Ethan Miller, TXSES Research Associate – Policy and Government Affairs
One might think that after several years of recurrent issues with the stability of the electric grid, Texas would have established a standard system for valuing the cost of grid failures. Unfortunately, that is not the case. However, the Texas Solar Energy Society is proud to announce that it has begun the daunting task of estimating the cost of grid service interruptions to the Texas economy. Based on preliminary information from some municipal utilities, electric cooperatives, a handful of investor-owned utilities and generating retail electric providers, TXSES estimates service interruptions cost Texas at least $2B in losses in 2023. When complete, this data can be used to budget for grid reforms, save ratepayers money and increase grid reliability. To get an idea of what the final project will resemble, check out Local Solar for All’s The Economic Impact of Michigan’s Unreliable Power Grid.
TXSES calculates these costs using the Interruption Cost Estimate (ICE) calculator from Lawrence Berkeley Labs, Nexant, and the US Department of Energy. The ICE Calculator accounts for the direct costs of interruption (electricity that is generated that doesn’t hit the grid, etc.), as well as indirect costs based on FEMA formulas (cost of expired food, forgone work hours/business meetings, etc.). For the calculator to work properly, it needs measures of reliability like SAIDI (System Average Interruption Frequency Index); SAIFI (System Average Interruption Duration Index), and CAIDI (Customer Average Interruption Duration Index) scores, as well as customer counts, both residential and nonresidential. There is a maximum limit to the number of customers that can be run at one time using the calculator, so analysis has to be at a smaller scale. TXSES is using the scale of utilities (municipal utilities, co-ops, investor-owned utilities, and generating retail electric providers).
Currently, TXSES has acquired and compiled available data from the Energy Information Administration (EIA), the Public Utility Commission of Texas (PUCT), and Public Citizen. The EIA-861 forms report data from some municipal utilities and co-ops but the forms are limited in reporting on competitive markets. PUCT Dockets #54467 and #46735 provide SAIFI and SAIDI for some investor-owned utilities, but do not break down residential/nonresidential customer counts and are currently unusable. Public Citizen provides a list of all municipal utilities and co-ops in the state. While TXSES has neither complete data for the regulated nor unregulated markets, TXSES has a fuller view of data gaps within the regulated market. This is to say that while the current cost estimate is usable, it is far from complete and very likely a massive undervalue of full costs.
As TXSES continues working on this effort, be sure to follow along. Please reach out to Ethan Miller, at ethan@txses.org if you have any questions or are looking to get involved.