Valuing Reliability Benefits of Utility Infrastructure Investments

Nov 18, 2018

Electric utilities face the challenge today of meeting our nation’s growing demand for reliable electricity while overcoming the problems posed by an aging grid and addressing the vulnerabilities of the energy supply chain. A critical part of this challenge is the ability to value the benefits of power system reliability such that utilities and regulators can compare these benefits to the costs of infrastructure investments to modernize and secure the grid.

Nexant recently completed two research products in partnership with Lawrence Berkeley National Laboratory (LBNL)—and sponsored by the U.S. Department of Energy Office of Electricity (OE)—to help address this challenge. The research products are Estimating Power System Interruption Costs: A Guidebook for Electric Utilities and the Interruption Cost Estimate (ICE) Calculator 2.0. Bruce J. Walker, the OE Assistant Secretary, recently announced the release of these products in a blog post.

Guidebook for Electric Utilities

A significant benefit from any reliability investment is the avoided customer interruption costs (CICs) from reducing the frequency and/or duration of power interruptions. The Guidebook provides a set of easy-to-follow steps for conducting CIC studies. It is intended to serve as a reference for utility personnel, policymakers and survey experts who may be planning to implement a CIC study. This document brings the utility industry up-to-date using modern survey technologies, practices, and data analytics to estimate customer interruption costs and, ultimately, to use the estimates to perform cost-benefit analyses of potential investments.

The ICE Calculator, which was first released in 2011 and has now been completely redesigned, is a free 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 uses the results from previous CIC studies to estimate the costs of power outages—lasting up to 24 hours—for residential, commercial, and industrial customers located across the country. Users enter specific parameters (customer type and geographic location), reliability changes (SAIFI, SAIDI, and CAIDI) and the timeframe over which the changes will occur to obtain the estimates.

ICE Calculator

The upgraded ICE Calculator includes a more user-friendly interface, the ability to obtain results in more 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.

For more information, contact Myles Collins.