Office of Electricity

Valuing the Benefits of Utility Investments in Power System Reliability and Resilience

July 31, 2018

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At the Office of Electricity (OE), I am focused on providing leadership on a national level to modernize the electric grid, enhance the security and reliability of our energy infrastructure, and facilitate recovery from disruptions to the energy supply both domestically and abroad. This is critical to meeting the Nation’s growing demand for reliable electricity by overcoming the challenges of our Nation’s aging electricity transmission and distribution system and addressing the vulnerabilities in our energy supply chain.

One of the key challenges involves assisting utilities and their regulatory counterparts with valuing the benefits of power system reliability and resilience. Simply put, accurate estimates of the costs of power outages allows utilities and regulators to assess the benefits to customers from new investments that modernize and secure the grid. 

I am pleased to announce the release of two OE-sponsored research products that provide timely assistance for this electric utility planning challenge. These research products, which were developed in a public-private partnership (Lawrence Berkeley National Lab and Nexant), are the Estimating Power System Interruption Costs: A Guidebook for Electric Utilities and the Interruption Cost Estimate (ICE) Calculator 2.0.

A significant benefit stream from any reliability or resilience investment is the avoided customer interruption costs that result from a reduction in power outage occurrence and/or duration. The Guidebook provides electric utility staff with easy-to-follow steps in how to conduct customer interruption cost studies. The Guidebook is intended to serve as a reference for utility personnel, policymakers and experts in survey design and administration who may be planning to implement customer power interruption cost studies. This document brings the utility industry up-to-date using modern survey technologies, practices, and data analytics to estimate customer interruption costs and, ultimately, use the estimates to address both traditional and emerging electric utility planning needs.

The ICE Calculator, which was first released in 2011 and has now been completely redesigned, is an online tool for electric reliability planners at utilities, government organizations, and other stakeholders interested in estimating power interruption costs and the benefits associated with improvements in reliability and resilience. The Calculator estimates the costs of power outages—lasting up to 24 hours—for residential, commercial, and industrial customers located across the country. Many utilities have already used the Calculator to value the benefits of grid modernization investments, including Pepco, EPB of Chattanooga, and Central Maine Power. The upgraded version include a more user-friendly and intuitive interface, the ability to save and download results into commonly-used formats, and the flexibility to incorporate updates to the underlying data for many years to come. Looking ahead, OE is evaluating additional enhancements to the tool to further improve the accuracy of the customer interruption cost estimates, including creating the ability to estimate customer interruption costs for outages lasting longer than 24 hours.

We are always interested in hearing from our stakeholders about their experiences with tools and technologies that we are investing in. If you anticipate using the Guidebook or the ICE Calculator, please let us know how and why you expect to use them by contacting Rakesh Batra (rakesh.batra@hq.doe.gov) in OE’s Transmission Permitting and Technical Assistance Division.