The purpose of this study is to investigate the context of power outage costs and its implications in the priority service programs. Outage costs is the information on the costs incurred by electricity customers as a result of power interruptions (total outage) or power curtailments (partial outage). The outage costs used for designing a feasible priority service program should be a marginal outage costs with partial outage, caused by the capacity shortage during the summer peak period. The utilities may design an appropriate priority service program determined by the customers’ outage costs and the utility’s avoided cost. Through subscribing load demand by marginal customers with low outage costs, it can mitigate the problem of capacity shortage of the system’s peak load. In the present study, we propose an estimating method to “reveal” the minimum amount of willingness to accept of the customers through simulating customers’ choice on the proposed curtailable rate program, we impute individual customers’ marginal outage costs and conduct a survey to examine the market acceptance among the proposed curtailable rate menu and investigate customers’ imputed outage costs in relation to their attributes. Furthermore, we utilize a simultaneous-equoation model in a logistic form to investigate the relationship between service reliability and imputed outage costs. The outage costs function includes the variables of customers’ attributes and outage attributes.
The estimated results show that those customers with high outage costs will choose relatively high reliability, and when there is a longer outage duration, a longer prior notification, and a smaller outage depth, there is a lower outage costs. Also, the imputed outage costs of the large scale high-electricity-intensity customers are significantly lower than that of the small scale low-electricity-intensity customers. Finally, the implications of the research results for designing a priority service program are discussed, further research directions are also recommended.
