The Cost of Wildlife-Caused Power Outages to California's Economy

Publication Number: CEC-500-2005-030
Publication Date: February 2005
PIER Program Area: Energy-Related Environmental Research

The executive summary, abstract and table of contents for this report are available below. This publication is available as an Adobe Acrobat Portable Document Format Files. In order to download, read and print PDF files, you will need a copy of the free Acrobat Reader software installed in and configured for your computer. The software can be downloaded from Adobe Systems Incorporated's website.

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Executive Summary

Introduction

It is a well-known problem that wildlife can inadvertently cause power outages by contacting exposed electrical equipment. The costs of this problem to the State of California, however, are unknown; therefore, it is useful to estimate its economic scope. This report provides an initial estimate of the costs of wildlife-caused power outages to California's economy, and offers suggestions on how to improve this estimate.

Purpose

The purpose of this research is to assess the economic impact of wildlife-caused electricity outages to California's economy.

Methods

This research employed publicly available data to generate estimates of the cost of unserved energy to electricity customers and the costs of electricity service restoration. Researchers generated costs for each major investor-owned utility (IOU) and summed these with extrapolated non-IOU costs to generate statewide values. They examined a base case, a low case, and a high caseŅeach of which make varying assumptions about which customers are principally affected by a wildlife-caused outage and its economic impact. From these assumptions, they determined the average energy use of the affected customer, and the average value of unserved kilowatt-hours to calculate the results.

Results

The total cost of wildlife-caused power outages for California ranges from $32 million to $317 million per year, with a base case value of $34 million. Because different customers use varying amounts of energy, and value that energy to varying degrees, the total cost of wildlife-caused outages critically depends on the assumptions one makes about the average affected customer.

Conclusions

Though the range of estimates is large, researchers believe that their base case estimate, $34 million, offers the most accurate initial assessment of the cost of wildlife-caused power outages to California's economy. The accuracy of these estimates could be improved with better information about which customers are affected by wildlife caused outages, where these outages occur along the transmission and distribution (T&D) system, and the economic effects of power quality disturbances. The value of service (VOS) data for different customers developed by the IOUs also ranges widely, which is reflected in our results.

This research did not consider the value of lost wildlife because: (1) researchers lacked statewide data on which species are maimed and/or killed by wildlife-power line interactions, and (2) even with the number of each species killed, they lack an assessment of the value of an individual animal.

Recommendations

California should begin to evaluate its current wildlife-power line interaction mitigation programs in terms of costs and benefits. This report provides insight into the economic costs of the problem at a statewide level. Its numbers may be updated in the future with improved data; however, the report already reveals which types of customers experience the greatest economic losses because of wildlife-caused power outages. This information can be used to target mitigation efforts.

The VOS data offered by utilities varies widely. Improved estimates of the value that various customers place on their electricity service would enable a more accurate calculation of the financial burden of outages caused by wildlife. This calculation would also be aided by data on which customers are affected by wildlife-caused outages and where these outages tend to occur along the T&D system. Lastly, future assessments could include estimates for the value of lost wildlife if they had data on which species tend to be injured or killed by power line interactions across the state.

Electric utilities are best situated to collect the needed data because they must address each outage as it occurs. Yet there is no incentive for them to rigorously collect and disseminate this information. Electric utilities currently face the risk of severe fines for avian deaths caused by their equipment. As a result, the utility programs to address these incidents are not vetted publicly in terms of the costs spent and reductions in mortality achieved over time. From the perspective of monitoring progress of this problem, a better approach would be to establish standards for design, siting, and maintenance of utility equipment with respect to wildlife-mortality, and eliminate the threat of severe fines on equipment that follows this standard.

Lastly, it must be clearly understood that though precious wildlife are often killed by interactions with power lines, the value of a lost animal is very hard to quantify in economic terms. This does not mean that these losses should be disregarded. If the state would like to include estimates of the value of lost wildlife in future assessments of this nature, it could sponsor research to more accurately estimate the value of a given individual bird or animal.

Benefits to California

By offering a rigorous economic analysis of the problem of wildlife-powerline interactions, this report can serve to improve the cost-effectiveness of programs to mitigate this problem. This may serve to reduce costs paid by electricity ratepayers in the state, as well as prevent the unnecessary loss of precious wildlife.

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Abstract

The report details the cost of wildlife-caused electricity outages to California's economy, and provides an estimate of benefits needed to evaluate the economic effectiveness of its mitigation programs.

This assessment considers the value of unserved energy caused by wildlife-power line interactions and the electricity service restoration costs following such events. Researchers used publicly available data from utilities and the economics literature to calculate costs within each of the three major investor-owned utilities (IOUs), then extrapolated values for non-IOUs, and summed to find statewide values.

Beyond offering an initial estimate of the annual costs of wildlife-caused power outages ($32 million to $317 million per year), this report also contributes a theoretical framework for future assessments and offers suggestions for how to improve this estimate. It offers a thorough discussion of value of service estimation methods and a survey of the studies relevant to California customers.

The report concludes that addressing the institutional barriers and misaligned incentives between utilities and their regulators that currently discourage or preclude a more accurate assessment of this problem's financial impact will allow future efforts to better estimate the costs of wildlife-caused outages. This will allow the state to better evaluate the costs and benefits of current programs.

Keywords: wildlife-caused power outages, wildlife-power line interactions, electricity outage, value of service, cost estimation, avian mortality, raptor mortality, cost assessment methodology

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Table of Contents

Preface

Executive Summary

1.0 Overview

2.0 Approach

3.0 Customer Outage Costs

4.0 Empirical Implementation

5.0 Conclusion

6.0 References

7.0 Glossary

Appendix A: Computation Details


List of Tables

Table 1. Residential customer outage cost in 2004 $/kWh unserved in California, except for momentary outages

Table 2. Comparison of the estimates in $ per outage event

Table 3. California nonresidential customer outage cost in 2004 $/kWh unserved

Table 4. Comparison of the estimates of $ per outage event

Table 5: Cost of wildlife-caused outages to California*