PLaNWiNG, DESHGN cei TeRIA : econowses STRUCTURAL CONSIDERATIONS oC, FAULT CUREEHT EM LCULTIONS. spe VOLTAGE DROP AND REGULATION, LOSSES, CONDUCTOR SELECTION SHORT-CURCUIT PROTECTION, LIGHTMING PROTECTION HADIAL PRIMAny, SYSTEMS TRANSEORNER-BECORDARIES, SERVICED) HETERIKG : TRANSE ORNERS, CAPACITORS AND OTHER EQUIPNENT AND DEVICES NEUTRAL SYSTEMS AND GROUNDING ROMDWAY LIGHTING UTILIZATION EQUIPMENT AND LoxD CHARACTERISTICS JOINT GSE, INDUCTIVE CUORDINATION, RADIO 44D TY INTERFERENCE STANDARD SPECIFICATIONS, CoDES, REGULATIONS section seetion seetion seerion seetion section seerion section section section stetion seetion section noePLANWING, OESIGK CRITERIA Economies STRUCTURAL CONSIDERATIONS Wi9e2k45¢, FAULT CURRENT cRLCULATIONS VOLTAGE OROP AND REGULATION, LOSSES, conDUCTOR SELECTION SMORT-CIRCUIT PROTECTION, LIGHTKING PROTECTION AADIAL PRIMARY, SYSTEKS TRANSFORMERS, CAPACITORS AND OTHER EQUIPHEAT AND OEVICES NEUTRAL SYSTEMS AND GROUNDING ROADWAY LIGHTING UTILIZATION EQUIPHENT AND LOAD ckAnAcTER,STICS ‘ JOINT USE, INDUCTIVE COORDINATION, RADIO AKD TW INTERFERENCE STANDARD SPECIFICATIONS, CODES, REGULATIONS seeriox SECTION section section section seerion section seevion section section seerion noex200 E201 £202 205 #206 e207 208 209 E210 Ez en2 E213 Ena E23 E216 e217 E218 E219 £220 e221 E22 E21 E246 e247 2evsON 2 oowoues Scope General Defintzdons Evaluation of Costs Fixed Charges - No Salvage Fixed Charges - Considering Salvage Capital Recovery Factor Cepival Recovery Period Income Tax Factors Depreciation Return on Investment ‘Tax Adjustments Ad Valorem Taxes Teurance Operating Costs Basic Data for Computation of Fixed Charge Rate Example of Development of Fixed Charge Rate Economie Cocparison of Alternative Plans Evaluation of Losses Lose, Peak Responsibility, and Coincidence Factors Computation of Losses Reample of Loss Calculation Conductor Economies Transformer-Secondary Eecnomics Shunt Capacitor Economies Owestcriox 2 roouowrss £200 SORE This sectfon contains information of a general nature on dis~ tribution economice. It should be of interest to all who are engaged in planning, of application engineering and also to those engaged in preparing the construction information for plant extensions and betterment. Specific applica tion of the general information in this section will be found in the section covering a particular part of the diseribution system. For instance, the equations for transforner-secondary economies are in this section but tables based on the load chasacterietics and cost unite of @ particular company should be placed in the traneforesr-secondsry Section 8, See specinen Table 1602. ‘The following questions are raised by managenent when confronted E201 with various technically acceptable plane for making rajor extensions or GENERAL Dbetternents co the system: Lis What are the differences in reliabilteys simplicity or other characteristics not Suitable for evaluation on a cost basis? 2= How mich new investment does each plan require? 3+ Mich plan has the lovest enaual cost over the Life of the project or other appropriate period under consideration? ‘Te {2 essential that the derivation of tne answer co the cost question be consistent, understandable, reliable and in coaforaity with company policies. The Conponents of these coate and suggested prac-durar for developing then are given fn this section, XE201 should cover modifications to the procedures indicated in Section 2 as is necessary to bring.chen in conformity with company practice. XE201 should also inclode cost units and econosic factors a6 approved by the Company. ‘The distetbutton system of each company is a composite of thousands of items. In any particular segment such a2 services, for example, there are various sizes, types and materials used. For any given load to be served, the size of the services ay be deterntned by allowable voltage drop, economics of Conductor fixed charges Ya. ‘loas costs, {.e., application of Kelvin's Law, oF thereal capacity. Sizes of secondary conductors’ and. primary conductors also may be deternined by etlovable Voltage drop, economies of themal capacity. Quite often, engineers are reluctant to use economies in determining conductor sizes. If loads were static this prob- ably would not be the case. Hovever, distribucion loads are continually growing Gnd there ie a general tendency to install conductor sizes without coasidering the long-range econonie aspects, [t is important that the viole subject of conductor selection be carefully studied and application tables be fully understood. Capital Recovery Factor: See £208 2202 ‘Capital Recovery Period: See £209 Sorat! Carrying Charges are the total anual costs, i.e., depreciation, return on investment, eaxes, insurance, and operation and maintenance costs associated