Market-based Estimation of Average Electricity Outage Costs in the United States

Chi Keung Woo, A. Tishler, Kang Hua Cao, Han Qi, Raymond Li, Jay Zarnikau

Research output: Contribution to journalReview articlepeer-review


Electricity outage cost (EOC) estimates ($ per kWh unserved) are essential input data for optimal reliability planning and efficient pricing of electricity services. Based on the 2019-2020 market data published by two US government agencies for the lower 48 states, this paper’s EOC estimates by census region and year are median values of $1.39 to $2.93 per kWh unserved, well below the estimate of $9 per kWh unserved adopted by Texas for optimal reliability planning. The policy implications of adopting our lower EOC estimate are (a) a reduction in an electric grid’s optimal planning reserve to improve the grid’s cost efficiency; and (b) a decline in the grid’s marginal cost-based retail price to encourage welfare-enhancing end-use consumption.

Original languageEnglish
Pages (from-to)1-5
Number of pages5
JournalEnergy Research Letters
Issue number2
Publication statusPublished - May 2024


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