GAO report on electric grid geomagnetic disturbances

A report released by the U.S. Government Accountability Office found that U.S. and Canadian electricity suppliers have taken steps to prepare for potential electromagnetic disruptions to the electric grid such as from solar storms or high-altitude nuclear detonations -- but that more research is needed on both geomagnetic disturbances and high-altitude electromagnetic pulses.

Under some circumstances, a severe solar storm or high-altitude nuclear blast could damage the U.S. electric grid and potentially cause extensive outages. Federal energy regulators have used both regulatory and more informal collaborative approaches to address the threat to the electric grid posed by electromagnetic pulses and geomagnetic disturbances. Regulatory approaches to electromagnetic disturbance readiness include mandatory reliability standards adopted by electric reliability organization NERC, which require some electricity suppliers to assess their vulnerability to extreme solar storms, and developing procedures for responding to grid security emergencies.

In this context, the Government Accountability Office was asked to review electricity industry actions to prepare for and mitigate electromagnetic risks. Its 95-page report, Critical Infrastructure Protection: Electricity Suppliers Have Taken Actions to Address Electromagnetic Risks, and Additional Research is Ongoing, examines topics including the degree to which U.S. and Canadian electricity generation and transmission owners and operators have identified information about the effects on the grid caused by geomagnetic disturbances and high-altitude electromagnetic pulses (HEMP), steps some suppliers have taken to protect against GMD and HEMP, and opportunities for U.S. suppliers to recover costs for protecting against GMD and HEMP.

According to the report, there is "general agreement that more research is needed on both GMD and HEMP." Risks identified include potential voltage instability leading to collapse of the bulk power system and blackouts, as well as possible damage to key system components. But more information is needed, according to the report -- especially on HEMP effects, given that previous studies have focused on impacts to military equipment as opposed to the commercial electric grid.

The cost of addressing reliability concerns can be significant. The GAO report describes some suppliers' reports "that costs they have incurred to protect against GMD and HEMP have been relatively small so far and they expect to recover those costs through customer rates." But the report warns that suppliers could face future increased costs, as a second regulatory standard phases in through 2022. For example, the report cites one supplier serving about 4.5 million retail customers as estimating "the cost of hardening a planned control center against HEMP to be at least $10 million." GAO calculated that fully passing this cost on to customers in a single year would add $2 to the average customer ’s electric bill for that year.

While regulated U.S. suppliers may be able to recover GMD protection costs through rates, the report notes that recovery is less certain for protection against HEMP because less is known about HEMP risks. The report also presages challenges for any kind of reliability-driven cost recovery for independent owners of power plants, who must recover reliability improvement costs through their sales of electricity without assurances about market prices.