The Reward-Penalty Scheme (RPS), a financial strategy developed by the regulator to avoid service reliability deterioration, is often used to guarantee the reliability level. This paper provides the new methodology for RPS design based on the spatial distribution of reliability performances. The analytical form of the spatial performance distribution is obtained using a method of moments. Using this distribution, the Dead Band Zone and reward and penalty points for each utility are obtained. This analysis offers a more transparent set of reward and penalty thresholds. The proposed methodology is tested on actual data from a Serbian distribution utility.
