Annual Cost of Power Interruptions Estimated at $80 Billion Maybe

In the wake of 2003's Northeast blackout, researchers have focused their attention on investing to improve the grid, but a new study asserts that more information is needed before people start reaching into their pocketbooks. Researchers Kristina Hamachi-LaCommare and Joe Eto of the Lawrence Berkeley National Laboratory report that electrical power outages and blackouts cost the nation about $80 billion a year, but they caution that a lack of information makes it difficult to be completely sure.

Using the best available data, the researchers estimate that the commercial sector accounts for $57 billion of the approximate $80 billion worth of annual losses, the industrial sector accounts for roughly $20 billion, and residential accounts for $1.5 billion. However, uncertainties in the available data on power interruptions could mean the true costs of interruptions could be higher or lower by tens of billions of dollars, the researchers say. “Given the high stakes involved in decisions regarding who should invest how much to improve the grid, it's imperative that we rely on the best possible information on one of the key expected benefits from these investments, namely improvements in electricity reliability,” Eto says. The researchers have called for a national effort to collect better information on these costs; they recommend that the utility industry and its regulators expand the collection of data on power interruptions and power quality.