Helping Ontario Energy Board strengthen climate resilience planning

Challenge 

Extreme weather is no longer a future threat; it’s a present-day reality. Across Ontario, Canada and beyond, climate change is testing the limits of energy infrastructure and challenging utilities to adjust their business models to guarantee operational reliability.  

One of the biggest challenges they face is standardization, especially of data. Climate data can be incomplete and/or inconsistent, while asset data varies in quality and granularity. And when it comes to modeling vulnerabilities, those gaps and inconsistencies matter. 

Accurate, complete data is needed more than ever for climate resilience planning, something that regulators are focusing on for several reasons. Traditionally, regulators have focused on reliability, affordability, and safety. But with climate impacts accelerating, they recognize that greater emphasis on resilience must be built into the way utilities track, plan, and invest. 

Operating under a social contract with the public, utilities deliver essential services in exchange for public trust and oversight. As more come under private equity ownership, regulators must ensure that long-term infrastructure decisions outlast short-term financial gains. Regulation becomes the vehicle for aligning short-term incentives with long-term public value. It also ensures consistency across multiple utilities operating under the same regulatory body—a critical factor for widescale resilience planning. 

Building climate resilience into planning isn’t just good policy; it’s smart business. It protects investments, strengthens grid reliability, and enhances public trust. For utilities, it’s a key way to future-proof their systems. For regulators, it helps ensure long-term accountability. 

Responding to Ontario Ministry of Energy directives to strengthen climate resilience in the electricity sector, the Ontario Energy Board (OEB) has created its Vulnerability Assessment and System Hardening (VASH) initiative. Under the initiative, distributors are expected to incorporate climate resilience into their asset and investment planning—and to succeed, they need to adopt standardized frameworks and methodologies. That’s why OEB turned to Guidehouse for help with developing a practical, adaptable framework for strengthening climate resilience planning across distributors 

Approach 

Working with the OEB, we developed a toolkit to give utilities of varying sizes and circumstances a standardized, flexible approach to plan for increasingly extreme and recurring risks by: 

• Assessing how vulnerable their assets are to climate-related threats 
• Evaluating cost effectiveness of various solutions through an objective benefit-cost framework  

The framework offers two distinct pathways: a generic option and a custom option, each tailored to different levels of distributor capacity and data maturity. 

The generic option is a standardized approach designed for distributors who may not have the resources to develop their own models. It includes a pre-built vulnerability assessment toolkit and a benefit-cost analysis toolkit to help utilities assess asset vulnerability and plan investments. This option also supports the use of tools like the U.S. Department of Energy’s Interruption Cost Estimate Calculator for estimating the value of lost load—making it a practical choice for local distribution companies (LDCs) seeking a low-barrier entry into climate planning. 

In contrast, the custom option is intended for distributors with the capacity to conduct more granular assessments. It allows the use of proprietary methodologies such as the Public Infrastructure Engineering Vulnerability Committee Protocol and custom datasets—as long as they meet the OEB’s criteria for quantitative rigor and transparency and provide justification for data choices. LDCs must document their climate models, assumptions, and analysis methods, including metrics like annual probability of failure and lifetime cost-benefit estimates. 

By offering both options, the OEB can give all utilities regardless of size or technical capability the opportunity to meaningfully participate in climate resilience planning. This dual-path approach balances the need for regulatory consistency with the flexibility to accommodate local contexts and distributor-specific capabilities. At the same time, it sets clear expectations for data quality in a way that remains achievable across utilities. The result is a robust, inclusive framework that’s adaptable enough to support diverse utility contexts and capacities. 

Impact

The VASH initiative is already influencing how Ontario’s utilities plan for climate resilience, offering several valuable takeaways for utilities and regulators alike. 

Flexibility is key. A one-size-fits-all approach doesn’t work. The OEB’s dual-path model offering both a standardized toolkit and a customizable option lets utilities choose what best fits their needs.  

Stakeholder engagement matters. The OEB consulted with various utilities and used the resulting feedback to shape its practical, widely accepted framework. 

Regulatory integration drives impact. By embedding VASH into filing requirements, the OEB can ensure that climate resilience is part of core planning instead of an optional add-on. 

As distributors implement this flexible, regulator-led framework, valuable insights will continue to emerge. Those insights in turn can inform resilience strategies across other jurisdictions that follow suit in embedding climate resilience into their widescale utility planning. 

The opinions and views expressed in this article are those of Guidehouse and do not necessarily reflect those of the Ontario Energy Board.