imbalance of the upstream and downstream elevations, threatening flooding and potentially an outage if the plant’s power house is flooded. More concerning is the potential flood threat to communities along the rivers and lakes where these hydro facilities operate.
60 AEP’s Climate Impact Analysis.
AEP’s 75 MW Claytor Lake Hydroelectric Facility in Virginia.
Technology Chairman’s Message Introduction and TCFD Framework Transition Analysis Just Transition.
Physical Risks and Opportunities
Appalachian Power’s Smith Mountain Pumped Storage Facility in Virginia can provide up to 586 MW of electricity.
61 AEP’s Climate Impact Analysis a comprehensive Shoreline Management Plan with the Federal Energy Regulatory Commission (FERC).
Weather forecasting is an important tool to minimize disruptive impacts by providing information that enables plant operators and dispatchers to proactively control water levels upstream and downstream. The reservoirs can be drawn down in advance of major precipitation events and can conversely be filled with more water than normal during high-flow events to mitigate downstream impacts. Increases in precipitation or heavy-precipitation events due to climate change could increase the need for active water management. Heavy-precipitation events also increase debris and sediment in the lake, especially at the Leesville Dam, requiring divers to clear the intake screens. This creates potential safety hazards for divers who must work in turbulent water to keep the plant running smoothly.
STEAM GENERATION AND COOLING WATER USE.
Steam-electric power plants rely heavily on water to operate high-pressure boilers, turbines, cooling towers and, in some instances, emission control equipment.
In this type of plant, water is heated using coal, gas or nuclear fuel to create steam, which spins a turbine and drives an electrical generator. Cooling systems, which are the most water-intensive part of a steam-electric plant, circulate water to absorb heat from the steam and lower the water temperature. The water we use is generally returned to its original water source, and, often, it is cleaner than when it was withdrawn.
AEP relies on water withdrawn from water-stressed areas in the Mississippi, Sabine, and St. Lawrence watersheds. We use the WRI Aqueduct water risk analysis tool to understand if we have facilities operating in high-stress regions. Four facilities met this criteria in 2020.
The quality of the water is also important to protect equipment and to ensure compliance with water quality standards. For example, the John W. Turk Plant, a coalfired power plant in Arkansas, draws cooling water from the Little River, a tributary of the Red River. The Little River has experienced problems with water quality, resulting in high concentrations of total dissolved solids in the intake water and requiring the plant to curtail load or use water from back-up water supply ponds.
At some plants, especially in AEP’s western footprint, water is recycled through cooling water reservoirs. These reservoirs were built specifically to serve as a source of water and as the receiving water body for cooling water used at the plants. These facilities “recycle” nearly 100% of the water they withdraw.
WILDFIRES, DROUGHT & FLOODING.
The effects of drought and flooding conditions have the potential for significant disruption, especially if they become more severe as the climate changes.
Portions of AEP’s service territory are more frequently susceptible to drought conditions, such as West Texas. Lack of precipitation can lead to an increased risk of wildfires in these areas. However, given the vegetation profile of West Texas and low population density, the overall wildfire risk in this region remains low. Wildfire risk is reviewed as a regular course of AEP’s risk management practices.
Technology Chairman’s Message Introduction and TCFD Framework Transition Analysis Just Transition.
Physical Risks and Opportunities
WILDFIRE RISK.
Following the devastating California wildfires in 2018, AEP conducted a risk analysis of its risk exposure to wildfires. The findings show that AEP’s most substantial risk exposure is due to the sheer amount of transmission line miles that we must maintain. This means there is a greater opportunity for a conductor to make contact with vegetation that could potentially cause a fire. We monitor these risks as they change.
