Electric Power Interruption Cost Estimates for Individual Industries, Sectors, and the U.S. Economy

Abstract

Distributed energy resources (DER) have been promoted as the least-cost approach to meeting steadily increasing energy demand. However, it is unclear whether DER deployment can maintain or improve the electric power supply reliability and quality currently available to consumers. This report address two key factors relating to this question: 1) characteristics of existing power supply reliability, and 2) costs resulting from supply interruptions characteristic of the existing power grid. Interruption cost data collected by the University of Saskatchewan was used in conjunction with data generated by the Census Bureau’s Annual Survey of Manufacturers (Census Bureau, 1995), along with industry shares of gross domestic product (Bureau of Economic Analysis, 1995a) and gross output (Bureau of Economic Analysis, 1995b) to derive interruption cost estimates for U.S. industries at the 2-digit Standard Industrial Classification (SIC) level, as well as for broader sectors and the U.S. economy. Interruption cost estimates are presented as a function of outage duration (e.g., 20 minutes, 1-hour, 3-hour), and are normalized in terms of dollars per peak kW.