Storm Proofing Electric Grid Requires Doubling Electricity Bills: Would That Be Worth It?

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The massive outages in sweltering heat have triggered criticism of electric distribution utilities and another round of questioning why electric lines are not buried under ground.  The single biggest reason why electric customers lose service is weather caused damage to distribution lines.  Ice storms, wind damage, tree limbs falling all cause havoc with electricity service and can require days and even weeks to repair service to all customers.

No doubt burying all or most distribution or transmission lines would improve reliability of the electric service, but such improvement would require a doubling of electric bills.  The typical residential electric bill would jump from about 11 cents per kilowatt-hour to 20 cents or more per kilowatt-hour.

Indeed, following a massive storm in 2003, the North Carolina Public Utility Commission studied the possibility of burying electric lines and concluded it would raise electric bills by 125% and require $41 billion of investment and decades of work.

A typical residential customer in the US pays today an electric bill between $100 to $120 per month and so monthly bills would skyrocket to $200 to $240 or more to storm proof the electric grid.  Would that investment be worth it?

A lot of people dealing with 100 degree heat without electricity would say, "Yes, absolutely."  But $1,200 more for electricity would hit hard the pocketbooks of most families.

Moreover, a doubling of grid electric bills would turbocharge investment in solar, CHP, and other on-site generation technologies.  The grid today faces real competition and cannot price itself out of the market.

Finally, utility regulators must always vigilantly monitor the capital budgets of electric distribution utilities to make sure that they are investing appropriately in grid reliability.  The electric distribution utilities remain state-sanctioned monopolies everywhere in America, and their rates and the use of ratepayer money are typically regulated by government officials appointed for that purpose.

Since electric distribution customers have no choice or competition to protect them, utility regulators must provide smart, thorough oversight.  It is a critical and difficult function that requires judgment about how much to charge ratepayers to make the grid ever more reliable.  To date, regulators and utilities have judged that most customers have not been willing to double their electric bills in order to storm proof the grid.