with isvesemeat in facilities, Carrying charges are sonetines referred to as Mrevenue requirenents” and for most purposes the evo terms are synonywous. See Flow Chart of Carrying Charges 201. f Debt is that portion of the capitalization of @ curporation such as mortgages, bonds ‘and short-term bank loans, on which return Ls required and paid as interest. Such interest on debt Ls deductible from incone in computing incone taxes under the present law, Certain dividends on preferred stock are also deductible and should be treated the same as debt. és» @ isee202 Beoreeiation: See £711 come Dispersion xefers to the scatter of individval retirements about Cae average Life. Equlty de that portion of the capitalization of any enterprise vhich belongs to the omers. In a corporate organization it is ordinarily represented by the book valve of cutstanding capital stock plus retained earnings (earned surplus). The earnings on equity are normally subject to incon Cex. Capital on which earn ings aro not subject to incone tax can bs treated as debt in calculating foctors affected by incone taxes Fixed Charges are those costs relating to a particular item of equipsent or unit of investment that oust be paid or accounted for cach yeer uhecher oF ot the equipment is maintained and operated, Fixed charges include depreciation, return fon investaent (interest on dabe and earnings on equity whether paid out ot re- tained), iscod cases (ohich mast bo pais telere payments for use of equity money), and ad valorem (property) taxes and insurance. Under this definition they do not include operation and maintenance expenses. Fixed charges may conveniently be Calculated so as to continue at a constant (levelized) rate each year, or in ae lsternined schedule, and be expressed as @ percencage of the cordance with a pro: original investacee! Investnent is the expenditure of money for plant and equipnent. Te i¢ used herein as the total cose installed of the electric utility facilities under con= sideration. Levelized Value (also Pqualized Value) <8 2 constant annual ancunt. The sum of the present worths of this amount over a series of years is equal to the sum of the present worths of the actual amounts over the some period. It is obtained by adding the present vorch of the actual anovnts for each year over a series of years and dividing by the sun of the present vorth factors for these years. The Interest basis and period for the present worth calculations should elvays be specified, of a series of equal quantities at various tines thereafter (a thee anount of money which, if loaned at 2 specified rate of compound interest, would yield the desized quaacity or quantities at the specified time or tines. Present Worth Factors Single Payment Present Worth Factor is the factor vhich, when multiplied by 42 desived quantity at specified later tine, yields the present worth, at a definite time, of said quantity Equal Peynent Series Present Worth Factor is the factor which, when multi- plied by the end-of-period paysent yields the present worth, at a definite tine, Of the series of equal payments. Rate of Return {2 return on investment expressed as ratio or percent of the Savestmene. "Reserve Ratio is the quotient between depreciation reserve and original plant investment. Return on Investment is the portion of total operating revenues asstgnable ko tne pavticulm investment remaining after all operating expenses, depccciation, taxes and inaurance have been deducted. Some analysts use the return rate that Is expected to be earned over the life of the equipvent, while others use min~ Amn acceptable sate of return ed expect to earn a profit margin above this sini- mum acceptable return, The eathenatical treatments set forth herein are applica Die to either concept of rate of return which may be specified by the Company. Hevenue i¢ income received from customers for service supplied. Revenue Requirenents are the annual revenues that mist be obtained to re~ cover all costs vnich include the acceptable rate of return on investment. {iis © 106Sinking Fund { a fund, provided by deposits at fixed intervals and corning at a certain rate of conpound interest, to produce a desired total anount at the end of a given period. Sinking Fund Factor is the factor vhich, when mileiplied by the total anount desied at the ond of m years, yields the required uniforn end-of-year payments. ‘The Sinking Fund Factor {a the Capital Recovery Factor less the compounding ate . There are three procedures that are usually used for studying £205 the econonics of alternative engineering, solutions ¢0 2 problem of EVALUATION System development of a more simple problen of a single addition. The OF COSTS Plrpose of these procedures is to put the costs on an equivalent basis for econonte comparison, The