But before it could enact any major measures, Superstorm Sandy hit. Now, the company is pushing a $3.9-billion hardening and resiliency program, and New Jersey state regulators are reviewing the first five-year, $2.6-billion portion of that plan. It calls for the utility to raise or protect about 30 substations that are below Federal Emergency Management Agency elevation, place 20 miles of distribution lines underground, install some smart-grid capabilities and protect 10 gas metering or regulating stations.

Kanapathy says that after the five-year construction plan is complete, if the system were hit with another Sandy-like storm, PSEG customers would see a 39% reduction in outage time. There's a fine line between making a system more storm-resilient and "gold-plating" it. That line is different for every regulatory body and every company, says Lorenz.

One adaptation method—placing utility lines underground—has been considered gold-plating in almost every instance, reports the Edison Electric Institute, a Washington, D.C.-based industry group for investor-owned utilities.

Study after study has shown that, unless lines are in a densely populated area that is not prone to flooding, burying lines is up to 10 times more costly than conventional above-ground power lines, EEI claims.

Underground power lines also can take longer to repair when they go down, as evidenced in lower Manhattan after Superstorm Sandy. "In certain situations, you may not be gaining on resilience," says Dean Oskvig, CEO of Black & Veatch.

While utilities are hardening their systems, they also have begun to examine them in a more holistic and regional way to understand the range of events that can occur and take steps to adapt.

Lower snowpack in the mountains, for example, means less runoff in the spring to power hydroelectric dams in the West and the Northeast. Utilities are trying to adapt by installing more efficient turbines, as was done at the Wanapum Dam on the Columbia River.

They are also turning to renewable power, such as solar and wind. But renewables aren't immune to a changing climate: Solar power systems need large amounts of water for cooling.

When water is too warm to cool steam generators at powerplants, utilities must extract water from lower levels in lakes and reservoirs or find alternative sources of water or of power generation. Some are converting to combined-cycle, natural-gas-turbine power generation because it requires less water for cooling.

Further, utilities are facing less water availability, says Kent Zammit, senior program manager for water and the environment at the Electric Power Research Institute. Dry cooling and closed-loop cooling can reduce water usage, but those are expensive options that are preferred for only new plants. The dry cooling method, also called air cooling, creates a parasitic load on generation, making it less efficient, Zammit says.

In studies done at its labs, DOE found that adding dry-cooling to existing plants would cost less than $4 per MW-hour, or about 10% more overall. The total parasitic load would be about 4.6% of the energy of the retrofitted plants.

Distributed Generation

Microgrids, or distributed generation, is another adaptation method that is gaining favor. The grids allow regions, cities or portions of a city to operate independently of the larger power grid.

DOE recently announced a memorandum of understanding with the state of New Jersey to design a 50-MW microgrid that would supply the state's transit system with electricity during times of bad weather and emergency. That microgrid will use smart-grid technologies, backup generation, solar and wind power, and storage.

Connecticut also is funding nine microgrid-network test projects around the state to provide power for emergency responders, hospitals, grocery stores and gas stations.

After experiencing several recent major storms, Entergy has taken a number of steps to improve its system's resiliency. In addition to a massive cost-benefit study and continual upgrades to its lines and system operations that adjust for weather-related outages, it is spending $71 million to harden substations and lines that provide power to Port Fourchon.

For example, it recently raised the control house 12 ft above ground level for the Leesville power substation, which provides power to Port Fourchon, and added fiber-optic communications. The old control house was just 4 ft above ground. The company also is building a new transmission line designed to withstand winds up to 150 mph.

With all that rides on Port Fourchon, its plan is relatively easy to sell to regulators and customers. In areas that aren't quite as critical, similar measures are harder to sell.

"It's easy to understand the risk," says AECOM's Lorenz. "What's more difficult is the decision-making process about what to do and when."