Publications
Performance Metrics to Evaluate Utility Resilience Investments
In 2019, Sandia National Laboratories (Sandia) contracted Synapse Energy Economics (Synapse) to research the integration of community and electric grid resilience investment planning as part of the Designing Resilient Communities (DRC): A Consequence-Based Approach for Grid Investment project. Synapse produced a series of reports to explore the challenges and opportunities in several key areas, including benefit-cost analysis (BCA), performance metrics, microgrids, and regulatory mechanisms. This report focuses on BCA. BCA is an approach that electric utilities, electric utility regulators, and communities can use to evaluate the costs and benefits of a wide range of grid resilience investments in a comprehensive and consistent way. While BCA is regularly applied to some types of grid investments, application of BCA to grid resilience investments is in the early stages of development. Though resilience is increasingly cited in connection with grid investment proposals and plans, the resilience- related costs and benefits of grid resilience investments are typically not fully identified, infrequently quantified, and almost never monetized. Without complete assessments of costs and benefits, regulators can be hesitant to approve some types of grid resilience investments. This report provides the first application of the framework developed in the 2020 National Standard Practice Manual for Benefit-Cost Analysis of Distributed Energy Resources (NSPM for DERs) to grid resilience investments. We provide guidance on next steps for implementation to enable grid resilience investments to receive due consideration. We suggest developing BCA principles and standards for jurisdiction-specific BCA tests. We also recommend identifying the resilience impacts of the investments and quantification of these impacts by establishing utility performance metrics for resilience. Proactive integration of grid resilience investments into existing regulatory processes and practices can increase the capacity of jurisdictions to respond to and recover from the consequences of extreme events. 1 National Energy Screening Project. 2020. National Standard Practice Manual for Benefit-Cost Analysis of Distributed Energy Resources.