Customer interruption costs (CICs) for network capital investments

Investments in network expansion are driven by the cost to the customer and the supplier of electricity. Network reliability is a major issue when considering network expansion. Unreliable networks result in unnecessary interruption of customers, and even network collapse. The restructuring of the electricity supply industry results in poor network reliability due to lack of understanding by the distributors of the criticality of reliability and network investment criteria. When considering network investments, for a project to be economically justifiable, the total cost for installing the new infrastructure should be less than the cost to interrupt the customer. For this criterion to be applied, customer interruption costs (CICs) are critical. This paper reviews the application of CICs in capital investment, highlighting the criticality of the CIC figures. Different methodologies are reviewed, and a recommendation is made in light of a restructured electrical industry.