Electric utility valuations of investments to reduce the risks of long-duration, widespread power interruptions, part II: Case studies

Abstract

This is the second of two papers that study the economics of long-duration, widespread electric power interruptions (LDWIs) caused by extreme weather events in the U.S.A., and how utilities and regulators are evaluating measures to reduce the vulnerability of electricity infrastructure to such disruptions. In this paper, we review case studies of five jurisdictions in different U.S. states that experienced LDWIs over the past two decades, examining how these events have influenced utilities’ and regulators’ approaches to strengthening electricity infrastructure against potential future interruptions. We find that (i) most of the utilities do not estimate economic benefits of large-scale storm-hardening and other measures in terms of either avoided customer costs or regional economic impacts; (ii) the concept of ‘resilience’ plays little practical role in this type of decision-making; and (iii) institutional factors have a major influence on whether and how the economic benefits of storm-hardening and related measures are evaluated.