Paper Outlines Approaches To Valuing Resilience

by Peter Maloney
APPA News
February 28, 2022

A new paper by the National Association of Regulatory Utility Commissioners (NARUC) the National Association of State Energy Officials (NASEO), and Converge Strategies that details approaches to estimating the value of resilience.

The paper, Valuing Resilience for Microgrids: Challenges, Innovative Approaches, and State Needs, summarizes new approaches to valuing resilience that can be used by utilities and regulators and applied to proposed investments in microgrids and other resources.

While reliability has been measured for decades using widely accepted metrics, resilience, utilities, policymakers, and regulators have not agreed upon a universal definition of resilience.

In 2013, NARUC proposed a definition of resilience for state utility regulators and the White House released a definition focusing on critical infrastructure protection.

In 2018, the Federal Energy Regulatory Commission put forward a definition. And in 2019 the National Renewable Energy Laboratory provided a definition that highlighted the importance of multi-stakeholder planning. To fill in the gaps, state regulators have also stepped in to provide their own definitions of resilience.

Although the definitions overlap, they differ in scope and specificity even though resilience has emerged as an important concept as utilities invest billions of dollars to strengthen generation, transmission and distribution infrastructure in the face of high-impact, low-frequency events, including extreme cold, droughts, heat waves, and cyber and physical attacks, the paper’s authors said.

“Developing tools and methods to accurately assess the costs and benefits of resilience investments is a critical step toward the goal of mitigating the impacts of outages on customers and society,” the paper said.

Traditionally, utility expenditures have been guided by “imprecise approaches that fail to account for the impacts of outages or anticipate” high impact low frequency events, the paper said. However, new approaches to analyzing the costs and benefits of resilience investments, such as microgrids, can enable more efficient use of ratepayer and taxpayer resources to deliver better outcomes, according to the paper.

In an effort to share practices and find common ground, state energy policymakers and regulators joined the NASEO-NARUC Microgrids State Working Group to explore benefits and costs of microgrids, identify challenges and barriers to microgrid development, and to share successful approaches.

And while the NARUC-NASEO paper was written with Microgrids State Working Group members in mind, the authors said it may be useful to utilities, emergency management agencies, community development organizations, municipal governments, and other stakeholders.

Specifically, the NARUC-NASEO paper summarized five new and pending resilience valuation approaches developed by Lawrence Berkeley National Laboratory; the Edison Electric Institute and Commonwealth Edison; the National Renewable Energy Laboratory; Sandia National Laboratories and the University of Buffalo; and the Federal Emergency Management Agency.

NARUC and NASEO said they would continue “to promote sharing of knowledge across states and innovative approaches to common challenges in forums such as the NASEO-NARUC Microgrids State Working Group.”

“Future research may provide updates on resilient microgrid approaches in progress and on lessons learned from initial deployments,” the authors said.