Severe weather, power outages, and a decision to improve electric utility reliability [electronic resource]
Keywords: Management Science and Engineering.

Several studies have quantified the annual cost of United States power outages, with estimates ranging from tens to hundreds of billions of dollars. Despite the critical importance of reliable electricity to the economy, there has been little or no research conducted at the national level to determine if reliability is getting better or worse over time. The econometric model presented in this dissertation is the most comprehensive assessment of national reliability trends ever conducted. There has also been a general shortfall of peer-reviewed literature identifying methods to estimate the costs and benefits of strategies employed by utilities to improve reliability. This dissertation systematically evaluates the factors that affect the reliability of the U.S. power system and introduces—for the first time—an analysis framework to estimate the costs and benefits of implementing one strategy to improve reliability: undergrounding power transmission and distribution lines. It is shown that U.S. power system reliability is generally getting worse over time, due in large part to impacts associated with increasingly severe weather. Undergrounding transmission and distribution lines can be a cost-effective strategy to improve reliability, but only if certain criteria are met before the decision to underground is made. This dissertation begins with an econometric analysis of the factors that are correlated with both the total minutes and frequency of power outages at nearly 200 utilities over a thirteen-year period. A number of factors were considered, including weather (temperature, precipitation, lightning, wind speed); transmission and distribution operations and maintenance (O& M) spending; electricity sales; customers per line mile; the installation of outage management systems; and the share of underground line miles. Part Two surveys the literature on value-based reliability planning and concludes with results from a simple expert-elicitation exercise designed to evaluate the hypothesis that utility outage cost surveys may be inaccurate in their assessment of the aggregate value of lost load. Part Three introduces a general method to quantify the costs and benefits of undergrounding electricity infrastructure—a strategy that has been linked to improved reliability. Some researchers have found that the costs, in general, of undergrounding electric utility transmission and distribution (T& D) infrastructure far exceed the benefits from avoided outages. To test this finding, an infrastructure lifecycle simulation model is developed in order to evaluate the costs and benefits of undergrounding as existing overhead lines reach the end of their useful life. A number of impact categories are considered, including costs due to infrastructure replacement/conversion; changes in worker health and safety risk; and environmental restoration. Benefits from reduced power outages and increased property values are also considered as part of the cost-benefit framework. Part Four refines the undergrounding model for a specific utility, Cordova Electric Cooperative, which has spent the last forty years converting overhead lines to underground lines. An ex-post analysis of Cordova Electric Cooperative is conducted to determine if the benefits of undergrounding exceeded the costs. Initial and subsequent undergrounding model configurations highlight key criteria that must be met before policymakers should require that T& D lines be undergrounded. A short discussion follows on aspects of this study that should be taken into consideration when interpreting the results and additional research topics that should be explored in future analyses.