【Memoirs of Construction Engineering Research Institute Vol. 48 (paper) Nov. 2006】 ECONOMIC LOSSES BY INTERRUPTION OF POWER SUPPLY SYSTEMS FROM SEISMIC HAZARDS BY CASE STUDY OF TEHRAN POWER SUPPLY SYSTEM Morteza Bastami, Shiro Takada and Yasuko Kuwata ABSTRACT A lot of direct and indirect losses incurred by damage to lifeline systems during past earthquakes require the development of methodologies for loss estimation of lifeline systems. The aim of this paper is to evaluate economic impact by interruption of power supply system from seismic hazards. In this study, a real time methodology is proposed for loss estimation of power supply system due to a probable future earthquake. The methodology integrates physical damage assessment, power flow connectivity, post-earthquake restoration, and business interruption to estimate direct and indirect economic losses. Direct economic losses in power supply systems are defined as repair costs of damaged equipments, power selling, and expense of emergency supplied flow. Major indirect economical losses due to interruption of power supply are business interruption, loss of data and perishable goods, and disruption of other interdependent lifelines. As a case study, electric power network of Tehran Regional Electric Company (TREC) is analyzed taking account of wave propagation, liquefaction, landslide, and fault rupture. All types of power substations, power posts, poles, transmission and distribution power lines are analyzed. The number of damages along the aerial and underground lines calculated under all the seismic hazards. Total estimated loss including direct and indirect losses are 558 million US$. Total estimated direct loss by 475 million US$ is much less than the total direct loss of power supply system in the 1995 Kobe Earthquake by 2 billion US$ but much more than the total direct loss of power supply system in the 1994 Northridge Earthquake by 183 million US$. Total estimated loss for Tehran power system is a big loss considering the costs of repair, material price, and labor salary in Iran. 1. Introduction In recent years, the big earthquakes have caused massive losses in urban areas. Earthquakes and their socio-economic consequences decrease the national product and incomes, nullifying economic progress and increase inflation. The economic losses exceed several billions dollars per year. For example, the 1995 Kobe Earthquake caused more than 105 billions US dollars total direct loss, which was 8 percents of Gross National Product (GNP) of Japan 1) . Economic losses following an earthquake could be divided as direct and indirect losses, which may be defined as follows:  Direct economic loss: The money, which goes out.  Indirect economic loss: The money, which does not come. Direct loss is linked directly to an earthquake. It includes all damages, plus employment losses directly due to the closure of the damaged facility. Table 1 shows direct economic losses in some recent earthquakes. Indirect economic loss is defined as business interruption deriving from interactions between business and industries through changes in input demands or output sales, including chain reactions. Some indirect losses are as follows:  Reduction in employment income  Reduction in manufacturing products resulted from demand reduction  Reduction in taxation  Reduction in export  Increase in import