The basic function of a modern electric power system is to provide an adequate electrical supply to its customers as economically as possible and with the perceived level of reliability. Electricity has become a dominant feature of our daily lives and an essential input to industrial sector development. The purpose of this is to obtain the electrical interruption (outgage) cost of the industrial consumers, due to unreliable electric power supply in industrial sector. This study is useful in identifying the industries that are most sensitive to an electical interruption (outgage). In turn, this can be used as inputs by Tenaga Nasional Berhad (TNB) in the planning of its future electrical supply system. In general, the impact on an industrial customer due to a cessation in the electrical supply depends on the characteristics of both customer and interruption. Customer characteristics include the following aspects, namely the type of industry, type of technology, size of industry, etc. interruption characteristics include the frequency and duration of the interruption. Mathematical models were developed in this study of formulate the Cost of Loss of Supply for the industrial customers. The distribution of impact level was based on the type of industry, type of technology and the maximum demand capacity were developed in this study. This study presents the results of an investigation of the Cost of Loss of Supply per kilowatt interrupted plus per kilowatt-hours of undelivered energy. A survey method was used in this 1993 study by using a questionnaire for industrial customers in Kuala Lumpur (Klang Valley) and Johor Bahru areas. The sampled industries were divided into 9 groups of industry, which was based on the Federation of Malaysian Manufacturers (FMM 1992) classifications. Survey results reflect data from 28 companies covering 53 plants of eight groups of industries. The survey results were analyzed to obtain the Cost of Loss of Supply (CI) in term of RM/kW and RM/kWh thea correspond to the frequency of interruptions and the duration of interruption respectively. The linear function resulted from this survey is CI = RM33.19/kW + RM 4.80/kWh, for all plants in average. This study also covered other additional results such as the plant restart time requirements, customer' willingness to pay, human health & safety, brownout and power surges impact. The electricity supply shortage, interruption and power failures have become a critical problem in Malaysia, especially in the current high growth industrial investments. This situation needs to be improved in the future, since the cost impact resulted from this study is very significant, and it could influence the growth of foreign investments in Malaysia.