Estimating electricity supply outage cost for residential and commercial customers

This paper analyzes the importance of estimating the value of service reliability for electric utility customers. The electricity outage cost is estimated for residential and commercial category of customers in ten districts of a northern Indian state of Rajasthan as a case study. To obtain responses from the customers a survey questionnaire is framed containing issues related to quality of power supply, losses against outage, customer´s desire to have an uninterrupted power supply, compensation for increased outages and choice of alternative action to avoid or nullify the effect of an outage. The outage cost is calculated by two approaches namely preparatory action approach and contingent value approach. Results of this study are meaningful from the utility´s perspective in order to ensure the adequate service continuity and customer satisfaction.