Current Practices and Customer Value-Based Distribution System Reliability Planning

Abstract

Among the major issues facing utilities in today's competitive electricity market is the pressure to hold the line on rates and provide electricity with adequate quality and reliability. Utilities are increasingly recognizing that the level of supply reliability planned and designed into a system has to evolve away from levels determined basically on a technical framework using deterministic criteria, and toward a balance between minimizing costs and achieving a sustainable level of customer complaints. Assessment of the cost of maintaining a certain level of supply reliability or making incremental changes therein must include not only the utility's cost of providing such reliability and the potential revenue losses during outages, but also the interruption costs incurred by the affected customers during utility power outages. Such a cost-benefit analysis constitutes the focal point of the value-based reliability planning. Value-based reliability planning provides a rational and consistent framework for answering the fundamental economic question of how much reliability is adequate from the customer perspective and where a utility should spend its reliability dollars to optimize efficiency and satisfy customers' electricity requirements at the lowest cost. Costs to customers associated with varying levels of service reliability are significant factors that cannot be ignored. Explicit considerations of these customer interruption costs in developing supply reliability targets and in evaluating alternate proposals for network upgrade, maintenance, and system design must, therefore, be included in system planning and design process. The paper provides a brief overview of current deterministic planning practices in utility distribution system planning, and introduces a probabilistic customer value-based approach to alternate feed requirements planning for overhead distribution networks.