Failure Rate Modeling Using
Equipment Inspection Data
Richard E. Brown (SM)*
Abstract—System reliability models typically use aver-
1
age equipment failure rates. Even if these models are
calibrated based on historical reliability indices, all like
components within a calibrated region remain homo-
geneous. This paper presents a new method of custom-
izing failure rates using equipment inspection data.
This allows available inspection information to be re-
flected in system models, and allows for calibration
based on interruption distributions rather than mean
values. The paper begins by presenting a method to
map equipment inspection data to a normalized condi-
tion score, and suggests a formula to convert this score
into failure probability. The paper concludes by apply-
ing this methodology to a test system based on an ac-
tual distribution system, and shows that the incorpora-
tion of condition data leads to richer reliability models.
Keywords—predictive reliability assessment, equipment
failure rate modeling, inspection-based ranking
I. INTRODUCTION
P OWER DELIVERY COMPANIES are under increas-
ing pressure to provide higher levels of reliability for
lower cost. The best way to pursue these goals is to plan,
engineer, and operate power delivery systems based on
quantitative models that are able to predict expected levels
of reliability for potential capital and operational strategies.
Doing so requires both system reliability models and com-
ponent reliability models.
Predictive reliability models are able to compute system
reliability based on system topology, operational strategy,
and component reliability data. The first distribution reli-
ability model, developed by EPRI in 1978 [1], was not
widely used due to conservative design and maintenance
standards and, to a lesser extent, a lack of component reli-
ability data. Eventually, certain utilities became interested
in predictive reliability modeling and started developing in-
house tools [2-5]. Presently, most major commercial cir-
cuit analysis packages offer an integrated reliability mod-
ule capable of predicting the interruption frequency and
duration characteristics of equipment and customers. Ad-
vanced tools have extended this basic functionality to in-
clude momentary interruptions [6-7] and risk assessment
[8-9].
*This paper is based on a paper of the same title to be published in IEEE
Transactions on Power Systems. Richard Brown is with KEMA and can be
reached at rebrown@ kema.com.
The application of predictive reliability models has tradi-
tionally assigned average failure rate values to all compo-
nents. Although simplistic, this approach produces useful
results and can substantially reduce capital requirements
while providing the same levels of predicted reliability
[10]. Advanced tools have attempted to move beyond av-
erage failure rates by either calibrating failure rates based
on historical system performance [11], or by using multi-
state weather models [12-13]. A few attempts have been
made to compute failure rates as a function of parameters
such as age [14], maintenance [15], or combinations of
features [16], but these models tend to be system-specific
and are not practicable for a majority of utilities at this
time.
The use of average component failure rates in system re-
liability models is always limiting and is potentially mis-
leading [17]. Although generally acceptable for capital
planning, the use of average values has two major draw-
backs. First, average values cannot reflect the impact of
relatively unreliable equipment and may overestimate the
reliability of customers experiencing the worst levels of
service. Second, average values cannot reflect the impact
of maintenance activities and, therefore, preclude the use
of predictive models for maintenance planning and overall
cost optimization.
Most utilities perform regular equipment inspections and
have tacit knowledge that relates inspection data to the risk
of equipment failure. Integration of this information into
component reliability models can improve the accuracy of
system reliability models and extend their ability to reflect
equipment maintenance in results.
Ideally, each class of equipment could be characterized
by an equation that computes failure rate as a function of
critical parameters. For example, power transformers might
be characterized as a function of age, manufacturer, volt-
age, size, through-fault history, maintenance history, and
inspection results. Unfortunately, in most cases the sample
size of failed units is far too small to generate an accurate
model, and other approaches must be pursued.
This paper presents a practical method that uses equip-
ment inspection data to assign relative condition rankings.
These rankings are then mapped to a failure rate function
based on worst-case units, average units, and best-case
units. The paper then presents recommended failure rate
models for a broad range of equipment, presents a method
of calibration based on historical customer interruptions,
and concludes by examining the impact of these techniques
on a test system based on an actual distribution system.
 II. INSPECTION-BASED CONDITION RANKING Although useful for prioritizing maintenance activities,
Typical power delivery companies perform periodic in- relative equipment condition ranking is less useful for rig-
spection on a majority of their electricity infrastructure. orous reliability analysis. Since reliability assessment mod-
Utilities have various processes for collecting and re- els require equipment failure rates, inspection results
cording inspection results. Paper forms stored in a multi- would ideally be mapped into a failure rate through a
tude of departments make obtaining comprehensive system closed-form equation derived from regression models. As
inspection results problematic. Many utilities, however, mentioned earlier, this is not presently feasible for most
have migrated their inspection and maintenance programs classes of equipment due to limited historical data.
to computerized maintenance management systems
(CMMS) and data management systems that can be used III. FAILURE RATE MODEL
as central warehouses for equipment inspection results. Although there is not enough historical data to map in-
After a population of similar equipment has been in- spection results to failure rates through regression-based
spected, it is desirable to rank their relative condition. Con- equations, interpolation is capable of providing approxi-
sider a piece of equipment with n inspection item results, mate results. At a minimum, interpolation requires failure
(r1, r2 … , rn). Further suppose that each inspection item rates corresponding to the worst and best condition scores.
result is normalized so that values correspond to the fol- Practically, it requires one or more interior points so that
lowing: non-linear relationships can be determined.
After exploring a variety of mapping functions, the au-
ri = 0 ; best inspection outcome thors have empirically found that an exponential model
ri = ½ ; average inspection outcome best describes the relationship between the normalized
ri = 1 ; worst inspection outcome equipment condition of Eq. 1 and equipment failure rates.
The specific formula chosen is:
Each inspection item result, ri, is assigned a weight, wi,
based on its relative importance to overall equipment con-
dition. These weights are typically determined by the com- Table 1. Inspection Form for Power Transformers
bined opinion of equipment designers and field service Criterion Weight Score
personnel, and are sometimes modified based on the par-
Age (years of operation) 8
ticular experience of each utility. The final condition of a
Condition of internal solid insulation 2
component is then calculated by taking the weighted aver-
age of inspection item results .By definition, a weighted Oil type 1
average of 0 corresponds to the best possible condition, a Condition of core 2
weighted average of ½ corresponds to average condition, Condition of inaccessible parts 1
and a weighted average of 1 corresponds to the worst pos- Condition of tank 1
sible condition. Condition of cooling system 1
Condition of tap changer 2
n n
Condition Score = ∑i =1
wi ri ÷ ∑w
i =1
i (1) Condition of accessible parts
Condition of bushings
1
2
Experience with this transformer type 4
After each piece of equipment is assigned a condition Transformer loading history 3
score between 0 and 1, equipment using the same inspec- Number of extraordinary mechanical stresses 3
tion item weights can be ranked and prioritized for mainte- Number of extraordinary dielectric stresses 2
nance (typically considering cost and criticality as well as
Noise level 1
condition). This approach has been successfully applied to
Core and winding losses 2
several utilities by the authors, and inspection forms and
weights for most major pieces of power delivery equipment Gas in oil analysis (current results) 5
have been developed. In addition, inspection items have Gas in oil analysis (trend in results) 4
guidelines that suggest scores for various inspection out- Oil analysis 6
comes. To illustrate, an inspection form for power trans- Sum 51
formers is shown in Table 1 and the scoring guideline for
Weighted Average
“Age” is shown in Table 2.
It should also be noted that inspection items can also be
related to external factors. For example, overhead lines can Table 2. Guideline for Power Transformer “Age”
include inspection items related to vegetation, animals, and Age (years of operation) Score
lightning. Scores for these items will reflect both the exter- Less than 1 0.00
nal condition (e.g., lightning flash density) and system 1 - 10 0.05
mitigation efforts (e.g., arrestors, shield wire, and ground-
11 - 20 0.10
ing).
21-25 0.25
26-29 0.40 1.000

