Frontiers in the Economics of Widespread, Long-Duration Power Interruptions: Proceedings from an Expert Workshop

The costs to electric utility customers from short-term, limited geographic-scale power disruptions have been studied for many years. However, there is increasing interest among regulators, policy-makers, and utilities in developing and implementing methods for analyzing interruptions that are of longer duration (days, weeks, or longer) and of a larger geographic scope (entire metropolitan areas or regions which may extend across multiple service territories). A 2017 report from the U.S. National Academies of Sciences, Engineering, and Medicine indicated the importance of “develop[ing] comprehensive studies to assess the value to customers of improved reliability and resilience…during large-area, long-duration blackouts.” 

As a contribution toward fulfilling this recommendation, the U.S. Department of Energy’s (DOE) Office of Electricity’s Transmission Permitting and Technical Assistance Division, in partnership with Lawrence Berkeley National Laboratory (LBNL), convened a workshop to identify research needs and discuss potential avenues for methodological advances in the economics of widespread, long-duration power interruptions. The workshop was organized around six key themes in the economics of widespread, long-duration interruptions. LBNL conducted a competitive solicitation for white papers on these themes, and the authors selected were leading experts in academia, industry, and the non-profit sector. They were tasked with assessing the state of knowledge on particular topics, and identifying research needs and promising directions to expand it. These topics included definitions of resilience and reliability; regional economic modeling approaches; uncertainty quantification; data challenges and opportunities; contingent valuation survey techniques; and reduced-form analytical tools for assessing the impacts of power interruptions of this scale. 

The authors of the six white papers presented their findings at the workshop, titled “Frontiers in the Economics of Widespread, Long-Duration Power Interruptions,” and held in Washington, D.C., on March 6, 2018. Each paper was the subject of its own session, with the presentations followed by comments by assigned discussants, and in turn a general discussion of the papers, their findings, and the issues they raised. In addition to the authors, discussants, and LBNL and DOE staff, the workshop participants comprised government, industry, and academic thought leaders from across the country.