Distribution planning involves making trade-offs between cost and reliability. Simply put, distributors should be able to achieve high levels of reliability (i.e., low levels of service interruptions) if they spend enough, in terms of capital and operating and maintenance expenses, on their systems. Although empirically based algorithms which capture such trade-offs are elusive at best, planners have developed a reasonable sense of where spending will produce the best results and develop their annual capital and operating budgets accordingly.

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