Outage cost modelling for reliability based network planning and regulation of distribution companies

In this paper the use of outage costs for regulation purposes as well as for network planning is discussed. A lot of work has been done to improve the directing effects of the regulation model of Finnish network companies. It is certain that in the future power quality in some form will be a part of the regulation model and it seems that adding outages as costs to operational costs has better directing effects than the model that is in use at present. Further research has to be done to update the outage cost parameters for each customer group. Actually this kind of project in co-operation with Finnish technical universities is proposed to start in 2004. In the future compatible reliability evaluation methods and parameters should be sufficient to be effectively applied both in network planning and for regulation purposes.