29-31 0.50
32-35 0.60
36-40 0.80 )
MVA
(<2 5

Failure Rate (/yr)-

0.100 r
Greater than 40 1.00 nk or me
T ru T ran sf
λ ( x ) = Ae Bx + C
ea d e r
erh Po w A)
Ov 5MV
r (>2
λ = failure rate (2) n sf orme
e r Tra
Po w
x = condition score 0.010

k
ble r un
Three data pairs are required to solve for the parameters

Ca y T
ar
A, B, and C. The previous section has developed a condi-

im
Pr
tion ranking methodology that, by definition, results in
best, average, and worst condition scores of 0, ½, and 1, 0.001
respectively. Therefore, three natural data pairs correspond 0 0.2 0.4 0.6 0.8 1

to λ(0), λ(½), and λ(1). λ(½) can be approximated by tak-
ing the average failure rate across many components or by
using average failure rates documented in relevant litera-
ture. λ(0) and λ(1) are more difficult to determine, but can
be derived through benchmarking, statistical analysis, or
heuristics. Given these three values, function parameters
are determined as follows:
Condition (p.u.)
Figure 1. Selected Equipment Failure Rate Functions
Failure rate graphs for some of the equipment in Table 3
are shown in Figure 1. These are simply plots of Eq. 2 us-
ing the stated A, B, and C parameters the displayed equip-
ment. It is interesting to see that the range of failure rates
of certain types of equipment is large, while other types
have a more moderate range. This reflects the ranges found

