Allocation of the Loss-of-life Cost of In-service Distribution Cables to Network Customers

Abstract

This article proposes a methodology based on the Shapley approach for the allocation of distribution cable loss-of-life cost among various groups of network customers. Different from the traditional uniform charging method adopted by many network operators, the proposed methodology reflects the true impact of customer groups on the loss of distribution cable useful life and its associated cost. The proposed methodology is applied to a realistic distribution network supplying residential customers in Iran, and the results are analyzed. The results show that the proposed Shapley approach offers a remarkable increased allocation to customers located far from the distribution substation as compared to the traditional charging method. In contrast, the cable loss-of-life cost allocated to customers near the substation exhibits a considerable decrease. These results may be important signals for network operators to design cost-causal network-use tariffs for various customer groups. They further result in better decisions with respect to the siting of new customers and the expansion of distribution networks.