While AEP has thousands of line miles of exposure, there is limited climate risk from wildfires in our service territories. The risk varies widely across AEP’s service territory from both climate and line-miles perspectives. For example, Texas has over 9,300 miles of transmission lines, while Kentucky has 1,200 miles. As a result, the relative difference in exposure is significant. The three main climate risk factors associated with wildfires are averaged maximum daily wind speeds, aridity (inverse of humidity) and relative annual drought (inverse of annual rainfall). Critical wildfire climate conditions are uncommon in the eastern part of AEP’s service territory. Texas is most likely to experience the climate conditions that would contribute to wildfires.
We will continue to evaluate the threat of wildfires to the AEP system as part of our ongoing risk management function. In addition, AEP participates in the CEO-led Electricity Subsector Coordinating Council (ESCC), which serves as the principal liaison between the federal government and the industry. The ESCC has made wildfire mitigation and response a priority because of the growing threat of wildfires to the power sector and to the life, health and safety of communities.
DROUGHT Aside from creating conditions conducive to wildfires, drought can affect AEP’s operations in other ways. For example, power plants that rely on cooling water reservoirs or lakes could be forced to curtail operation when drought conditions cause water levels to drop below what is needed to operate a generating unit. In 2013, low water levels made it necessary to dredge intake canals at western coal-fueled units to provide adequate access to cooling water.
62 AEP’s Climate Impact Analysis.
AEP operates several power plants in drought-prone regions of the country that require careful water management. Since 1999, the Texas Commission on Environmental Quality has mandated that all Texas water rights holders implement a water conservation plan. The plan must include voluntary, site-specific five-year and ten-year water conservation goals, as well as cost effective solutions to ensure adequate water supply for all users in their regions. We update these plans every five years.
In addition, we file annual updates with the Texas Water Development Board. We have comprehensive water conservation plans in place for the Pirkey, Welsh, Wilkes and Knox Lee power plants (Pirkey will retire; Welsh will cease burning coal by the end of this decade). We also have a Drought Contingency Plan for the Knox Lee Plant and must comply with Drought Contingency Plans for three water providers who supply water for plant operations.
Drought conditions also can affect the daily operation of our 400 offices and service centers. In Oklahoma.
Risk Types and Factors.
Risk Type Risk Factor.
Probability Risk • Climate: Average Max Daily Wind Speed • Climate: Aridity • Climate: Annual Drought • Transmission Line-Miles • Fuel Type.
Consequence Risk • Customer Density • Wildland Urban Interface (WUI) Ranking • First Responder Accessibility • Historical Vegetation Outages.
Risk is defined as the product of probability and consequence. The data elements we looked at to analyze the risk were separated into factors that determined probability (likelihood) vs. the consequence (impact). We used this to complete a relative comparison across operating companies to determine an AEP-specific wildfire heat map.
Technology Chairman’s Message Introduction and TCFD Framework Transition Analysis Just Transition.
Physical Risks and Opportunities
and Texas, where a heavy clay-based soil is the norm, drought conditions cause uneven settling of buildings that leads to foundation and building infrastructure damage.
FLOODING.
Heavy rain events can disrupt the operation of substation facilities, offices and service centers located across AEP’s service territory. For this exercise, we overlaid AEP’s facilities (excluding power plants) on FEMA’s 100-year flood map. We learned that several facilities that were hardened to withstand high wind impacts remain vulnerable to flooding. The effects of flooding to some of those facilities could be disruptive — from flood damage that dislocates daily operations to complete loss of a facility.
The immediate negative impacts to substations due to flooding may include: • Loss of the HVAC system • Loss of AC station service • Communications failure • Loss of DC battery system(s) • Water damage to protection & control equipment (i.e., relays) • Damage to major equipment (i.e., transformers, circuit breakers) • De-energization of a substation • Fire and catastrophic loss of a substation • Oil spills from equipment into the water.
All of these potential impacts are the result of water coming into contact with part of the energized or insulating components of the electric grid. In addition, catastrophic damage — such as the de-energization of a substation or fire and loss of a substation — can be triggered by other minor damages or failures. And once a substation is flooded, we cannot make repairs until the water recedes or is pumped out.
