Published in The Construction Lawyer Volume 43, Number 4, ©2024 by the American Bar Association. Reproduced with
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Forum on Construction Law The Construction Lawyer Fall 2024
70
Guarding the Net of Uncertainty: Trends, Changes,
and Challenges for Insuring Power Projects
By Lynnette Roberts, Chase Johnson, and Christopher DeBruin
Lynnette Roberts is corporate risk manager at Power Engineers, Inc., in Hailey, Idaho. Chase Johnson
is senior vice president and team leader for the Construction & Design practice at Lockton Companies
in Kansas City, Missouri. Christopher DeBruin is senior vice president and director of claims at Alliant
Insurance Services in Boston, Massachusetts.
The US power grid, by and large, was designed and built in a time when demand for power was lower than
today’s modern needs, fossil fuels and hydroelectric power were the only means of power generation, and
utilities were governmental entities. While this description is of course an overly simplified description of
the founding of the US power grid, it remains a useful comparison point against the United States’ modern
power grid, which is one of the largest, most complex machines in existence and includes 6,413 power
plants with approximately 1,075 gigawatts of generation capacity, 55,000 substations, 642,000 miles
of high-voltage lines, and 6.3 million miles of distribution lines.1 The US power grid is comprised of a
myriad of ownership interests including public-private partnerships, regional transmission organizations,
independent system operators, financial institutions, and international investors.
Our 21st century life is grounded in having reliable power; yet the United States has not made many
improvements to the power grid since the 1960s and recent events demonstrate the grid’s vulnerabilities
(e.g., recent extreme weather events testing the limits of Texas’s power grid).2 Put simply, the United States
is asking more from our power grid than ever before. The United States needs reliable power, but in many
states, there is a pressure to move toward renewables, an inherently different type of power generation.
Further, transportation electrification, storm hardening efforts, and battery storage all pose unique
challenges for the current power grid.
Governmental oversight of the grid is done by the Federal Energy Regulatory Commission, with the mission
to “[a]ssist consumers in obtaining reliable, safe, secure, and economically efficient energy services at
a reasonable cost through appropriate regulatory and market means, and collaborative efforts.”3 State
agencies and laws also apply and may equally oversee power grid construction projects.4
The Infrastructure Investment and Jobs Act pumped millions of dollars into the economy to upgrade
US infrastructure, including the power grid.5 Dollars are slowly making their way to utilities, and
projects are improving the reliability of the electrical grid, including increasing the security of our power,
expanding power production by adding renewable generation (e.g., wind and solar), and building necessary
transmission lines to take power generated from new renewable-friendly environments into our urban
centers. As a consequence, power projects are becoming bigger and more complex.
Utilities interested in evolving the power grid by building, improving, and/or expanding on miles and
miles of high-voltage transmission lines, thousands of substations, and the development of land for
either transmission or generation must give care and consideration to environmentally sensitive areas,
archeological sites, and private property of landowners who have granted the utilities right-of-way access.
