| Resource Type | Toolkit |
| Author / Source | EPRI (Climate READi) |
| Publication Date | Ongoing |
| Location | United States |
| Initiative Type | Program, Policy |
| Project Complexity | Advanced |
| Recommended For | Staff, Board |
Estimated reading time: 30+ minutes
Why This Matters for Rural Electric Co-ops
Resilience projects like undergrounding or pole hardening are costly, and their payoff only shows up when a major storm or fire hits. This EPRI guide walks through a six-step Cost-Benefit Analysis (CBA) that turns those uncertain, long-term benefits into dollar figures a board can compare against the upfront investment.
A co-op can use it to build a defensible case before committing capital, choose which benefits to count (avoided repairs, member outage costs, safety, equity), and test how the discount rate changes the answer. It also points to free federal tools for valuing outages, such as the ICE Calculator and the Customer Damage Function Calculator, which helps co-ops without in-house economists get started.
Key Takeaways
| › | The process runs in six steps: scoping, lifecycle costs, benefit selection, monetization, discounting, and comparing net benefits or benefit-cost ratios. |
| › | The best project is not always obvious. One option may have a higher benefit-cost ratio while another delivers higher total net benefits. |
| › | Most outage cost tools, including the ICE Calculator, cover interruptions under 24 hours, so valuing long outages from major events often requires extrapolation. |
| › | Discount rate choice can swing results. Testing both a cost-of-capital rate (often 5 to 8%) and a lower societal rate shows how sensitive a decision is. |
| › | Performing a Cost-Benefit Analysis sits within EPRI's broader Investing for Climate Resilience in the Power System site, which also covers scoping, risk modeling, and a multi-criteria alternative. |
Implementation Considerations
- Regulatory or Governance Considerations: Benefits must be counted carefully to avoid double counting across safety, health, and equity. Boards should agree up front on whose benefits matter (the co-op, members, or the wider community), since that choice shapes the result.
- Staffing or Technology Requirements: A full analysis requires historical cost data, outage data, event probabilities, and economic modeling skills. Smaller co-ops may need consultant support, help from their G&T, or shared regional resources.
- Time-Sensitive Information: The guide describes the Power Outage Economics Tool (POET) as under development. Berkeley Lab has since published results from it, so check its current availability. The Customer Damage Function Calculator is now attributed to NREL/NLR (U.S. Department of Energy).
Notable Examples
- Lawrence Berkeley National Laboratory: Interruption Cost Estimate (ICE) Calculator, a survey-based tool widely used to value avoided customer outage costs.
- NREL/NLR (U.S. Department of Energy): Customer Damage Function Calculator, which estimates outage costs for critical facilities.
- Texas-New Mexico Power (TNMP): Resilience study by 1898 & Co. that extended ICE Calculator values to cover longer outages.
- Scottish and Southern Electricity Networks: Transmission Cost-Benefit Analysis methodology that counts hard-to-quantify benefits like biodiversity, visual impact, and lifecycle carbon.
- Federal Emergency Management Agency (FEMA): BCA Toolkit, a benefit-cost template that includes loss-of-service estimates for facilities.
- Sandia National Laboratories: Social Burden Method for measuring how outage hardships differ across communities.
Estimated reading time: 30+ minutes
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