Katrina and the Democratization of Energy
Center for Progressive Reform 2015-08-28
Summary:
Natural disasters such as Hurricane Katrina,[1] Superstorm Sandy,[2] and the typhoon that devastated Fukushima,[3] as well as technical weaknesses that caused the Northeast blackout in October 2003,[4] and regulatory failures that ended California electric industry restructuring efforts[5] share two commonalities. First, they all affect the energy system at enormous costs in economic losses and in disrupted lives.[6] Indeed, severe weather events are the leading source of electricity grid disturbances in the US with 679 widespread power outages between 2003 in 2012. Those outages have been estimated to cost the US economy between $18 and $33 billion each year during that decade.[7] Second, the economic and social costs of such disasters are so significant because the centralized structure of electricity generation and distribution guarantees concentrated losses upon such occurrences.