Incorporating Service Quality Regulation in Distribution System Maintenance Strategy

The concerns of regulatory authority for the cost efficiency and service quality of distribution utilities has led them to implement monetary schemes, such as penalty/reward mechanism (PRM). PRM provides explicit financial incentives for distribution system operators (DSO) to maintain or improve their efficiency and quality of service. Although the effectiveness of the PRM is proven, analytical tools that can handle the complex decision-making process faced by decision makers to respond to PRM are scarce. This paper presents an approach for distribution system maintenance management in the presence of the PRM. The proposed approach tailors the maintenance plans by taking into account the equipment condition in terms of failure rate, cost of planned and unplanned outage, as well as labor and material cost in conjunction with the incentives provided by PRM. New insights are also gained regarding the effects of PRM on the process of decision making by DSO.