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Power Companies Urged to Shield U.S. Electric Grid

Photographer: Kostas Tsironis/Bloomberg

Costs from outages are rising on the nation’s aging grid network, which includes more than 5,800 power plants and 450,000 miles of high-voltage power lines, according to the study from the White House and Energy Department. Close

Costs from outages are rising on the nation’s aging grid network, which includes more... Read More

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Photographer: Kostas Tsironis/Bloomberg

Costs from outages are rising on the nation’s aging grid network, which includes more than 5,800 power plants and 450,000 miles of high-voltage power lines, according to the study from the White House and Energy Department.

Power companies should be pressed by government to install technologies including smart meters and energy-storage devices to shield the electric grid from more frequent disruptions tied to weather, according to a study.

Severe weather, the primary cause of power failures in the U.S., cost the economy on average $18 billion to $33 billion a year from 2003 to 2012 when adjusted for inflation, according to the report today from the White House and Energy Department. The nation had 679 outages that each affected at least 50,000 utility customers in the decade, it said, without requiring action by the power industry.

“The number of outages caused by severe weather is expected to rise as climate change increases the frequency and intensity of hurricanes, blizzards, floods and other extreme weather events,” the study said.

Events in the past decade -- including Hurricane Katrina in 2005 and Superstorm Sandy in 2012 -- exposed vulnerabilities in the U.S. electric grid, the network of generator plants, transmission lines and technologies that distribute power across the nation. The report was released ahead of the anniversary of a power blackout, blamed in part on tree branches touching power lines, that swept the Northeast and parts of the Midwest into darkness on Aug. 14, 2003.

The report identified steps to improve reliability, including investment in storage devices tied to renewable-energy technologies; metering systems that can quickly pinpoint the location of outages; and use of so-called microgrids to isolate flaws without disabling the entire network. The 2009 U.S. economic stimulus law included $4.5 billion for grid-related investments, according to the study.

Utility Challenges

The report didn’t mandate actions by electric utility owners. As the U.S. attempts to encourage investment in the grid, companies including Exelon Corp. (EXC) of Chicago and Duke Energy Corp. (DUK) of Charlotte, North Carolina, are confronting other obstacles. They include U.S. regulations to limit greenhouse-gas emissions from power plants, a slowdown in nuclear-reactor construction resulting from a glut of natural gas, a competing fuel source, and persistent threats of cyber attacks.

Costs from outages are rising on the nation’s aging grid network, which includes more than 5,800 power plants and 450,000 miles (724,000 kilometers) of high-voltage power lines, according to the study.

Costs were also greatest in years of severe storms. Superstorm Sandy, which drenched parts of New York City in 2012, cost an estimated $65 billion and was the nation’s second-costliest tropical cyclone since 1900, according to the report. In 2008, when Hurricane Ike pummeled the Gulf Coast, weather-related outages cost the economy from $40 billion to $75 billion, it said.

From 2004 to 2012, the U.S. experienced seven of the 10 costliest storms, the study said. Last year, 11 U.S. weather-related disasters cost more than $1 billion, according to the report.

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editor responsible for this story: Steve Geimann at sgeimann@bloomberg.net

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