procedures are commonly knovn as the at wal cost, capitalized cost and rate of return methods. The annval cost method is host widely applicable and can be used for all types of problens particularly for Conpasine alzsraative. plons of system development. The capitalised cost method Sand vate of return methods are generally used where the choice is between Lavest~ mont to reduce operating cost or the continuation of the higher operating costs ithout an inecease in investment and sinilar problens, ZARGIAL COST ¥ETHOD he annwal cost method s one in which the series of annual cases of altern- ative plans are conpared £0 determine the plaa with the lovest carrying charges oF fevenue requisenenee, If the snaval costs for all plans are constant over the life of the project then comparison of the cost for one year 1a sufficient. If the annual costes for a'l plane vary with each year but the variations are vela- tively equal percentagewise, then a summation of the annsal costs for each plan {¢ needed. If the variations in the pereentage annual costs are significantly dif- ferent, shen a suanary of the annual costa on a present worth basis is desirable. ‘The prdsene vorth concept gives recognition to the fact that money can earn interest fand that a dollar saved 15 years from now is aot worth a dollar today but 3.62 at eaPatat teen cost rz00 Expenditures can be classified into two clastes, capital investments in plant and equipment, oF maintenance, operation and other ansual costa, The capitalized cost sethod 1 usually applicable where operation and maintenance charges are to be conpared vith an alternative capital expenditure. The total operating cost, fiery maintenance and operation ate said to be capitalized by dividing then by the Conpany approved Cixed charge rate, and the resulting figure may be compared ‘ith the proposed new capital expenditore. In case of alternative plans where the capitalized expenditure are nonuniform with eine aa between the plans, the annual cos: may be levelized and capitalized. The capitalized cost method ts used principally for a single installation whore it is desized to determine uhether new investment ia justified by resulting living ia operating expense. A typical example would be where transformers of ditferent characteristics and methods of cooling are being compared for = particu lar installation. Rate OF SETURN METHOD ‘The rate of return nethod is another method that ie applicable where con parisons are to be made between operating costs and capital expenditures. In this method, alternative plans are coapared by considering incremental investment as contrasted £0 increnental operating costs. The sun of the present worth of the operating savings for each year is divided by the sum of the present vorth factors to determine a levelized yearly present worth savings. The levelized present worth wvings is divided by the new investment to give a levelized rate which is con The pared with the fixed charge rate as determined appropriate by the Company. Jovelized rate determined by the above procedure should be greater than the proved fixed charge rate to Justify the incresental investuent. isn © 16station of the reve of veturn sethod involves estimating and e205 ho VALUATION _iseounting actual future revenues a5 well as carrying charges and is ir costs known as the discounted cash flow metlod. Trial computations on a §F hen state tax is deductible and federal tax is not deductible in determining seate tax 7 Tes ‘The ratio of equivalent uniform combined income tax to uniform annual return re= quirement ia: Income Tax tet Return Requivenent (ET) where! f= rate of return on investment P = ratto of debt to capitalization, 1.e., ratio of debt including bonds to sum of debt, stocks, and surplus + interest rate on debe. Yor acononie comparisons vhare exivaga lass tha cout of removal Lt of no cone fequences the combined incone tan poreton of the fised charge Tare Seconae cur = (car = wo = pt SEEDY) E where: DD: Levelized depreciation deduction for tax write-off period, spread over the capital recovery period, (See E211, Depreciation.) Straight-line depreciation factor for the capital recovery period 2 = © imeez. Depreciation is the anount provided for the prospective retire DEPRECTATIC neat of depreciable plant. For use in econonie comparison depreciation Tnpense is the snount set aeide fron revenue each year to recover the Value of the facility over its service life less net salvage (1£ any). Tor purposes of determining incone tax obligations, several rethods for computing depreciation are allowed by the Interaal Revenue Bureau, The nechod used for both tax and book depreciation has an inportant bearing on the fired carge rate. Most utilities are currently taking depreciation on their plant accouncs on