A=
[λ (½ ) − λ (0)]2
λ (1) − 2λ (½ ) + λ (0)
⎛ λ (½ ) + A − λ (0 ) ⎞
B = 2 ln ⎜ ⎟ (3)
⎝ A ⎠ After creating a system reliability model, it is desirable
C = λ (0) − A
A detailed benchmarking of equipment failure rates is
found in [18]. These results document low, typical, and
high failure rates corresponding to system averages across
a variety of systems. Assuming that (1) best-condition
equipment have failure rates half that of best system aver-
ages, (2) average-condition equipment have failure rates of
typical system averages, and (3) worst-condition equip-
ment have failure rates twice that of best system averages,
parameters for a variety of equipment are shown in Table
3. These parameters, based on historical failure studies
such as [14], are useful in the absence of system specific
data, but should be viewed as initial conditions for calibra-
tion, which is discussed in the next section.
in a broad literature search which forms the basis of Table
3.
IV. MODEL CALIBRATION
to adjust component reliability data so that predicted sys-
tem reliability is equal to historical system reliability [11].
This process is called model calibration, and can be gener-
alized as the identification of a set of parameters that mini-
mize an error function.
Traditionally, reliability parameters (such as equipment
failure rates) either remained uncalibrated or were adjusted
based on average system reliability. For example, it may be
known that an analysis area has an average of 1.2 interrup-
tions per customer per year. Based on this number, failure
rates can be adjusted until the predicted average number of
customer interruptions is equal to this historical value. Af-
ter failure rates are calibrated, switching and repair times
can be adjusted until predicted average interruption dura-
tion is also equal to historical values.
Calibrating based on system averages is useful, but does
not ensure that the predicted distribution of customer inter-
ruptions is equal to the historical distribution. That is, it
does not ensure that either the most or least reliable cus-
tomers are accurately represented – only that the average
across all customers reflects history. This is a subtle but
important point; since customer satisfaction is largely de-
termined by customers receiving below-average reliability,
calibration of reliability distribution is arguably more im-
portant than calibration of average reliability.
A system model with homogeneous failure rates will
produce a distribution of expected customer reliability lev-
els (e.g., customers close to the substation will generally
have better reliability than those at the end of the feeder).
If components on this same system are assigned random
failure rates such that average system reliability remains
the same, the variance of expected customer reliability will
tend to increase. That is, the best customers will tend to get
better, the worst customers will tend to get worse, and
fewer customers can expect average reliability.
The distribution of expected customer reliability is criti-
cal to customer satisfaction and should, if possible, be cali-
brated to historical data. A practical way to accomplish this
objective is to calibrate condition-mapping parameters so
that a distribution-based error function is minimized. Such
an error function can be based on one of three levels of
granularity: (1) individual customer reliability, (2) histo-
grams of customer reliability, or (3) statistical measures of
customer reliability.
An error function can be defined based on the difference
between each customer’s historical versus predicted reli-
ability. This approach calibrates reliability to the customer
level and utilizes historical data at the finest possible
granu-
Table 3. Representative Failure Rate Model Parameters (λ values in failures per year)
Description λ(0) λ(½) λ(1) A B C
Overhead Equipment
Overhead Lines
Primary Trunk* 0.0100 0.100 0.600 0.01976 3.4295969 -0.009756098
Lateral Tap* 0.0100 0.160 0.600 0.07759 2.1522789 -0.067586207
Secondary & Service Drop* 0.0100 0.088 0.600 0.01402 3.7632316 -0.004018433
Pole Mounted Transformer 0.0020 0.010 0.030 0.00533 1.8325815 -0.003333333
Disconnect Switch 0.0020 0.014 0.280 0.00057 6.1971793 0.001433071
Fuse Cutout 0.0020 0.009 0.060 0.00111 3.9718310 0.000886364
Line Recloser 0.0025 0.015 0.060 0.00481 2.5618677 -0.002307692
Shunt Capacitor 0.0055 0.020 0.170 0.00155 4.6729733 0.003948339
Voltage Regulator 0.0050 0.029 0.200 0.00392 3.9272195 0.001081633
Underground Equipment
Underground Cable
Primary Cable* 0.0015 0.070 1.174 0.00453 5.5597230 -0.003031386
Secondary Cable* 0.0025 0.100 0.300 0.09274 1.4369300 -0.090243902
Elbow Connectors 3.E-05 6.E-04 0.002 0.00039 1.7971823 -0.000361446
Cable Splices and Joints 3.E-05 0.030 0.318 0.00348 4.5255272 -0.003450994
Padmount Transformers 0.0005 0.010 0.100 0.00112 4.4970357 -0.000621118
Padmount Switches 0.0005 0.003 0.010 0.00139 2.0592388 -0.000888889
AIS Substation Equipment
Power Transformers
Less than 25 MVA 0.0075 0.040 0.140 0.01565 2.2478602 -0.008148148
Bigger than 25 MVA 0.0050 0.030 0.120 0.00962 2.5618677 -0.004615385
Circuit Breakers 0.0005 0.010 0.060 0.00223 3.3214624 -0.001728395
Disconnect Switches 0.0020 0.010 0.320 0.00021 7.3142615 0.001788079
Instrument Transformers 0.0000 0.010 0.060 0.00250 3.2188758 -0.002500000
Air Insulated Busbar 0.0005 0.010 0.076 0.00160 3.8767259 -0.001097345
GIS Substation Equipment
GIS Bay (before 1985) 0.0003 0.002 0.030 0.00011 5.6031525 0.000190114
GIS Bay (after 1985) 0.0002 0.001 0.018 0.00004 6.1127138 0.000160494
* Line and cable failure rates are per circuit mile

