Abstract
- Our results suggest that consumers would transfer some of the inherent risks of a blackout to the utility for a price lower than their willingness to pay to achieve their desired level of protection, creating economic value.
- The purchase of insurance would help most consumers avoid a complete loss of power. Our simulations show that of those households that would otherwise experience a complete loss of power, on average between 1% and 15% can fully cover their excess energy needs through insurance. Between 50% and 70% of these households are budget constrained but would still be able to partially cover their excess energy needs.
