Today’s NY Times has a great article about the choices we face in whether we upgrade our power system to withstand storms or just continue to mop up afterward.
The CHP Express submerged power line would cost $2.2 billion to construct–using 100% private sector debt financing–and run 333 miles from Quebec to New York City using natural and manmade waterways as well as existing rail and transmission right of ways in between.
According to ConEdison’s CEO Kevin Burke, stormproofing our local grid is much more expensive than mopping up after a storm.
The utility estimates that burying its grid in NYC and Westchester would cost $40 billion. (Ironically, by 2017 the proposed CHP Express line would do exactly that–lie safely underground out of harm’s way. That’s why I mention it here: The private sector will fund undergrounding of major transmission infrastructure.)
The post-Sandy clean up may cost ConEdison about $450 million–far less than hardening its infrastructure against future storms.
After the worst storms, the government often helps to pay for the clean up, and–in addition–allows the utility’s costs to be recovered through rate increases in subsequent years. Either way, we rate payers pay.
The Times estimates our electric rates will rise 3% for three years to pay for the post-Sandy power line clean up alone.
So, why shouldn’t utilities just mop up now and continue to sit tight for the next storm?
Because the actual cost of a major outage may 50 times higher than that of the lost electricity, according to a recent report from the National Academy of Sciences.
As we all know, the actual cost of power outages goes well beyond restoring the power. To include the societal cost, we have to include the regional economic impact of lost business, destroyed inventory, and non-utility damage recovery costs, such as local public works and first responders turning out for ‘downed lines’ calls.
When we take the full cost of blackouts into account, more proactive investment in local energy resiliency is a no-brainer.