larity. However, historical customer reliability is stochastic
in nature and will vary naturally from year to year. An er-
ror function can be defined based on the difference be-
tween each customer’s historical versus predicted reliabil-
ity. This approach calibrates reliability to the customer
level and utilizes historical data at the finest possible
granularity. However, historical customer reliability is sto-
chastic in nature and will vary naturally from year to year.
This is especially problematic with frequency measures.
Although customers on average may experience 1 interrup-
tion per year, a large number of customers will not experi-
ence any interruptions in a given year. Calibrating these
customers to historical data is misleading, making about 10
years of historical data for each customer desirable. Unfor-
tunately, most feeders change enough over 10 years to
make this method impractical.
An error function can also use a histogram of customer
interruptions as its basis. The historical histogram could be
compared to the predicted histogram and parameters ad-
justed to minimize the chi-squared error (χ2):
Where n is the number of bins, h is the historical bin
value, and p is the predicted bin value. Using the chi-
squared error is attractive since it emphasized the distribu-
tion of expected customer reliability which is strongly cor-
related to customer satisfaction. Histograms will vary sto-
chastically from year to year, but the large number of cus-
tomers in typical calibration areas prevent this from be-
coming a major concern.
Last, an error function can be based on statistical meas-
ures such as mean value (µ) and standard deviation (σ).
The error function will typically consist of a weighted sum
similar to the following:
Error = α (µ − µ ') + β (σ − σ ')
2 2
(5)
Unlike the χ2 error, this function allows relative weights
to be assigned to mean and variance discrepancies (α and
β). For example, a relatively large a value will ensure that
predicted average customer reliability reflects historical
average customer reliability while allowing relatively large
mismatches in standard deviation.

∑ (h h− p )
n Once an error measure is defined, failure rate model pa-
χ2 = i i
(4) rameters can be adjusted so that error is minimized. Since
i =1 i this process is over determined, the authors suggest using
Table 3 for initial parameter values and using gradient de-
scent or hill climbing techniques for parameter adjustment. 50
Calibration is computationally intensive since error sensi- Historical
tivity to parameters must be computed by actual parameter
40 Uncalibrated
perturbation, but calibration need only be performed once.
Calibrated

