Impacts of service quality regulation on distribution automation investment

This paper investigates the effects of service quality regulation on investing in distribution automation. Among different regulatory instruments for quality regulation, the Reward-Penalty Scheme (RPS) has been selected to evaluate the effect of monetary incentive on behavior of Electric Distribution Utility (EDU) for service reliability. By implementing different automation strategies, the value of enhancing reliability indices and consequently the value of rewards and penalties are calculated for each strategy. For achieving to more realistic outcome, ten years horizon is considered. Furthermore, in the calculation of reliability indices, the time varying failure rate of components is taken into account. The proposed approach is applied to the Swedish Urban Reliability Test System to show the effectiveness of the proposed technique. This paper can be useful for decision makers in EDU to select the best automation strategy to maximize the utility profit in the presence of service quality regulation.