Navigating the Challenges of Aging Infrastructure: A Look at Grid Modernization and Fireproofing Measures in the Utility Sector

Aging infrastructure is a global issue that impacts utilities everywhere. As these systems age, they lose reliability and become more prone to failure. Failures can lead to widespread power outages, water shortages, and other disruptions, causing severe impacts on communities.

As technology progresses and electricity demand grows, the existing grid infrastructure often struggles to keep pace. This can result in inefficiencies, power outages, and increased costs for utilities. To tackle this, many utilities are making substantial investments in their grid infrastructure, focusing on enhancing its resilience and reliability to withstand increased demand and extreme weather events.

For utilities operating in areas prone to wildfires, fireproofing their operations is a critical challenge. Aging infrastructure, particularly old, bare overhead wires, can pose a significant fire risk. To mitigate this risk, utilities are replacing these wires with covered conductors and implementing other fireproofing measures. These efforts can significantly reduce fire-related damages and help protect communities from the devastating impacts of wildfires.

However, the cost of modernizing grid infrastructure and implementing fireproofing measures can be substantial. Financial pressures such as higher interest rates and reduced returns on equity often exacerbate these costs. To fund these efforts, many utilities are seeking increased revenue requirements, which can result in higher costs for customers.

Southern California Edison (SCE), a subsidiary of Edison International, exemplifies a utility making substantial strides to address these challenges. From 2025 through 2028, SCE projects an annual capital deployment of around $8 billion, double what it was six years ago. Over 85% of these investments are directed towards the distribution grid, indicating a strong focus on infrastructure renewal and resilience. Additionally, SCE has made significant progress in fireproofing its operations, replacing almost 5,000 circuit miles of bare overhead wires with covered conductors. These efforts have led to a significant reduction in fire-related damages, demonstrating the effectiveness of proactive investment in infrastructure and fireproofing measures.

Pacific Gas & Electric (PG&E), California’s largest investor-owned utility, is also taking innovative steps to address the challenges of aging infrastructure. The utility has applied for an approximately $7 billion loan from the federal government to upgrade its electric grid. This creative financing approach aims to advance the clean energy transition more quickly and at a lower cost to customers. The loan would fund eligible investments in electric infrastructure upgrades for state and federal approved projects that enable improved resiliency, building and vehicle electrification, and distributed energy resources. This move is part of PG&E's broader plan to invest roughly $18 billion through 2025 to protect its infrastructure from the threat of fires. The loan would essentially provide a source of "cheap money" for PG&E, enabling the utility to finance these critical projects at a lower cost for its customers.

The coming years will be critical for utilities as they work to modernize their infrastructure and fireproof their operations. With substantial investments, strategic planning, and a focus on resilience and reliability, utilities can overcome these challenges and ensure a more sustainable and reliable future. However, they must balance these efforts with considerations for the financial impact on customers, highlighting the need for innovative financing solutions and regulatory support.

EKN Engineering is well-positioned to support grid modernization efforts through its expertise in asset health, work bundling, and data analytics. By assessing the health of existing assets, EKN can help utilities identify and prioritize areas of the grid that require immediate attention or upgrades, thereby enhancing the reliability and resilience of the infrastructure. Through work bundling, EKN can streamline the modernization process, grouping together similar tasks or projects to achieve economies of scale and reduce overall project costs. Furthermore, EKN's proficiency in data analytics can provide valuable insights into grid performance, helping utilities make data-driven decisions and optimize their investments and prioritize replacements.  

By leveraging these capabilities, EKN Engineering can play a pivotal role in helping utilities navigate the challenges of aging infrastructure and transition towards a more sustainable and reliable grid.