of more efficient distribution transformers.50 The committee estimates that T&D losses could potentially be reduced by as much as 10–20 percent, resulting in an efficiency improvement in the overall electric system of about 1–2 percent, which in turn would produce significant economic benefits.

Public Safety Benefits

The American Public Power Association reports that about 1000 fatalities and 7000 flash burns occur annually in the electric utility business (Trotter, 2005). Improved monitoring and decision-support systems would quickly identify problems and hazards. For example, the ability to identify equipment that is on the verge of failure is certain to save lives and reduce severe injuries. Also, the modern T&D system would need less maintenance, which means less exposure to accidents and increased safety of maintenance workers. In addition, by reducing the risk of long-term outages following terrorist attacks or natural disasters, modernization could help prevent public health and safety catastrophes.


It should be clear from the previous section that a modernized electric grid is very much in the nation’s best interest. The benefits would be substantial and quite likely to far outweigh the costs. Nevertheless, modernization is unlikely to happen unless it is also in the interests of those who must implement it.

Several barriers have the potential to impede this implementation. First, the technologies that utilities would employ to modernize the grid entail additional costs and uncertainties—particularly regarding how well they will work relative to older technologies. Second, some utilities may be reluctant to invest the additional funds required for modernization even when it would appear to make sense to do so. Third, there is a lack of regulatory and political support that could provide incentives for modernization. Finally, there is difficulty in communicating the need for modernization to the public and to regulatory and political decision makers.


In January 2010, a DOE standard will take effect requiring higher efficiency in all new distribution transformers. The DOE estimates that between 2010 and 2038 the energy saved by this measure will be equivalent to the energy used by 27 million households in the United States in a single year. Given the expected life of distribution transformers, 5 percent are expected to be replaced each year under this new standard (DOE, 2007).

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