Cost of power interruptions to electricity consumers in the United States (US)

The massive electric power blackout in the northeastern US and Canada on August 14–15, 2003 catalyzed discussions about modernizing the US electricity grid. Industry sources suggested that investments of $50–100 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 US 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.