the basis of straight-line depreciation over a reasonably expected economic Life and this is the deprociation charge that is usually considered in rate-raking pro Ceduress However, wnder the income tax lav, depreciation for Lacose tax pur~ poses nay be conputed on ont of several alternative bases. Using a differont basis For income eax purposes than that ueed for dezerminiug actual charges against cost Of operation vill result in postponing the payment of a portion of the income tax Hability until late in the Life of the plane thus reducing the effective cost of income taxes. in the usual utility dperation, the monfes made avaflable by virtue of annual depreciation charges against revenue are used to pay for a portion of the new facilities required. By this procedure the earning requirenents are @ function of het investment, ives, ofiginal cost less depreciation. If future costs are dis~ Counted at the sare tate used for the earnings on this net invostment, it can be Shown that the present worth of return on investment and depreciation charges are independant of the timing of the depreciation charges and are equal to unity. Capital Recovery Factor 2 the levlized annual cost for this cotal and is deterained by the depreciation period and the rate sf tetra, lssever, the relative timing of the receipt of these anounts as revenue and cho charging of the depreciation Gupense for incone tax purposes affects the present worth of incone tex costs. Tt should be understood thet in dealing with group properties, which ie the fverage life of the units comprising the group is not equivalent to the actual cost of depreciation and return because of che difference in the present worth Giscoune factor for the charges after average life chat are balanced by charges before average life. This difference 1s small (usually between 0.1 and 0.25 per Cent) and can be disregarded in most studies, If a more rigoraus solution is re- quired, procedures based on Tova Type dispercion curves may be found on pages 1598-1414 of Volume 70 part IIT of the 1956 AIEE transactions. The present tax lav wakes available two so-called "liberalize preciation procedures, in addition co the straight-line (SL) nechod (hich ie still Eequired for property installed before 1954), These are "double-deelining-balance” (DDB) and "sum-of-years-digics" (SYD). In the DDB pethod, twice the SL rate is applied each year to the unsnortized portion of the investuent. For exanple, if an investeent has @ write-off period bf 20 years, the DDB depreciation charge for the first year would be 10 percent of the initial investment leaving an unasortized balance of $0 percent. The charge for the second year would be 10 percent of the 90 percent or 9 percent of the initial {nvestment leaving an suanortized balance .. 81 percent, The vnanortized balance would never reach zero by this method so the taxpayer is pernitted to change to Straight-line depreciation on the unanortized palance sonetiae during the life of the property which {2 usually advantagecus at about lialf-Tife. This method is particularly applicable to mase property in that it does not require asintaining Accounting identity of units. ‘In the SYD method the sum of the numbers of the years of the acortization period {2 divided into the {nietal investacat and this quantity aultiplied by the funber of yoars remaining ia the asortization period, including the current year, to determine the amortization charge, For exasple, if an anortizarion period of tax de Ets © 1ez 20 years 1s used, tho aunbass 4 through 20 are added, which resulte DEPRECIATION in @ total of 210, The depreciation charge for the first year ie then «cont'D) 20/210 tines the initial tnvestment and the charge for the second year is 19/210 times the inicial dnvestaont. This sathod is readily ap- plicable to major projects, che accounting identity of which i# main- Eained, SY yiolds larger depreciation deductions than DDB after the second y higher equalized deductions, as shova below, for the 30-yoar "guideline IL electric distribucion installacions and 7 pereent present worth discount rate. INCOME TAX DEPRECIATION DEDUCTION EQUALIZED OVER GUIDELINE LIFE OF 30 YEARS No Salve _SRSelvane # Gain ‘Gain Over over Deduction SL Dedictson SL SL = 30 Years ose 3.166 SYD - 30 Years 41356 1.023 138.972 DDB = 30 Years 4105501722 31852 1686 % Used for illustrative purposes although the Internal Revenue Code provides that salvage which dose not exceed 10 percent need not be Taken into account with respect to depreciation of tangible personal property acquired subsequent to October 16, 1962. Recomended practice tor econonic studies, absext compelling reasons other wise, {2 to compute the income tax eonponent of fined charges on the most favorable available basis, that 1s,SYD. Hosever, if