Power Outage Economics Tool: A Prototype for the Commonwealth Edison Service Territory

Estimates of the economic impact of widespread, long duration (WLD) power interruptions can be used to prioritize and justify significant investments in power system resilience. This report presents estimates of this type for WLDs originating within the Commonwealth Edison (ComEd) service territory. The intended audience for this research includes utility executives and technical staff, regulators, and government agencies.

This project involved surveying ComEd customers to understand how they might respond when confronted with a WLD power interruption. The research team used the survey responses to calibrate a state-of-the-art regional economic model (“POET”) to estimate economic impacts to households and 38 industry sectors across 17 impacted micro-regions (individual counties or aggregations of counties) within ComEd’s service territory and beyond. We ran one-day, three-day, and 14-day interruption duration scenarios each with varying geographic extents as well as estimated the benefits of deploying additional backup generation across the service territory.  The results were then compared to a “business as usual” scenario assuming that no interruption occurred. There are six key findings from this analysis:

• There may be significant losses to gross output (business revenue), gross domestic product, and household consumption during WLD interruptions, especially multi-day interruptions that occur across all of ComEd, Cook county, or the suburbs of Chicago.
• The wholesale trade and transportation sectors appear to be highly sensitive to power interruptions—losses to these sectors are large relative to the losses observed across the entire economy.
• Several sector-region combinations—e.g., the transportation sector in Cook county—are very sensitive to interruptions.
• High-income households experience proportionately larger losses to consumption during a one-day power interruption, but low-income households experience proportionately larger losses during the longest power interruptions.
• Increasing the amount of backup generation deployed across ComEd’s service territory provides significant net benefits to system-wide gross domestic product, gross output, and household consumption relative to the existing amount of backup generation already being used.
• Some micro-regions (e.g., Dekalb and Kendall counties), sectors (e.g., wholesale trade, transportation), and low-income households in Cook county may especially benefit from targeted resilience interventions.

We recommend that decision-makers consider running cost-benefit analyses using each of the economic metrics presented in this report independent of one another to evaluate the robustness of the insights that each of these estimates may provide. In addition to this report, we developed a tool that will allow ComEd staff and other decision-makers to visualize the full suite of results using an easy-to-interpret, user interface. We hope that the findings from this research effort will provide valuable insights to ComEd, policymakers across Illinois, and other stakeholders who have an interest in the resilience of the power system.