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Title: An insurance perspective on U.S. electric grid disruption costs

Abstract

Large yet infrequent disruptions of electrical power can impact tens of millions of people in a single event, triggering significant economic damages, portions of which are insured. Small and frequent events are also significant in the aggregate. This article explores the role that insurance claims data can play in better defining the broader economic impacts of grid disruptions in the U.S. context. We developed four case studies, using previously unpublished data for specific actual grid disruptions. The cases include the 1977 New York City blackout, the 2003 Northeast blackout, multi-year national annual lightning-related electrical damage and multi-year national line-disturbance events. Insured losses represent between 3 and 64 per cent of total loss costs across the case studies. Here, the household sector emerges as a larger locus of costs than indicated in previous studies, and short-lived events emerge as important sources of loss costs.

Authors:
 [1];  [2]
  1. Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
  2. Hartford Steam Boiler Insurance and Inspection Company, Hartford, CT (United States)
Publication Date:
Research Org.:
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
Sponsoring Org.:
Energy Analysis & Environmental Impacts; USDOE
OSTI Identifier:
1342541
Report Number(s):
LBNL-1006392
Journal ID: ISSN 1018-5895; ir:1006392
Resource Type:
Accepted Manuscript
Journal Name:
The Geneva Papers on Risk and Insurance. Issues and Practice
Additional Journal Information:
Journal Volume: 41; Journal Issue: 4; Journal ID: ISSN 1018-5895
Publisher:
Springer
Country of Publication:
United States
Language:
English
Subject:
24 POWER TRANSMISSION AND DISTRIBUTION; 29 ENERGY PLANNING, POLICY, AND ECONOMY; power outages; business interruptions; utilities

Citation Formats

Mills, Evan, and Jones, Richard B. An insurance perspective on U.S. electric grid disruption costs. United States: N. p., 2016. Web. doi:10.1057/gpp.2016.9.
Mills, Evan, & Jones, Richard B. An insurance perspective on U.S. electric grid disruption costs. United States. doi:10.1057/gpp.2016.9.
Mills, Evan, and Jones, Richard B. Wed . "An insurance perspective on U.S. electric grid disruption costs". United States. doi:10.1057/gpp.2016.9. https://www.osti.gov/servlets/purl/1342541.
@article{osti_1342541,
title = {An insurance perspective on U.S. electric grid disruption costs},
author = {Mills, Evan and Jones, Richard B.},
abstractNote = {Large yet infrequent disruptions of electrical power can impact tens of millions of people in a single event, triggering significant economic damages, portions of which are insured. Small and frequent events are also significant in the aggregate. This article explores the role that insurance claims data can play in better defining the broader economic impacts of grid disruptions in the U.S. context. We developed four case studies, using previously unpublished data for specific actual grid disruptions. The cases include the 1977 New York City blackout, the 2003 Northeast blackout, multi-year national annual lightning-related electrical damage and multi-year national line-disturbance events. Insured losses represent between 3 and 64 per cent of total loss costs across the case studies. Here, the household sector emerges as a larger locus of costs than indicated in previous studies, and short-lived events emerge as important sources of loss costs.},
doi = {10.1057/gpp.2016.9},
journal = {The Geneva Papers on Risk and Insurance. Issues and Practice},
number = 4,
volume = 41,
place = {United States},
year = {2016},
month = {10}
}

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Works referenced in this record:

US billion-dollar weather and climate disasters: data sources, trends, accuracy and biases
journal, February 2013


Large blackouts in North America: Historical trends and policy implications
journal, December 2009


Cost of power interruptions to electricity consumers in the United States (US)
journal, September 2006


Power-generation system vulnerability and adaptation to changes in climate and water resources
journal, January 2016

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