a utility company is using DDB or other rethods for incone tax purposes, this basis should be used for ecoonte comparisons. Stntlarly, nnlass a company haa teasone for veing = different amortisation period, recomended normal practice is to-use the estinated supportable 1ife of che facility involved or, if no such life 12 established, che “guideline” life of 30 years announced by the Internal Revenue Service in July 1962 for electric trans Mission and distribution installations. ‘Although this "guideline" life say eventually be subject to revision based fon the "Reserve Ratio" accumulated by the taxpayer, {t'seens unlikely that such yevisions for long-life property would cone up in the near future, and, a8 to any Such project, future revisions (if any) vould not be retroactive, so that, con- sidering present worth discounts, it seens improbable hat equalized fixed charges would be Significantly affected.” SYD has a higher allovable "Reserve Ratio" than DDS, corresponding to the higher allovable depreciation deductfon. hile the deduction for depreciation used in computing the effect of income taxes should sormally be the available basis that yields the largest equalized deduction, and hence the lovest equalized tax (uhose asis presently 12 SYD), many utility companies are using, and expect’ to continue using, other methods for’ com puting the deprectarion deduction for income tax purposes, If the results of Study are significantly afracted by the treatacut of depreciation dedvetion for income tax purposes, the merits of the alternative trestment should be given due consideration, 2 The equalized annual deduction”for the SYD'ucthod nay be computed for any tax write-off period (w) from the fornula: & : wos Ewe D Eitgx © vseau were Denecrara G, = Capitol Recovery Factor for the Tax ¢ ww” Oe leiteroft period w= (cons) ec Gee D, = Straight-line depraciarion factor for wT UN the tax uriteroft period w= 5 = Rate of Return IE the tax write-off poiiod is less than the capital recovery pericd, the deduction should be spread over the capital recovery period by multiplying it bY the ratio: G Ss % mere ¢, is the capital recovery factor for the capital recovery period and G, 18 the sane as used in deternining SYD. ‘The equalized Did deduction for typical return rates and tax write-off periods are given in M206. This value should also be epriad over the capital Ferovery perc! as chown above. For straight-line method of determining the incane tax deprectation de~ duction, the formula 1 w=? may be used and, as in other methods, the adjustment to capital recovery period ust be made. ‘The basis for income tax depreciation deduction excludes certain itens in cluded in total investaent and written off during the capital recovery period, in particular, interest during construction which was capitalized and property taxes during construction which were capitalized. The return on investment should be adequate to attract new invest~ £212 nent. The return on investment ust satisfy dabt requirements as well RETURN OW 8 provide adequate returns to che owners. INVESTENT a> Without Inflation ‘The Rate of Return to be used is the rate that is expected to be earned each year on the unamortized balance of the actual investment during the useful life of the facility concerned, Theoretically, for econosie conparicons, the real cost of money {2 the proper criterion but this is usually indeterminate - real cost of debt money over the Life of the project may be expected to approximate present~ day interest cost for bonds, but veal cost of equity money depends not ouly on price-earaings ratio of stock currently being sold but also on many other factors Encluding the high subsequent earnings vbich, {avestors expect and which the cos pany in the future zust pay out if it 1s to maintain its financial position. For electric utilities in the U.S.A., the proper race of return is usvally in the order of 6 percent to 7 percent and may be slightly higher for gas utilities, This sane rate should usually be used for presant worth computations. itsen » - Considering Inflation RETURN ON Inflation affects the various’ costs Lavolved tn the operation of TWWESTENT 4g utility system to varying degrees. For this reason it is usually (cont'0) better to make an initial analysis excluding the effect of inflation and then, a2 a separate step, determine che effect of inflation by applying appropriate factors to the respective cost items. In making such an analysis, care should be exercised co assure consistancy in the assumptions rogard- Ing the effect of inflation on operating costs, construction costs and financial charges. Care should be exercised in attempting to determine Rate of Return fron the results of Aegulatory Proceedings, Under regulatory procedures the cotal dollars that