The White House has just released a report The Economic Benefits of Increasing Electric Grid Resilience to Weather Outages that was prepared by the President’s Council of Economic Advisers and the Department of Energy’s Office of Electricity Delivery and Energy Reliability, with assistance from the White House Office of Science and Technology. 

The U.S. power grid connects more than 144 million customers over 450,000 miles of high voltage transmission lines to
5,800 major power plants with a total capacity of roughly a thousand GW. The grid not only supplies power to
residential, commercial and industrial customers, but 99 % of all U.S.
Department of Defense installations located within the United States
rely on the commercial electric grid for power.

Severe weather is the single leading cause of power outages in the
United States. Outages caused by severe weather  account for 58 percent
of outages observed since 2002 and 87 percent of outages affecting
50,000 or more customers. In all, 679 widespread outages occurred
between 2003 and 2012 due to severe weather.

Economic impact of outages caused by extreme weather events

It estimates that between 2003 and 2012
weather-related outages are estimated to have cost the U.S. economy an
inflation-adjusted annual average of $18 billion to $33 billion. But annual
costs fluctuate significantly from a high in 2008 of $40 billion to $75 billion to a low in 2007 of $5 to 10 billion.  The financial impact of outages includes lost output and wages, spoiled
inventory, delayed production, inconvenience and the cost of restarting industrial operation.

(In constant 2012 dolllars)

2012 $27 – $52 billion

2011 $19 – $36

2010 $13 – $25

2009  $8 – $14 

2008 $40 – $75

2007  $5 – $10

2006 $23 – $43

2005 $14 – $27

2004 $14 – $27

2003 $14 – $26

Aging transmission grid

Projected construction of transmission lines remains well below the rates experienced between 1960 and 1990. Seventy percent of the grid’s transmission lines and power transformers are now over 25 years old and the average age of power plants is over 30 years.

Climate change likely to increase extreme weather events

The IPCC and other scientific sources forecast the increased probablility of more severe hurricanes, winter storms, heat
waves, floods and other extreme weather events being the primary impact of global climate change.  The incidence of both major power outages and severe weather is increasing. Data from the U.S. Energy Information Administration show that weather-related outages have increased significantly since 1992.

Grid modernization (aka smart grid)

In June 2011, President Obama released A Policy Framework for the 21st Century Grid which set out a strategy for modernizing the electric grid. The initiative is aimed at applying smart grid technologies to increase the grid’s efficiency, reliability, and resilience.  This involves hardening the grid to make it less vulnerable to weather-related outages and recovery/reconstitution to reduce the time it takes to restore power after an outage occurs.