ABSTRACT
Reliability statistics, based on long-duration interruptions, are the primary benchmark used by utilities and regulators to identify service quality. Many utilities use reliability indices to track the performance of the utility or a region or a circuit. Regulators require most investor-owned utilities to report their reliability indices. The regulatory trend is moving to performance-based rates where performance is penalized or rewarded based on quantification by reliability indices. Much of the reliability data reported to regulators excludes major storm or major event interruptions. There are pros and cons to excluding storm interruptions. Reliability-based incentives and penalties directly affect a distribution business, so understanding the variability in year-to-year reliability indices is essential for managing the financial risk for a distribution utility. The standard deviation is a measure of volatility of a dataset and is often used as a risk assessment parameter. Faults and interruptions have significant year-to-year variation because weather conditions vary significantly.