a utility is permitted to earn during @ test period are usually determined by applying er "i!lnwatte rats of return” toa "rate base." The effect of inflation may be recognized by making appropriate adjustments in either or both of these quantities. ‘One allowance that has sometimes been made is to adjust the "rate base" for inflation by using "teproduetion-cost-new less depreciation.” Since the infla- tlonary trend in construction costs has been about equal to the annual depreciation Fate during recent years, the "rate base” remains absut equal to the original cost. ‘Thus the equivalent equalized return Le increased fram the capital recovery factor mines straight-line depreciation to the return on undepreciated plant, and the new capital recovery factor becomes the cost of money plus straight-line deprectation. If depreciation i¢ to be allowed on "roproduction-cost-new less depreciation” a ‘sinilar adjuetoent ust be nade in the depreciation charge. Whenever a fair value Tate base” ie taed Cur Davie muse bo determined to arrive at the appropriate Re~ turn Rate. ‘Another method sosatines used co reflect the effect of inflation is to ine ‘eveage the return rate that is spplied to che undepreciated plant. Alternatively Adjwarments may ba made in both the rate of return and the rate base. If che Cqualices rate of return Le to be determined fron regulatory proceedings, consider tion must be given to the particular formsla or philosophy used in the proceedings. The methods for computing fixed charges hereinafter discussed do not include any provision for inflation, but assume this will be handled separately. They assume that the equalized return rate may be deterained fron a forecast of future Gnterest rates and earning requirements, ens ax Adjustnest for Inceative Tax Oesdit a The 1962 and 1960 Sncome tax lave provide an tavestaeat cay credit tae an incentive to neu construction and sodernsastions For utility Projects this credit is 3 percent. The 1966 law also provides that this credit shall not be deducted from the investrent base for subsequent tax depreciation purposes. It should be noted, hovever, that the credit for a given year is Limited to $25 000 plus 25 perceat of 5 the grots tax in excess of §25 000. Any unused credit may be carried back for three years and then carried forward for five years. The invertaene on which ehis percentage credit is computed exclu depreciable itens and certain items which are not deened to be directly utilized inmanufacture of production. These exelided {teks are capitalized interest dur- ing construction, fupitalized taice during construction £f paid directly by the utility bue not Lf paid by the contractor and included in a lusp sum price, general structures, land and land rights ineluding landscaping and general grading’ (but hot grading for structure), pension plan costs for utility personnel but aot for contractor personel, and coats incurred prior to January 1, 1962. The amount of these exclusions may be approximated from the detailed cost estinate for the Project. £25 © vsThe effect of the tax avestment credit can be computed a6 an e213 ‘adjustment to the incone tax otherwise computed. Thore follows an Tax illustrative computation of auch an adjustment. Tn this {1lustvatlon ADJUSTNENTS the aggregate exclusions from the total savestwent to give the iavest- (CONT'D) rent subject to the incentive credit are assumed to be 7 porcent, che capital tecovery period is 30 years, the composite tax rate is 48 percent and the precent vorth discount rate is 7 percent. (EREECT OF 3 PERCENT TAK IvesT¥eyT caEDIT (7 Percent Exclusions) ‘tax Credit, End of First Year (3% of 931) 2.7% Present Worth at Beginning of First Year; 1/1.07 2608 Reduction in Revenue Requires to Peovide Recusn L 608 at Trace = bg (2.608) ~ 26 5.01 Equalized over 30 Years (C= 8.059) 406 Tax Adjustnent for Interest During Construction This adjustnant (8 usvally negligible for distribution work due to the short constuction period generally involved. However, it should be considered whenever the construction period extends for about ono year or nore. Tnterest during construction is usually conputed by applying the specified return rate on a monthly basis to the total expenditures to date at the beginsing Of the month, For a typical stecarele eri: -ratsen with the usual construction Schedule and using 7 percent retura, the iaterast charge will anount to about 6 percent of the total cost of the atation although ie vill vary depending upon seme of payment for major equipacat. Tntecest and tance during conactction usually are capitalized but for eax purposes are elaine! a2 tex deductions in the years i whlch the costs are ine furfed. This affacte the computation of equalized fixed charges in two respects: (Q) the praoperation tax