Flooding has other effects on substations over the longer term, including compromising the integrity of foundations and positioning of transmission and 63 AEP’s Climate Impact Analysis distribution support structures. In addition, heavy rains or floods can wash away substation stones, which are important to protect employees from inadvertently touching or stepping on a surface that has become an unintentional pathway of stray electrical current flows. Flooding also damages metal equipment, enclosures, structures, fences, and grounding conductors/rods, which can be corroded over time.
This could also cause increased damage to roads, laydown yards (important for storm restoration and construction), and site drainage (including retention/ detention ponds). These impacts would increase the cost of maintenance, necessitate identification of new laydown yards and staging areas, and potentially force redesign or upgrades to affected buildings. In the future, the location of new facilities will take into consideration elevation and road access during flood conditions, with the intent of locating outside of areas most vulnerable to severe flooding. We have also developed a process for prioritizing mitigation strategies for at-risk facilities.
A 2020 review of existing AEP stations identified that there are nearly 260 substations located within a 100-year flood plain. We will be monitoring the evolution of floodplain maps due to climate change and are prioritizing higher risk stations for remedial action as the cost of moving all of them in the near term is prohibitive.
To understand the risk of storm surge and flooding along coastal Texas, we overlaid our substations in the Corpus.
Flooded Clendenin Station in Kanawha County, West Virginia.
Technology Chairman’s Message Introduction and TCFD Framework Transition Analysis Just Transition.
Physical Risks and Opportunities
64 AEP’s Climate Impact Analysis.
Christi area over a storm surge map using the Sea, Lake and Overland Surges from Hurricanes (SLOSH) model developed by the National Weather Service (NWS) to estimate storm surge heights (as shown in the figure above). We modeled how a Category 4 hurricane creates storm surge in this area; the red, orange, yellow and blue colors on the map show storm surge of 9 feet, 6 feet, 3 feet, and no flooding, respectively. The exercise showed us four substations vulnerable to storm surge and flooding in a Category 4 hurricane.
Too much water from heavy precipitation events also can affect operations at our power plants. In 2019, Southwestern Electric Power Company’s Flint Creek Plant in Arkansas experienced flood damage that cut off the plant’s supply of water from its cooling lake for nearly a year while repairs were made.
Prolonged periods of high water on the Ohio River due to heavy precipitation events during the winter and spring can affect the ability of AEP’s Mountaineer, Mitchell and Rockport plants to off-load coal and limestone supplies from barges. In 2019, high water levels on the river caused a slight reduction in unit output to reduce the need for coal until the river returned to normal levels. If heavy precipitation events become more frequent, the risk of operational disruptions could increase.
HURRICANES AND SEA LEVEL RISE.
An extension of flood risk is posed by sea level rise, hurricanes and storm surge. AEP’s facilities and service territory cover a portion of the Texas Gulf Coast, which is prone to these risks. Sea levels have been gradually increasing due to melting ice caps in the Arctic, and scientific literature supports that warmer ocean temperatures could push destructive storm surge from hurricanes further inland.
There are short- and long-term variations in sea level. Short-term variations in sea level are caused by changing tides and flooding brought on by melting ice and hurricanes. Long-term variations are gradual and intermittent, such as El Niño. In urban areas, such as the Gulf Coast, rising seas can threaten public infrastructure, such as roads and bridges that support local jobs and regional industries.
AEP’s Texas service territory has been subjected to a number of severe coastal storms over the years. Hurricane Celia in 1970 and Hurricane Harvey in 2017.
Category 4 hurricane storm surge map for part of the coastal area of.
Corpus Christi, Texas. The areas circled reflect the locations of four substations and the level of storm surge to which they could be exposed.
Potential Storm Surge Impacts.
AEP CEO Nick Akins thanks line crews for their efforts to restore power after Hurricane Harvey.
Technology Chairman’s Message Introduction and TCFD Framework Transition Analysis Just Transition.