The massive electric power blackout in the northeastern United States and Canada on August 14-15, 2003 resulted in the U.S. electricity system being called "antiquated" and catalyzed discussions about modernizing the grid. Industry sources suggested that investments of $50 to $100 billion would be needed. This report seeks to quantify an important piece of information that has been missing from these discussions: how much do power interruptions and fluctuations in power quality (power-quality events) cost U.S. electricity consumers? Accurately estimating this cost will help assess the potential benefits of investments in improving the reliability of the grid.We develop a comprehensive end-use framework for assessing the cost to U.S. electricity consumers of power interruptions and power-quality events (referred to collectively as "reliability events").The framework expresses these costs as a function of:• Number of customers by type in a region;• Frequency and type of reliability events experienced annually (including both power interruptions and power-quality events) by these customers; • Cost of reliability events; and• Vulnerability of customers to these events.The framework is designed so that its cost estimate can be improved as additional data become available.Using our framework, we estimate that the national cost of power interruptions is about $80 billion annually, based on the best information available in the public domain. However, there are large gaps in and significant uncertainties about the information currently available. Notably, we were not able to develop an estimate of power-quality events. Sensitivity analysis of some of these uncertainties suggests that the total annual cost could range from less than $30 billion to more than $130 billion. Because of this large range and the enormous cost of the decisions that may be based on this estimate, we encourage policy makers, regulators, and industry to jointly undertake the comparatively modest-cost improvements needed in the information used to estimate the cost of reliability events. Specific areas for improvement include: coordinated, nationwide collection of updated information on the cost of reliability events; consistent definition and recording of the duration and frequency of reliability events, including powerquality events; and improved information on the costs of and efforts by consumers to reduce their vulnerability to reliability events.

The massive electric power blackout in the northeastern U.S. and Canada on August [14][15] 2003 catalyzed discussions about modernizing the U.S. electricity grid. Industry sources suggested that investments of $50 to $100 billion would be needed. This work seeks to better understand an important piece of information that has been missing from these discussions: what do power interruptions and fluctuations in power quality (power-quality events) cost electricity consumers?We developed a bottom-up approach for assessing the cost to U.S. electricity consumers of power interruptions and power-quality events (referred to collectively as "reliability events").The approach can be used to help assess the potential benefits of investments in improving the reliability of the grid. We developed a new estimate based on publicly available information, and assessed how uncertainties in these data affect this estimate using sensitivity analysis.

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Recent catastrophic weather events, existing and prospective federal and state policies, and growing investments in smart grid technologies have drawn renewed attention to the reliability of the U.S. electric power system. Whether electricity reliability is getting better or worse as a result of these or other factors has become a material issue for public and private decisions affecting the U.S. electric power system. This study examines the statistical relationship between annual changes in electricity reliability reported by a large cross-section of U.S. electricity distribution utilities over a period of 13 years, and a broad set of potential explanatory variables including various measures of weather and utility characteristics.We find statistically significant correlations between the average number of power interruptions experienced annually by a customer and a number of explanatory variables including wind speed, precipitation, lightning strikes, and the number of customers per line mile. We also find statistically significant correlations between the average total duration of power interruptions experienced annually by a customer and wind speed, precipitation, cooling degree-days, the percentage share of underground transmission and distribution lines. In addition, we find a statistically significant trend in the duration of power interruptions over time-especially when major events are included. This finding suggests that increased severity of major events over time has been the principal contributor to the observed trend.Assessing Changes in the Reliability of the U.S. Electric Power System │ii AcknowledgmentsThe work described in this report was funded by the Office of Electricity Delivery and Energy Reliability, National Electricity Delivery Division of the U.S. Department of Energy (DOE) under Contract No. DE-AC02-05CH11231. The authors are grateful to David Meyer for his support of this research.We gratefully acknowledge a number of individuals who provided technical assistance, constructive advice, and/or encouragement at various points during this project: Amber Armentrout (Ventyx), William Morrow, Peter Cappers, Annika Todd, Liesel Hans, and Anna Spurlock (Lawrence Berkeley National Laboratory), Alex Hofmann, Mike Hyland (APPA), Marek Samotyj (EPRI), Bernard Neenan (Neenan Associates), Caitlin Callaghan, Rakesh Batra, and David Ortiz (DOE), Seth Blumsack (Pennsylvania State University), James Bouford (Quanta-Technology), Brett Efaw (Idaho Power), Larry Conrad (Conrad Technical Services), and John Weyant (Stanford University). We thank Dana Robson and Danielle Callaghan for their assistance with formatting the final version of the report and disseminating the results to interested stakeholders.Peter would like to thank the LBNL Tuition Assistance Program for indirectly supporting this research project. Finally, we are indebted to staff at the electric utilities and public utility commissions who shared reliability performance metrics and other insightful information with us in the early ...

This study examines the relationship between annual changes in electricity reliability reported by a large cross-section of U.S. electricity distribution utilities over a period of 13 years and a broad set of potential explanatory variables, including weather and utility characteristics. We find statistically significant correlations between the average number of power interruptions experienced annually and above average wind speeds, precipitation, lightning strikes, and a measure of population density: customers per line mile. We also find significant relationships between the average number of minutes of power interruptions experienced and above average wind speeds, precipitation, cooling degree-days, and one strategy used to mitigate the impacts of severe weather: the amount of underground transmission and distribution line miles. Perhaps most importantly, we find a significant time trend of increasing annual average number of minutes of power interruptions over time-especially when interruptions associated with extreme weather are included. The research method described in this analysis can provide a basis for future efforts to project long-term trends in reliability and the associated benefits of strategies to improve grid resiliency to severe weather-both in the U.S. and abroad.