With most of New Orleans suffering through a third day without power, Entergy Corp. faces questions about whether it was sufficiently prepared for another monster storm pummeling the city.

Such reckoning is becoming all-too-familiar for utilities nationwide that must contend with more weather catastrophes fueled by a rapidly warming climate and the need to strengthen their aging transmission systems. U.S. power companies face a $500 billion "resilience investment gap" that poses risks to their assets and long-term viability if unaddressed, a report by the ICF consulting firm warned earlier this year.

"We still don't have power or gas, I can't even access my email or information — we do wonder what's going on," Andrew Tuozzolo, the New Orleans City Council chief of staff, bristled in a brief phone interview Wednesday morning. As with any outage, he said an official inquiry will be launched into the loss of power.

By midday Sept. 1, nearly four days after Hurricane Ida struck the Louisiana coast with 150 miles-per-hour winds, Entergy was able to return power to 11,500 customers in isolated pockets of New Orleans as the city heat index crept toward 100 degrees. A 400-foot transmission tower by the Mississippi River that withstood Hurricane Katrina in 2005 collapsed from the wind on Sunday and contributed to the loss of power experienced by the entire city.

"While initial service can be provided to some customers, the full restoration will still take time given the significant damage across the region," Entergy cautioned in a statement.

Meanwhile, in California, thousands of residents in the Lake Tahoe region were fleeing the rapidly growing Caldor wildfire, one of 15 major blazes burning across the drought-stricken state. Under pressure to reduce fires sparked by overhead power lines, PG&E Corp. recently said it plans to invest up to $20 billion to bury 10,000 miles of high-risk distribution lines.

"I don't know of any utilities that are not preparing for more extreme weather today," said Larry Gasteiger, Executive Director of Wires, a trade group representing transmission owners and developers. "There are all kinds of extreme weather events that seem to be increasing and that we need to deal with in the transmission system. I think it's more a question of which ones are taking additional measures."

Entergy to invest nearly $7 billion in grid

In an Aug. 31 call with President Joe Biden, Entergy CEO Leo Denault was among several utility leaders who discussed the need to harden the U.S. grid and make it more resilient against "the full spectrum of 21st-century threats, including extreme weather events," according to a White House readout of the call.

Many power companies are making those kinds of investments as they gradually update grid infrastructure dating back as far as the 1950s, but a growing chorus of industry players and observers say more is needed. The federal infrastructure bill now moving through Congress allocates nearly $29 billion to new grid investments.

For its part, Entergy will invest about $6.8 billion in transmission upgrades between 2015 and 2022, company spokesman Neil Kirby wrote in an Aug. 31 email. Just last year, another catastrophic Category 4 hurricane wiped out most of Entergy's transmission line system in the Lake Charles area some 200 miles west of New Orleans.

"Entergy used this opportunity to replace these structures and harden the transmission system," Kirby wrote.

Such upgrades came after some tense years between the utility and city, which oversees Entergy's New Orleans operations. After receiving complaints about frequent outages during normal weather days several years ago, the city council in 2019 ordered an investigation into the matter and ultimately fined the company $1 million for failing to adequately maintain its equipment.

An Entergy executive had previously acknowledged that power reliability declined after the company had cut investments in its distribution system.

Regulators must send a "clear message"

The ICF researchers found that utilities are, in fact, lagging other sectors when it comes to responding to climate threats against their energy systems. Many have not yet assessed the exposure of their infrastructure to climate threats or devised ways to measure the vulnerabilities or hazards they face.

In addition, utilities face "immense difficulty" trying to secure funding to proactively shore up their systems against climate risks, the researchers noted. The largest and perhaps not the most intuitive threat, according to ICF, is rising temperatures that it found to account for 60% of the investment gap.

More heatwaves will increase demand for power while making transformers and transmission lines less efficient. More frequent heat also stresses the grid and increases the risk of blackouts, which means utilities must refocus time and resources to better analyze such risks, the researchers wrote.

"If regulators were to provide incentives to utilities to go above and beyond basic reliability standards and make sure that utilities know they can recover the costs associated with these types of investments, I'm sure utilities would do so," Gasteiger said. "Regulators can send a very strong and clear message to utilities that these types of investments are valuable and needed."

In fact, utilities operating in Texas' deregulated market, including Entergy, face new state and federal reliability requirements after a historic cold snap in February left several million without power and heat. More than 200 Texans died from that event.