Economic Impact Assessment of Severe Weather–Induced Power Outages in the US
Arkaprabha Bhattacharyya, Soojin Yoon, Makarand Hastak
Abstract
Every year power outages affect millions of people. In the US, historical data show that between 2000 and 2016, 75% of outages (in terms of duration) were caused by severe weather events. The National Association of Regulatory Commissioners has recently emphasized the importance of building electricity sector resilience in order to ensure long-term reliability and economic benefits for stakeholders. This study established a disaster impact assessment model to estimate economic losses due to severe weather–induced power outages in the US in terms of the nation’s gross domestic product (GDP). Economic losses were estimated the using extended version of Leontief’s input–output model with historical data from the US Bureau of Economic Analysis between 1997 and 2019. The study showed an estimated GDP loss of $11.6 billion (in 2019 values) due to 1% inoperability in the utility sector. These results can be used to (1) provide a range of investment and (2) justify the need for investment in long-term resilience planning in the utility sector. Furthermore, the results can be used to identify industries that are vulnerable due to inoperability in the utility sector.