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

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 addresses 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 United States Department of Energy’s Annual Survey of Manufacturers, along with industry shares of gross domestic product (GDP) and gross output to derive interruption cost estimates for U.S. industries at the 2-digit Standard Industrial Classification (SIC) level. 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.