Southwest Power Outage Economic Cost Put At $100M

The Sept. 8 power outage that left southern California and parts of Arizona and Northern Baja Mexico without power could mean as much as $100 million in economic losses.

The National University System Institute for Policy Research said that businesses lost about $70 million, largely because they had to close. Overtime for government workers cost up to $20 million. The cost of spoiled food could amount to up to $18 million.

The Insurance Information Network of California acknowledged that estimates of total costs are between $80 million and $100 million, but no estimate of insured losses is available yet.

However, it could have been worse, the industry group pointed out.

‘To put it into perspective, the Northeast Blackout of 2003, which affected some 50 million customers in the U.S. and Canada was said to have cost $4 to $10 billion in economic losses and about $180 million in insured losses,’ said Pete Moraga, a spokesman for the Insurance Information Network of California. ‘The San Diego/Mexico outage affected about 7 million customers.’

Meanwhile the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corp. have launched a joint inquiry into the causes of the power failure. FERC is charged with oversight of reliability of the nation’s bulk power system.