% of Customers
V. APPLICATION TO TEST SYSTEM 30
The methodologies described in the previous two sec-
tions have been applied to a test system derived from an
actual overhead distribution system in the Southern U.S. 20
This model consists of three substations, 13 feeders, 130
miles of exposure, and a peak load of 100 MVA serving
10
13,000 customers. The analytical model consists of 4100
components.
Customer historical failures are computed from four- 0
year historical averages. Equipment condition for this sys- 0.0 0.5 1.0 1.5 2.0 2.5 3.0
tem was not available, and was therefore assigned for ran- Inte rruptions (per year)
domly for individual components based on a normal distri-
bution with a 0.5 mean and a 0.2 standard deviation. Figure 2. Historical Versus Predicted Customer Interruptions
Calibration for this test system is performed based on
the chi-squared error of customer interruptions. Initial fail-
ure rates for all components are assigned based on λ(½)
values in Table 3, and initial failure rates are computed
based on condition and the parameters in Table 3. Calibra-
tion is performed by a variable-step local search that guar-
antees local optimality.
A summary of calibration results for overhead lines is
shown in Figure 2, and a visualization of calibrated results
in shown in Figure 3. The shape of the uncalibrated histo-
gram is similar to the historical histogram, but with a mean
and mode worse than historical values. After calibration,
the modes align, but the predicted histogram retains a
slightly smaller variance. In fact, the historical histogram is
subject to stochastic variance, and the inability of the ex-
pected value calibration to match this variance is immate-
rial and perhaps beneficial.
Uncalibrated and calibrated failure rate parameters are
shown in Table 4, and corresponding failure rate functions
are shown in Figure 4. In effect, the calibration for this
system did not change the failure rates for lines with good Figure 3. Visualization of Calibrated Results
condition (less than 0.2), but drastically reduced the failure
rates for lines with worse-than-average condition (greater 0.7
than 0.5). These results are not unexpected, since this par- Uncalibrated
ticular service territory is relatively homogeneous in both 0.6
Calibrated
Failure Rate (/yr)

terrain and maintenance practice, and extremely wide 0.5

variations in overhead line failure rates have not been his-
0.4
torically observed.
0.3

0.2

Table 4. Calibration Results for Overhead Line Parameters 0.1

Uncalibrated Calibrated
0
A 0.01976 0.0170
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
B 3.429597 2.5981 Condition (p.u.)
C -0.00976 -0.00528
χ2 Error (%2) 1148.8 155.4 Figure 4. Overhead Line Failure Rate as a Function of Condition
 It is important to note that, in this case, equipment con- [3] G. Kjolle and Kjell Sand, “RELRAD - An Analytical Approach for
Distribution System Reliability Assessment,” IEEE Transactions on
ditions were assigned randomly, and some were very high.
Power Delivery, Vol. 7, No. 2, April 1992, pp. 809-814.
Even though actual equipment for this system may never
reach this poor condition state, the calibration process
compensated by ratcheting down the failure rates assigned
to equipment with the highest condition scores.
Once a system has been modeled and calibrated, it can
be used as a base case to explore the impact of issues that
may impact equipment condition such as equipment main-
tenance. Once the expected impact that a maintenance ac-
tion will have on inspection items is determined, the sys-
tem impact of maintenance can be quantified based on the
new failure rate. This allows the cost effectiveness of
maintenance to be determined and directly compared to the
cost effectiveness of system approaches such as new con-
struction, added switching and protection, and system re-
configuration.

VI. CONCLUSIONS
Equipment failure rate models are required for electric
utilities to plan, engineer, and operate their system at the
highest levels of reliability for the lowest possible cost.
Detailed models based on historical data and statistical
regression are not feasible at the present time, but this pa-
per presents an interpolation method based on normalized
condition scores and best/average/worst condition assump-
tions.
The equipment failure rate model developed in this pa-
per allows condition heterogeneity to be reflected in
equipment failure rates. Doing so more accurately reflects
component criticality in system models, and allows the
distribution of customer reliability to be more accurately
reflected. Further, a calibration method has been presented
that allows condition-mapping parameters to be tuned so
that the predicted distribution of reliability matches the
historical distribution of reliability. Finally, the use of this
condition-based approach allows the impact of mainte-
nance activities on condition to be anticipated and reflected
in system models, enabling the efficacy of maintenance
budgets to be compared with capital and operational budg-
ets.
This model is heuristic by nature, but adds a fundamen-
tal level of richness and usefulness to reliability modeling,
especially when parameters are calibrated to historical
data. In the short run, gathering more detailed information
on equipment failure rates and condition will strengthen
this approach. In the long run, this same information can
ultimately be used to develop explicit failure rate models
that eliminate the normalized condition assessment re-
quirement.

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Inc., 2002.

VIII.BIOGRAPHIES
Richard E. Brown is a principal consultant with KEMA, and specializes in
distribution reliability and asset management. He is the author or co-author
of more than 50 technical papers and the book Electric Power Distribution
Reliability. Dr. Brown received his BSEE, MSEE, and PhD from the Uni-
versity of Washington and his MBA from the University of North Carolina
at Chapel Hill. He is a registered professional engineer, and can be reached
at rebrown@kema.com.