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Lookup NU author(s): Emeritus Professor Ken Willis, Professor Guy Garrod
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The Office of Electricity Regulation (OFFER) reviews the performance of electricity distribution companies on reliability of supply. While physical indicators of supply reliability, such as number of outages and minutes of electricity lost per customer per year, are readily available, little is known about the monetary value placed on supply reliability by customers. This paper briefly reviews different methods to derive monetary values of power interruptions avoided, before arguing that a method which values the lost utility to consumers from outages is the most appropriate. A contingent ranking method is used to derive such lost utility values from a survey of industrial firms. The value customers place on outages avoided is higher than that currently used in appraisals of infrastructure investment, and in the determination of electricity prices, in the UK. Copyright © 1997 Elsevier Science Ltd.
Author(s): Willis KG, Garrod GD
Publication type: Article
Publication status: Published
Journal: Energy Policy
Year: 1997
Volume: 25
Issue: 1
Pages: 97-103
Print publication date: 01/01/1997
ISSN (print): 0301-4215
ISSN (electronic): 1873-6777
Publisher: Pergamon
URL: http://dx.doi.org/10.1016/S0301-4215(96)00123-1
DOI: 10.1016/S0301-4215(96)00123-1
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