COST-BENEFIT-ANALYSIS OF POWER-SYSTEM RELIABILITY - 2 UTILITY CASE-STUDIES

There is an emerging recognition that utility investments and other decisions that affect electric service reliability should be explicitly evaluated on the basis of their cost and benefit implications. A cost-benefit approach that quantifies the reliability benefits of alternatives in terms of the reduction in costs resulting from unserved energy enables the evaluation of generation and transmission capacity additions on a consistent, economic basis. This approach has been applied to two utility case studies. In a case study for Pacific Gas and Electric Company, it was used to evaluate three options for maintaining reliability in a major load center - two involving local generation, and the third, a new 230-kV transmission connection. In a case study for Duke Power Company, the approach was used to evaluate alternative, designs for proposed additions to a transmission station. This paper describes the methodology and presents the two utility studies.