Climate Change & Public Transit The New Normal

August 2014 APTA Sustainability Workshop Boston, MA

2

This is what Sandy looked like on October 29, 2012

2

3

And this is what the MTA looked like to Sandy …

3

4 4

SIGNIFICANT WIND/TREE

DAMAGE KNOCKS OUT

SERVICE ALONG HARLEM

LINE AND NEW HAVEN

LINE and the NEW

CANAAN AND DANBURY

BRANCHES

STORM SURGE IN NJ

AND HARMON YARDS

DAMAGES ROLLING

STOCK

FLOODING KNOCKS OUT

COMMUNICATIONS, SIGNALS,

AND POWER AND FLOODS

STATIONS AND YARDS

UNPRECENDENTED

STORM SURGE

ALONG HUDSON

RIVER SHORELINE

5

8 stations with

major flood

damage – South

Ferry, Whitehall,

148th St, 207th St,

Dyckman, Beach

116th Station, 86th

St Sea Beach,

Stillwell Rockaways

track

washout

Train yards and

bus depot with

significant flood

damage

Staten Island

Railway

maintenance

shop major

flood damage

Numerous other

locations with moderate

flooding and wind

damage including

• Downed trees

• Roof / canopy / sidings

damages

• Communication

systems damages

• Signal system

damages

5

6

Sandy’s targets included:

6

Rail Yards

Manholes

Hatches

Stairways

Vents

Tunnel Portals

7

Damage was catastrophic across the system

7

LIRR West Side Yard

NYC Transit South Ferry

Metro-North Hudson Line B&T Queens Midtown Tunnel

Metro-North Spuyten Duyvil Station Flooded track and equipment

Destroyed pump control

Shorted electrical equipment

Failed signals

8

0.5 inch opening => open area, A = 0.993 sq. ft. Coefficient C = 0.67 g = 32.2 ft./sec/sec h = 3.0 ft. water head

Q = 9.25 cu. ft./sec = 4,152 gal/min = 249,120 gal/hr.

6 ft.

6 ft.

5 ft. – 11 in.

5 ft. – 11 in.

In 4 hrs.: approximately 1 M gallons would have entered

8

Bu

ildin

g B

ack

Bet

ter

The

MTA

an

d S

up

erst

orm

San

dy

The engineering challenge is formidable: small openings can deliver huge amounts of water under pressure

9

9

10

Resiliency Development

• Assess damage

• Repair/Replace determination

• Evaluate shut-down (packaging scenarios)

10 Damaged pump equipment, Hugh L. Carey Tunnel

Work in Greenpoint Tube Corroded Metro-North Switch Machine

11

An unprecedented portfolio of storm recovery and resiliency work is underway for all MTA agencies

• 36 projects in construction, total value of $578m

• 151 projects in planning, design, or procurement

• Over $800m in contracts underway

11

B&T eligible for FEMA; all other agencies eligible for

FTA Emergency Relief

12

On-going work

12

NYCT Montague Tube

LIRR Long Beach Yard

Hugh L. Carey Tunnel

Metro-North Hudson Line

13

Resiliency Approach

13

Protective Measures - keep water out Asset Protection - minimize damage if water enters system Recovery - expedite service restoration

Water exclusion

Water ejection and asset

protection

Recovery and resilient systems/processes

14

Resiliency Concepts

14

Manhole Inserts Sidewalk Vent Cover Deployable Staircase Cover

Trap Bag Barrier Deployable Flood Wall

Water-filled Cofferdam

15

MTA Climate Adaptation Task Force

• Objective:

• Coordinate resiliency efforts across agencies

16

Design Guidelines

17

NPCC 2013 Sea Level Rise Projections

Percentiles

90th

75th

25th

10th

2020s 2050s 2080s

21

30

18

8

39

11 13

58

8

10

2

4

New York City Panel on Climate Change, 2013: Climate Risk Information 2013: Observations, Climate Change Projections, and Maps. C. Rosenzweig and W. Solecki (Editors), NPCC2. Prepared for use by the City of New York Special Initiative on Rebuilding and Resiliency, New York, New York.

18

GIS Analysis

19

Metro-North Railroad Inundation Mapbook

20

Internal Clearinghouse

21

Rebuilding costs a lot, but remember …

• The MTA’s network is a nearly $1 trillion asset

• The current Capital Program—with Sandy projects—represents a reinvestment over five years of less than 4% of the system’s total value, or less than 1% per year of re-investment

• Current funding sources are tapped out, new funding will have to come from non-traditional places.

21

22

MTA Cat Bond: Why & How

• Post-Sandy, MTA’s captive insurance company, First Mutual Transportation Assurance Company (“FMTAC”), received reduced capacity offers from the traditional property reinsurance market coupled with higher pricing in the renewal.

• On June 5, 2013 MTA and FMTAC staff received authorization from the Board to proceed with structuring and marketing of a capital markets-based reinsurance transaction providing storm surge coverage

• GOALS

• Access to additional reinsurance capacity for catastrophic perils

• Developing a stable, long term alternative reinsurance

• Creating competition with traditional reinsurance, thereby providing leverage

• Demonstrating reasonable efforts to obtain property coverage comparable to prior years' coverage levels 22

23

MTA Cat Bond: Why & How

• Area A tidal gauges measure surge closely correlated with surge at MTA assets located in Manhattan and up the Hudson, Harlem and East Rivers

• Area B tidal gauges measure surge closely correlated with surge at MTA assets located near Long Island Sound

• Index Value for Area A is a weighted composite of the readings at three of its gauges; Index Value for Area B is a weighted composite of the readings at two of its gauges

Map of Calculation Locations

Area A

Area B

During a Named Storm, if either the Area A Event Index Value reaches or exceeds 8.5 ft or the Area B Event Index Value reaches or exceeds 15.5 ft, a full principal reduction is triggered and the $200 million collateral moves into the reinsurance loss account. The Base Case annual probability of the transaction triggering is estimated to be 1.67%, or once in 60 years.

23

24

MTA Cat Bond: Very well received

Capital market risk transfer enabled FMTAC to obtain fully secured property reinsurance protection against storm surge without requiring MTA or FMTAC to become a catastrophe bond issuer - FMTAC entered into a reinsurance agreement with MetroCat Re Ltd.

• MetroCat Re inaugural transaction sponsored by FMTAC closed on July 30, 2013: • FMTAC obtained $200 million of fully collateralized storm surge reinsurance protection, locked in for three years

• FMTAC entered into a reinsurance agreement with special purpose reinsurer MetroCat Re Ltd., providing $200 million in fully collateralized storm surge coverage supplementing FMTAC’s $500 million in property coverage obtained from traditional reinsurance markets

• The transaction involved the first capital market cat bond focusing directly on storm surge risk

• Investors reacted favorably to the parametric trigger structure and the pricing was tighter than anticipated, due to high demand for the MetroCat Re bonds

• The resulting cost to FMTAC was substantially lower than that of traditional property reinsurance obtained by FMTAC in April, 2013.

24

25

Longer term funding: Carbon Value Capture

25

26

2.1

16.9

26 ~17 million metric tons of Transit Avoided Carbon has the potential to

generate hundreds of millions of dollars annually

Longer term funding: Carbon Value Capture

Questions?

Thank you