Adequate interruption cost assessment in a quality based regulation regime

Abstract

Balancing cost-effectiveness and quality of service is one of the most important tasks for network companies in the deregulated environment. It is widely recognized that interruption costs is a relevant expression for the inconvenience customers feel when service is interrupted and that adequate assessment of such costs is crucial when they are used quantitatively in cost-benefit analyses. In this paper we demonstrate by a distribution system example that typical time variations of component failure rate, repair time, load and specific interruption costs can have a significant impact on the estimated annual interruption cost for delivery points in the system. This observation is possible by a model that can handle such time variations including correlation between the parameters. An interesting application of this model is to quantify the consequence of for example moving planned maintenance to periods when the load and the interruption cost is low.Index Terms--energy not supplied, interruption costs, power system economics, power system reliability

Bibliography review on applications of correlation analysis in power system operation and planning

“…They considered the seasonal and spatial correlations of inflows to obtain a set of realistic scenarios. Kjolle et al [16] demonstrated that typical time variations of component failure rate, repair time, load and specific interruption costs can have a significant impact on the estimated annual interruption cost using a model that can handle such time variations including correlation between the parameters.…”

Multiobjective Optimization Applied to Maintenance Policy for Electrical Networks

“…Furthermore this aggregated measure is quite widely used in the process of network performance assessments. In Sweden [21] and Norway [22] the regulation of DSOs are partly based on interruption costs. Many companies use the customer interruption cost in investment planning.…”

A reliability-centred asset maintenance method for assessing the impact of maintenance in power distribution systems

“…The utilities that own and operate the power distribution systems face various market requirements. On the one hand, customers are paying for a service (delivered energy) and the authorities are imposing regulation, supervision, and compensation depending on the degree of fulfilment of contractual and other obligations, see for example Norway [5], Sweden [6], and UK [7]. On the other hand, utilities must ensure that their expenditure is cost effective.…”