A thesis submitted in partial fulfillment of the requirements for the degree of Master of Engineering

Thesis (M.Eng.) - Asian Institute of Technology, 1989

Literature on the economic cost of power outages dates back as early as 1960's in Europe but it has only been until recently that theoretically correct methodologies have been made. A number of potential applications of outage costs have emerged with the studies ranging from systems optimization, load shedding priorities and service restoration sequence to pricing policies. This study develops a detailed analytical framework for measuring outage costs borne by the industrial sector. An empirical investigation was made to test the survey method developed, to 17 selected manufacturing establishments in Cebu, Philippines. The results reveal that the economic loss due to power outages to the largest manufactures in 1987, only account 0.45% of the region's total manufacturing sector value added. Analysis is that the adaptive response investments and consumer response behavior, taken to ameliorate the impacts of outages, have displaced substantially potential outage costs. The study further observes that there is a wide range of power reliability and supply needs among the manufacturing groups; there is heterogeneity of behavior towards outages; there are varied intensities of adaptive response investments to avert critical outage losses, given the same level of service reliability and quality.