saving, which arises because of the construction of the project, represents an initial credit to the cost of the project and (2) because they are not allowable in the basis for tax depreciation deductions, the tax de- preciation deduction a8 otherwise computed sust be scaled down proportionately. ‘These effects are also computed a# an adjustment to the incose taxes as otherwige computed, The credit for preoperation tax saving nay be assumed on fan average to de obtained one year before the operation date, and hence, in an Gcononie analysis, should be increased by one year's present worth factor. The eredie then 42 tobe equalized over the capital recovery period. ‘The adjustment if computed as follows for interest during construction of 6 percent of total cost of project using retura rate of 7 percent and a tax rate of G8 percent. COMPUTATION OF TAX ADJUSTIENT OR INTEREST DURING CONSTRUCTION Preoperation Tax Credit oe errs ore tox Saving By x 6.00 +s. a. + s.926 Laie Equalized over 30 years. (C, = 8.059%) Gis © 1mGONPUTATION OF VAX ADJUSTMENT E23 Tax FOR INTEREST DURING CONSTRUCTION jogusmenrs eau" by «cour'D) Bost-Operation Tax Increase Tax depreciation deduction as computed 4.4990 Reduetion for construction interest, 6% x 4.499% = 5.270 T : Tax inevease, Ey x 0.270 = 0.209 = 0.229 Nee reduetion, 0.478 ~ 0.249 In case the project investment includes any capitalized taxes during con struction which Itkewise are claimed as cax deductions as they occur and are not Allowable in tax depreciation base, they shoilé be handled sintlar!y, ne sore simply dded Lo the capitalized interest during construction. . E214 ‘The ad valoren taxes usually vary fron comunity ¢o comunity and AD VALOREM may vary considerably over slong period of tine. The trend of these axes Taxes should be considered in determining their component of the fixed charge rate. eis. Insurance costs may vary with type of equipment and its Location. INSURANCE «As with property and other taxes the trend of insurance charges should be considered in determining its component of the fixed charge rate. E216 In saking econoaie comparisons of alternative factlities decisions OPERATING are required as to viat operating {.r., operation and, naincenance cost costs itens are to be included in the comparisons. If aggregate cost dif ferences will be the same uhether or not # particular operating cost item Se included, then it may as well be omitted. However, if a cost item will change the aggregate cost difference, then it rust be included Sf fe {s subscancial. Costs used for economic conparisons should include changes in present oper~ lating and maintenance costs oa existing equipaent if this occurs. For exaaple, the addition of 4 second transformer in a substation say facilitate the renoval for aintenanee and permit a reduction in maintenance cos: of existing equipsent in ex: eee of the maintenance which it incur Where operating expenses are to be considered they should include geuoral supervision, fringe benefits for labor, insurance, purchasing, expediting and Other indirect costs as may be associated with labor and materials expenaitures, Lf they are of sufficient anounts to be of significance. ‘The folloving data are required for computing fixed charges and, E27 BASIC BATA _{£ actual data cannot be cbtainad, estinates should be mad FOR COMPUTA 18) Capitel recovery pericd for amortization of the THON OF FIXED investment (eich, in sone cases, may properly be (CHARGE. RATE lees than the probable operational Life of che property). b)- Rate of return on investrent (sonetines referred to as "cost of money") this sane race should be used as the present vorth/discount rate. c) Proportion of debe ce total capitalizstion and interest Tate on debe. 4) Allovance for terminal net salvage, if any such Salvage is co be caken into account for auorti- zation, e) Percentage of interest during construction in- cluded in iavestnant. is Om£) Basis of federal and state incon taxes, tax rates, en7 tax weite-off period for depreciation deductions, BASIC Data method of determining depreciation deductions, and For courts. salvage allowance (if any). Hox OF PL #) Initial incentive tax credit and portion of invest- (uaRce RATE sent to uhich it applics. ccoxt'p) hy Property tax rate, exprossed as a percent of total initial tnvestnent, including ed valorem taxes, taxes based on capitalization, ete. 4) Property insurance rate, expressed a8 a percent of total investnene. J) Any other annual costs that are related to the fanount of lavestsent. The procedure illustrated below is applicable to public utility E218 property and is a recomended approach to economic studies for system EXANPLE OF Planning or for econonic conparison of equipment and other system con DEVELOPENT ponents. oF Fixe a = Basic pat (CHARGE RATE