Improving the estimated cost of sustained power interruptions to electricity customers

Electricity reliability and resiliency have become a topic of heightened interest in recent years in the United States. As utilities, regulators, and policymakers determine how to achieve optimal levels of electricity reliability while considering how best to prepare for future disruptions in power,...

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Bibliographic Details
Published in:Energy (Oxford) 2018-06, Vol.153 (C), p.1038-1047
Main Authors: LaCommare, Kristina Hamachi, Eto, Joseph H., Dunn, Laurel N., Sohn, Michael D.
Format: Article
Language:English
Subjects:
Customers
Electric utilities
Electricity
Electricity distribution
Electricity pricing
Electricity reliability
ENERGY PLANNING, POLICY, AND ECONOMY
Hazards
Investments
Monte Carlo simulation
Power interruptions
Power supply
Regulators
Reliability
Resiliency
Value of reliability
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Summary:Electricity reliability and resiliency have become a topic of heightened interest in recent years in the United States. As utilities, regulators, and policymakers determine how to achieve optimal levels of electricity reliability while considering how best to prepare for future disruptions in power, the related issue of how much it costs when customers lose power remains a largely unanswered question. In 2006, Lawrence Berkeley National Laboratory developed an end-use based framework that estimates the cost of power interruptions in the U.S that has served as a foundational paper using the best available, yet far from perfect, information at that time. Since then, an abundance of work has been done to improve the quality and availability of information that now allow us to make a much more robust assessment of the cost of power interruptions to U.S. customers. In this work, we find that the total U.S. cost of sustained power interruptions is $44 billion per year (2015-$) −25% more than the $26 billion per year in 2002-$ (or $35 billion per year in 2015-$) estimated in our 2006 study. •Estimated annual cost of sustained power interruptions in the US is $44 B (2015- $).•With uncertainty in reliability our estimate is between $35-$50 B at 90% confidence.•Estimate is based on nationwide statistics of utility reliability.•Estimate accounts for how power interruption duration affects customer costs.•Estimate accounts for customer adoption of back-up generators to reduce these costs.
ISSN:0360-5442
1873-6785
DOI:10.1016/j.energy.2018.04.082