Huge costs incurred from electricity grid failures

A new report from the White House Council of Economic Advisers and the U.S. Department of Energy points out the huge costs that result from power outages caused by extreme weather events. The data show that between 2003 and 2012:

  • Weather-related outages are estimated to have cost the U.S. economy an inflation-adjusted annual average of $18 billion to $33 billion.
  • Roughly 679 power outages, each affecting at least 50,000 customers, occurred due to weather events. The aging nature of the grid – much of which was constructed over a period of more than one hundred years – has made Americans more susceptible to outages caused by severe weather.
  • In 2012, the United States suffered eleven billion-dollar weather disasters – the second-most for any year on record, behind only 2011.
  • Since 1980, the United States has sustained 144 weather disasters whose damage cost reached or exceeded $1 billion and seven of the ten costliest storms in U.S. history occurred between 2004 and 2012.

The report describes various approaches to modernization of the grid to reduce the frequency and severity of power outages. It notes that “Continued investment in grid modernization and resilience will mitigate these costs over time – saving the economy billions of dollars and reducing the hardship experienced by millions of Americans when extreme weather strikes.”

Power outage problems in many parts of Canada are almost certainly as severe as those in the United States yet the focus of much industrial and consumer advocacy has been to achieve the lowest possible power rates. As this report shows, scrimping on the maintenance of infrastructure can cause massive costs when system failures occur, substantially in excess of what infrastructure maintenance costs would have been.

A press release and a link to the full 28 page report Economic Benefits of Increasing Electric Grid Resilience to Weather Outages can be found at

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