ELECTRICITY SUPPLY RELIABILITY - ESTIMATING THE VALUE OF LOST LOAD

The Office of Electricity Regulation (OFFER) reviews the performance o f electricity distribution companies on reliability of supply, While p hysical indicators of supply reliability, such as number of outages an d minutes of electricity lost per customer per year, are readily avail able, little is known about the monetary value placed on supply reliab ility by customers, This paper briefly reviews different methods to de rive monetary values of power interruptions avoided, before arguing th at a method which values the lost utility to consumers from outages is the most appropriate, A contingent ranking method is used to derive s uch lost utility values from a survey of industrial firms, The value c ustomers place on outages avoided is higher than that currently used i n appraisals of infrastructure investment, and in the determination of electricity prices, in the UK. Copyright (C) 1997 Elsevier Science Lt d.