Outage costs quantification for benefit–cost analysis of distribution automation systems Chun-Lien Su a, * , Jen-Ho Teng b a Department of Marine Engineering, National Kaohsiung Marine University, Kaohsiung 805, Taiwan b Department of Electrical Engineering, I-Shou University, Kaohsiung 840, Taiwan Received 14 July 2006; received in revised form 22 May 2007; accepted 3 June 2007 Abstract Deregulation of electric power industry has motivated electricity customers to pay more attention in evaluating both the direct cost of electric service and the monetary value of reliable electric service. This movement has been recognized by the utilities and the value-based aspects are introduced into the planning and design of power systems to consider the outage costs. The value of service reliability that can portray and respond to actual utility and customer impacts as a result of power interruptions plays a major role on justifying whether a distribution automation (DA) system is beneficial or not. However, for the value of service reliability, there are a number of factors that can affect it. To exactly evaluate the service reliability value, two formulas for quantifying the customer interruption costs and utility reduced energy revenues associated with power failures are derived in this paper. The customer types, feeder loads, feeder failure rate, number of switch, restoration time, and repair time are taken into account. The proposed formulas can provide an exact estimate in outages costs of a feeder and their computation is simplified and straightforward. The estimated outage costs can then be used to cal- culate the reliability improvement benefit of DA systems for the system benefit–cost analysis. A practical DA system implemented by Taiwan Power Company is used to illustrate the proposed formulas and the benefit–cost analysis result is presented. Sensitivity analysis is also performed to reduce the effects of benefit–cost analysis parameters on the analysis result. Ó 2007 Elsevier Ltd. All rights reserved. Keywords: Distribution automation; Outage cost; Benefit–cost analysis 1. Introduction Today’s energy market that is moving toward an intense price competition has forced electric utilities to face many challenges. One of the major challenges is to increase the market value of services. To provide lower electricity rates for customers, utilities have provided adequate reliability, and reduced its costs of operation, maintenance, and con- struction. Since distribution networks provide the final link between the bulk transmission system and the customers, it is important to the total electrical supply system. It has been reported that over 80% of customer service interrup- tions are due to failures in distribution networks. To achieve significant and immediate improvement in the dis- tribution supply reliability and concurrently to enhance the customers service quality, various types of distribution automation (DA) systems are implemented by the utilities worldwide. DA systems have been defined by IEEE as sys- tems that enable an electric utility to monitor, coordinate, and operate distribution network components in real-time mode from remote control centers [1]. DA systems are usually modular and can be imple- mented in phases to include remote monitoring and control of substations, feeders, and consumer loads. DA systems are built to achieve the goals of operation and maintenance (O&M) cost reduction, capital investment deferment, supply reliability improvement, and operation efficiency 0142-0615/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.ijepes.2007.06.026 * Corresponding author. Tel.: +886 7 8100888x5226; fax: +886 7 5716013. E-mail addresses: cls@mail.nkmu.edu.tw (C.-L. Su), jhteng@isu.edu. tw (J.-H. Teng). www.elsevier.com/locate/ijepes Available online at www.sciencedirect.com Electrical Power and Energy Systems 29 (2007) 767–774