Foundational Report Series: Advanced Distribution Management Systems for Grid Modernization, Business Case Calculations for DMS
Distribution Management System (DMS) applications require a substantial commitment of technical and financial resources. In order to proceed beyond limited-scale demonstration projects, utilities must have a clear understanding of the business case for committing these resources that recognizes the total cost of ownership. Many of the benefits provided by investments in DMSs do not translate easily into monetary terms, making cost-benefit calculations difficult. For example, Fault Location Isolation and Service Restoration (FLISR) can significantly reduce customer outage duration and improve reliability. However, there is no well-established and universally-accepted procedure for converting these benefits into monetary terms that can be compared directly to investment costs. This report presents a methodology to analyze the benefits and costs of DMS applications as fundamental to the business case.