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Estimating what US residential customers are willing to pay for resilience to large electricity outages of long duration

Abstract

Climate-induced extreme weather events, as well as other natural and human-caused disasters, have the potential to increase the duration and frequency of large power outages. Resilience, in the form of supplying a small amount of power to homes and communities, can mitigate outage consequences by sustaining critical electricity-dependent services. Public decisions about investing in resilience depend, in part, on how much residential customers value those critical services. Here we develop a method to estimate residential willingness-to-pay for back-up electricity services in the event of a large 10-day blackout during very cold winter weather, and then survey a sample of 483 residential customers across northeast USA using that method. Respondents were willing to pay US$1.7–2.3 kWh–1 to sustain private demands and US$19–29 day–1 to support their communities. Previous experience with long-duration outages and the framing of the cause of the outage (natural or human-caused) did not affect willingness-to-pay.

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Fig. 1: Overview of the web-based elicitation survey.
Fig. 2: Distributions of the respondents’ preferences to sustain their critical electricity-dependent demands and their preference uncertainty, separated by their previous longest outage experiences.
Fig. 3: Heat-map representation of the respondents’ WTP-per-day preferences for enhanced grid resilience.
Fig. 4: Pyramid diagram showing the respondents’ preferences against LLD outages that occurred through two different causes.

Data availability

The data that is directly used for the statistical tests in the results section and for generating Figs. 24 and Tables 13 can be found in Supplementary Data. The complete datasets that support the plots and other findings of this study are available in the Open Science Framework project page, https://osf.io/ugvqh/.

Code availability

The R code file written for the data analysis is available in the Open Science Framework project page, https://osf.io/ugvqh/.

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Acknowledgements

The work was funded by the Center for Climate and Energy Decision Making through a cooperative agreement between the National Science Foundation (SES-0949710 and SES-1463492) and Carnegie Mellon University, Transmission Planning and Technical Assistance Division of the US Department of Energy’s Office of Electricity Delivery and Energy Reliability under Lawrence Berkeley National Laboratory contract no. DE-AC02–05CH1123, and by the Thomas Lord Chair, the Hamerschlag Chair and other academic funds from Carnegie Mellon University.

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Contributions

M.G.M. and A.L.D. secured project funding; S.B., A.L.D. and M.G.M. designed the study; J.P. and S.S. developed and demonstrated the online survey framework; S.B., J.P. and S.S. conducted pilot tests; S.B. and J.P. conducted online surveys; S.B. analysed the data and created the figures and tables with iterative feedback from A.L.D. and M.G.M.; S.B., A.L.D. and M.G.M. drafted and edited the manuscript.

Corresponding author

Correspondence to Sunhee Baik.

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Supplementary Information

Supplementary Figs. 1 and 2, Tables 1–10, Discussion, Method, Notes 1 and 2 and refs. 1–11.

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Supplementary Data

The data that are directly used for the statistical tests in the results section and were used to generate Figs. 24 and Tables 13 can be found in this file.

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Baik, S., Davis, A.L., Park, J.W. et al. Estimating what US residential customers are willing to pay for resilience to large electricity outages of long duration. Nat Energy 5, 250–258 (2020). https://doi.org/10.1038/s41560-020-0581-1

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