Costs v. Benefits
Ken Costello serves as principal researcher for energy and environment at the National Regulatory Research Institute. Costello previously worked for the Illinois Commerce Commission, the Argonne National Laboratory, Commonwealth Edison Company, and as an independent consultant.
The presumption among industry observers is that the resiliency of the U.S. electric power sector is deficient. If industry spends additional monies on improving its resiliency, the benefits should outweigh the costs.
We are seeing a hard push at the federal, state and local levels to bolster the resiliency of electric power, even if it costs a substantial amount of money. The thinking is that the benefits are too large to ignore.
This sentiment derives largely from four sources: More severe weather, a growing threat of cyber-attacks, higher reliance on electricity by society, and consumer expectations of higher quality electric power service. These all have increased the value of a resilient electric system.
One factor that could contribute to deficient resiliency is the public-good aspect of the benefits. Actions taken by a single power operator inevitably improve other operators' resiliency. The interconnection of grid systems is the main reason. Consequently, leaving it up to individual power operators to determine the level of resiliency would result in a deficiency from a societal perspective.
Electric service interruptions of long duration and wide-area impact certainly have received prominent media coverage, which aggravates the loud cries from different quarters for improved resiliency. Customers, the media and the public have judged utilities more critically in recent years on how they respond to disasters.