Few would question the wisdom of electric-power distributors that invest in projects to reduce the duration of the power outages their customers suffer. Recent research, however, suggests that residential customers already find their service quite reliable. If this sentiment proves widespread, distributors may be able to reduce their total network investment while making other service improvements.

Distributors regularly undertake massive and costly projects to improve the reliability of their systems: moving cables underground for protection from the weather, rearranging network architectures so that each outage affects fewer households, and increasing the capacity of transformers (which dilute power from the grid for domestic use) to cope more successfully with peak demand. In many countries, regulators require dis-tributors to meet set targets for permissible power outages and impose hefty fines for those failing to do so. Even without such rules, many distributors, believing that fewer, shorter power outages must be their customers’ top priority, invest heavily in reliability programs. Over the past five years, for example, an Asian power company launched an extensive reliability effort, costing hundreds of millions of euros, to reduce the length of its annual service interruptions per customer from less than five minutes to less than two,...