**A.3 Outage cost**

The outage costs, i.e., the cost of the expected energy not supplied ( ), were previously presented and discussed in Section 5. One method of evaluating is described in [8]. Therefore, estimating the outage cost (*OC*) is to multiply the value of that by an appropriate outage cost rate (*OCR*), as follows:

$$OC\_T = \sum\_{t} \left( \varepsilon \text{ENS} \cdot OCR \right)^t \tag{A.4}$$

where *ϵENS* is the expected energy not supplied (kWh lost) and *OCR* is the outage cost rate in SR/kWh.

The overall cost of supplying the electric energy to the consumers is the sum of system cost that will generally increase as consumers are provided with higher reliability and customer outage cost that will, however, decrease as system reliability increases or vice versa. This overall system cost (*OSC*) can be expressed as in the following equation:

$$\text{OSC}\_{T} = \text{SC}\_{T} + \text{OC}\_{T} \tag{A.5}$$

The prominent role of outage cost estimation, as revealed in the above equation, is to assess the worth of power system reliability by comparing this cost (*OC*) with the size of system investment (*SC*) in order to arrive at the least overall system cost that will establish the most appropriate system reliability level that ensures energy continuous flow as well as the least cost of its production.

As witnessed in **Figure 8**, the incorporation of customer outage costs in investment models for power system expansion plans is very difficult for planners in fastdeveloping countries. This difficulty stems principally either from the lack of system records of outage data, failure rate, frequency, duration of repair, etc. or the failure to carry out customer surveys to estimate the impact and severity of such outages in terms of monetary value.

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