How to Estimate the Value of Service Reliability Improvements

Date Published
07/2010
Publication Type
Conference Paper
Authors
DOI
10.1109/PES.2010.5589316
LBL Report Number
LBNL-3592E
Abstract

A robust methodology for estimating the value of service reliability improvements is presented. Although econometric models for estimating value of service (interruption costs) have been established and widely accepted, analysts often resort to applying relatively crude interruption cost estimation techniques in assessing the economic impacts of transmission and distribution investments. This paper first shows how the use of these techniques can substantially impact the estimated value of service improvements. A simple yet robust methodology that does not rely heavily on simplifying assumptions is presented. When a smart grid investment is proposed, reliability improvement is one of the most frequently cited benefits. Using the best methodology for estimating the value of this benefit is imperative. By providing directions on how to implement this methodology, this paper sends a practical, usable message to the industry.

Conference Name
IEEE Power and Energy Society General Meeting
Year of Publication
2010
Pagination
5
Publisher
IEEE
Conference Location
Minneapolis, MN
Keywords
Organizations
Research Areas
Download citation