Power Interruptions Could Cost U.S. 80 Billion Annually

Electric power outages and blackouts cost the U.S. an estimated $80 billion a year, according to a new study conducted by researchers at the Lawrence Berkeley National Laboratory in Berkeley, Calif. Researchers found that momentary interruptions have a bigger impact on the total cost of power problems than longer, less-frequent incidents.

The authors of the report, "Understanding the Cost of Power Interruptions to U.S. Electricity Consumers," say they hope their data will help planners balance the estimated costs of upgrades to the nation's electrical grid. They say the Northeast blackout of 2003 drew their attention to the topic.

"Immediately after the blackout, there were calls for investments to modernize the grid, ranging from $50 and $100 billion," says researcher Kristina Hamachi-LaCommare, a staff scientist in the lab's Environmental Energy Technologies Division. "We wanted to add a key missing piece of information to these discussions, namely the value these investments might bring."

Hamachi-LaCommare and co-author Joe Eto drew their data from three sources: surveys on the value electricity customers place on uninterrupted service; utility information on power interruptions; and U.S. Energy Information Administration information on the number, location and type of U.S. electricity customers.

Of the estimated $80 billion price tag for power interruptions, the study estimates $57 billion results from losses in the commercial sector and $20 billion from losses among industrial customers (residential customer losses total an estimated $1.5 billion, the researchers say).

However, the two researchers note that gaps in existing data could mean actual costs are higher or lower than their current estimates. Their report calls for a national effort to collect better information to enable a true cost-benefit analysis of grid-modernization plans.