Value of Service
Outages cost the U.S. economy $80 billion dollars per year! How much of this is in your service territory? PSE can not only quantify the economic costs of outages, but also help you develop cost effective plans to lower them. Reliability-driven investments are some of the most valuable you can make - but without accurate cost-of-outages estimates, these investments are hard to identify and justify. PSE can help!
Applications
- Estimating economic costs of lost serviceresulting from supply/transmission failures
- Designing reliability plans tied to findings (rate/reliability balance)
Value of Service (VOS) studies use advanced survey and statistical techniques to quantify the value of service reliability to end-use consumers. The study results measure the economic losses consumers would bear when a given power outage occurs within a service territory. By identifying the factors (e.g., consumer type, number of employees, household income) that affect economic losses due to service interruptions, VOS studies provide utilities with monetized values for reliability improvements that can be used for evaluating maintenance expenses and capital expenditures associated with reducing outages, ultimately allowing them to more effectively target their resources and investments. VOS studies are useful in transmission and distribution capital planning, maintenance planning, cost of service allocation for reliability-driven investments, and developing strategies to manage curtailment plans.
The graph below presents example results of a cost-benefit analysis for six projects. In this example, Projects A, C, D, and F have economic benefits to consumers that outweigh project costs. Projects B and E will incur costs greater than the benefits. These results can be used to provide empirical guidance to project prioritization, “go or no go” decisions, and justify rate adjustments.
VOS studies can show the economic benefits of reducing outages by substation, feeder, or rate class depending on the objectives of the study.
- Distribution Substations: This information helps to evaluate the benefits of contemplated transmission or sub-transmission reliability-driven investments. It can assist in prioritizing projects to those most economically valuable to the end-use consumer.
- Distribution Feeders: This information helps distribution utilities to estimate the benefits of reliability-driven investments (e.g., undergrounding power lines) at the feeder level or load transfer switching schemes. These estimates can be used in a cost-benefit analysis and be used to properly prioritize projects. This information can be an important input to curtailment strategies.
- Rate Classes: Different types of consumers incur varying economic costs when outages occur. The economic impacts of a large investment to improve reliability can be estimated by rate class and costs can be allocated across rate classes accurately.
