On Incentives affecting Risk and Asset Management of Power Distribution

Abstract: The introduction of performance based tariff regulations along with higher media and political pressure have increased the need for well-performed risk and asset management applied to electric power distribution systems (DS), which is an infrastructure considered as a natural monopoly. Compared to other technical systems, DS have special characteristics which are important to consider. The Swedish regulation of DS tariffs between 1996 and 2012 is described together with complementary laws such as customer compensation for long outages. The regulator’s rule is to provide incentives for cost efficient operation with acceptable reliability and reasonable tariff levels. Another difficult task for the regulator is to settle the complexity, i.e. the balance between considering many details and the manageability. Two performed studies of the former regulatory model, included in this thesis, were part of the criticism that led to its fall. Furthermore, based on results from a project included here, initiated by the regulator to review a model to judge effectible costs, the regulator changed some initial plans concerning the upcoming regulation. A classification of the risk management divided into separate categories is proposed partly based on a study investigating investment planning and risk management at a distribution system operator (DSO). A vulnerability analysis method using quantitative reliability analyses is introduced aimed to indicate how available resources could be better utilized and to evaluate whether additional security should be deployed for certain forecasted events. To evaluate the method, an application study has been performed based on hourly weather measurements and detailed failure reports over eight years for two DS. Months, weekdays and hours have been compared and the vulnerability of several weather phenomena has been evaluated. Of the weather phenomena studied, heavy snowfall and strong winds significantly affect the reliability, while frost, rain and snow depth have low or no impact. The main conclusion is that there is a need to implement new, more advanced, analysis methods. The thesis also provides a statistical validation method and introduces a new category of reliability indices, RT.