Projecting Future Costs to U.S. Electric Utility Customers from Power Interruptions

This analysis integrates regional models of power system reliability, output from atmosphere-ocean general circulation models, and results from the Interruption Cost Estimate (ICE) Calculator to project long-run costs to electric utility customers from power interruptions under different future severe weather and electricity system scenarios. We discuss the challenges when attempting to model long-run costs to utility customers including the use of imperfect metrics to measure severe weather. Despite these challenges, initial findings show that discounted cumulative customer costs, through the middle of the century, could range from $1.5-$3.4 trillion ($2015) without aggressive undergrounding of the power system and increased utility operations and maintenance (O&M) spending and $1.5-$2.5 trillion with aggressive undergrounding and increased spending. By the end of the century, cumulative customer costs could range from $1.9-$5.6 trillion (without aggressive undergrounding and increased spending) and $2.0-$3.6 trillion (with aggressive undergrounding and increased spending). We find that, in some scenarios, aggressive undergrounding of distribution lines and increased O&M spending is not always cost-effective. We conclude by identifying important topics for follow-on research, which have the potential to improve the cost estimates of this model.