As California Burns; Valuable Lessons from Hurricane Katrina
As I watch parts of California burn, I am reminded of Hurricane Katrina, notably the despair and destruction that characterized much of New Orleans immediately post disaster. Years later, through a variety of rebuilding efforts, we were able to use Katrina as a catalyst to improve many aspects of the city, especially elements of our outdated and inadequate infrastructure.
Now, as California endures escalating wildfires and prolonged blackouts, the state must take a page out of the Katrina playbook and utilize this pivotal moment to change its approach to infrastructure investment. Namely, the state’s electrical grid, which is the source of many of these fires.
According to a 2014 Technical Report for the Dept of Energy, climate change will increase disruptions of infrastructure services in sensitive areas already strained by ageing infrastructure, resulting in “cascading…system failures.” In California the wildfires are charring both the earth and the energy grid.
California’s utilities, like PG&E, are thus finding themselves at the forefront of the climate crisis; they must balance the need for large investment in infrastructure and maintenance upgrades -- to contend with growing climatic uncertainty -- at a time of wavering political support for rate hikes.
Absent rate hikes for electricity, it is unrealistic to assume that PG&E, or any utility, will be able to absorb the brunt of responsibility associated with major infrastructure upgrades. Instead, the degree of risk and development in sensitive areas must be spread between sectors, including utilities, government, homeowners/citizens, businesses and insurance.
New Orleans has endured a myriad of man-made and natural disasters, and we suffer from our fair share of infrastructure challenges (including pot holes that can pass for asteroid craters), but we also realize that solving for infrastructure requires unique partnerships and investment.
The threat of consistent utility rate increases has become a fact of life for those of us who make our home below sea level, but with rate hikes comes increased scrutiny of how these funds are applied to solve for changing climatic conditions. To help mitigate these challenges, the City of New Orleans created the nation’s first disaster resiliency plan to try and tackle issues of climate change in the face of decaying infrastructure and growing equity disparities.
Rather than hold utilities solely responsible for major improvements, New Orleans focuses on creative partnership solutions to help fund and build resilience-oriented initiatives. One can certainly argue that this approach is slow and cumbersome (perhaps easier to simply sue a utility), but a resilience mind-set coupled with innovative partnerships must become the new normal amid the uncertainties of climate change.
In California, PG&E, like many major utilities, has little choice but to increase rates to attract the investment needed to offset accelerating costs. However, rather than opposing rate increases, citizens and businesses alike should set aside the vitriol and instead adopt a resilience mindset by encouraging the utilization of a public-private approach to solve for pressing issues, such as: raising funds for preventative actions like clearing vegetation and research initiatives to solve for the archaic action of simply turning off power during high wind occurrences.
California must also consider more Public Private Partnerships (P3s), which take many forms but the structure creates a win-win solution between government, utilities, investors and citizens. Innovative governance is also a component of P3s. These governance structures help give rise to multi-sectoral collaboration, creating a platform by which citizens can help inform and prioritize complex community needs, driving higher value results.
P3s are typically project specific focusing on unique financing and procurement approaches that can be utilized to build a priority initiative that otherwise would not happen – like toll roads, water or energy systems and bridges. In New Orleans, unique partnerships have helped rebuild schools, hospitals, roads and other critical components of the city destroyed by Katrina.
California has many successful P3 projects and Sacramento’s recent passage of AB1054, creating a $21B fund to help offset future wild fire claims funded by ratepayers and shareholder profits alike, may yet encourage more cross-sectoral engagement.
Due to the wildfires and blackouts, I understand Californians are angry at PG&E – and deservedly so. But they can’t be more angry than New Orleanians were at the various local, state, and federal agencies for the failures exposed by Katrina. But here, we realized that our only way to rebuild, was to find ways to partner with the very agencies and organizations we loathed.
So, rather than demonize utilities, California should instead focus reform efforts on changing the way in which we approach and support investment in our nation’s infrastructure. If this collaborative mindset can work in New Orleans, it can work in California, too.
Caitlin Cain, is an economic development consultant and the former CEO of the World Trade Center of New Orleans; she served as the Director of Economic Development for the New Orleans Regional Planning Commission immediately during and after Hurricane Katrina.