Interruption Costs and Consumer Valuation of Reliability of Service in a Liberalised Power Market

This paper addresses the methodological issues related to data normalization and the estimation of customer average interruption costs that are suitable for incorporation into performance-based regulation regimes. The paper describes methods and algorithms developed to calculate individual and sector normalized cost functions and presents the main results from the most recent Norwegian customer survey of interruption costs, performed in the period 2001-2003. The study showed that extra attention has to be given to the process of censoring outliers in the data material as the data often are far from normally distributed