Capital recovery period a 30 Years Rate of Return Debe 55% at 5.007 Interest 20275 Equity 45% of 9.444 Return ous Total Return £700 Salvage (no net salvage assuned) 00 Capitalized Interest (assuced to produce tax savings one year before comercial operation 06 Federal incona tax rate 48 State income tax 00 Tax write-off period 28 years Tex depreciation ~ SYD, DOB and SL. Book depreciation Straight Line Incentive tax credic 3% with Th exclusions .0279 ‘Tax credits usable against other incone in the year they occur Property tax rate 017 Property insurance rate 001 Interim replacenents Reflected in Capital recovery ; period b- Sumary of Fixed Charges gym og Sk. Capital recovery factor (par. e) .08059 08059 0059 Income taxes (par. a) 00961 01197 Zo1si2 ‘Total Financial Fixed Charges 109000 109256 709871 Property based taxes 01700 01700 -01700 Property insurance ‘00100 00109 ‘00100 Total Fixed Charges 10800 711056 -11671 fs © 16e218 ExaWriz OF DVELOPMENT oF FIXED Chance RATE (coxt'n) b.2 BEfoet of Salvage, In eases where salvage is a factor, ‘dove Tia charge vate should be multiplied by the original investuont less salvage (L), after vbich the Folloving component is added, to the nev total: a [fren geeasy As an example, the commutation of fixed charge rate for the SL depreciation case assuming a 5 percent salvage vould "52 2261 0.0.08) + 05[ 07 oGor.0079) 48 «ox « co] =.11087 + .90636 = .21723 See F210 for an example vhere salvage has a greater effect fon the fixed charge Fate. Retuen ond Capital recovery Factor (30 years) ras 9? o, = gr 08059 or C, nay be found {n the compound interest eavl2 M2030 Inrome Tax Computation Y= $¥0 Tox Deprectation SYD tax depreciation deduction for a 28 period equslized over, a 30-year auortization period 6 2% «, sme ose wrD *F, eve G, = capital recovery factor for w (28 years) mere Gy 2 98239. (Eeon table H2030) ili py «be dy = 035716 = Capital recovery factor for 30 years "8 [08059 (from table 203) Depreciation Deduction (28 years) 198239 = 035714 <5 OT) 29 Equaliged over 30-year amortization period = .06599 Where D, = Annual depreciation charge for n (30 years) 1 gp + .os33 0275 08089-0309). oyase ise © meRequired tax incone aiter taxes deduction - interest deduction) 108059 - 04498 - 01656 = 01705 Income tax before adjustments (©, ~ depreciation (taxable incone after taxes) TF 48 = cous) = 01574 Tax adjustment for Capitalized Interest (son pars) -.00228 Tax adjustment for Incentive Tax credit (fron par. £) 00404 Incone taxes after adjustment 01537 = .00229 - .00404 00941 2 DDB Tax Depreciation Capital Recovery Factor ¢, (30 years) 08059 DDB tax depreciation deduction for a 2eyear vriterotf period Grom Table Mab or formula ox ¥202= .0:297 levelized over 30 years coves 2808, owes oo Interest Deduction = p ¢ C22?» 20275 228088 = 03833) 01856 “oF Required taxable incone after taxes = 108059 - 08203 = .01856 = 02000 Incone tax before adjustment = iy Gvoquised income after taxes) 4g - £8 ¢.o2000) worse Tax aGjuscnent for Gapitattees Inverese (pars 6) = 00245 ‘Tax adjustment fo" Inesative Tax credie (par. £) = = 00408 Income tax after adjustoent t 01846 - ,00265 = .004047 = 01197 © tee Eni EXAMPLE OF DEVELOREN OF FIXED ‘CHARGE RAT (cont)e218 EXAMPLE DeveLoraer oF FIXED cuance kare «coxt'p) 3+ sb oveey Factor C, (30 years) 08059 Capital Reco SL tax depreciation for 28 years 1 write-off period = 45 = .035714 Lavelized over 30 years wo3s71e «$8058, = 03493 08239 Aa Toterest Deduction + p i C2) 027s MORE = 20002) 01887 Requied taxable incone after taxes ‘o80s9 = -03493 > 01857 = 02709 ncone tax before of ustaent 48 7 ~ $ c02709) 02301 ‘ax adjustment for Capitalized Interest (par. e) = 00285 ‘Tax adjustnent for Incentive Tax Gredit (par. #) = : 90404 Income tax after adjustment 102501 = .00285 - .00404 = 01812 © ~ Tax Adjustment for Capitalized Interest T= Freoperation Tax Credie (ane for SYD, DDB and St) Construction Interest (fraction of total cost) — .06000 Tax Decrease = t 48 Tp (05000) = $8 (0600) 05538 Present worth 1 year later 1.0700 ¢.05538) = .059257 Equalized over 30 years 058257 (,08038) = 00478 2 = Bost-Operation tax Increase xD BSL ‘Tax deduction for depreciation as .04498 04203 .03493 computed t Reduction for Capitalized Inerese 06 (.04498) = .002699 06 (04203) = ‘002522 os (‘03493),= ‘002096 nsw © tee218 Be Coven - soos soon eerie 7 (coer) HE onze woos £ ~ Zax Adjustnent for Incentive Tax Credic Tox credit at ond of first year +93 (.03) 02790 Present worth at beginning of first year (027900) (.934579) = .026075 Reduction in revenue required to provide +0700 return after taxes 026073 2601S = oso14s Equalized over 30 year period 050144 (.08059) = 00408 4 ~ Equalized Return for Periods Shorter Than Ezononic Life In cases vhere equalized returns are desired for shorter periods, the capital recovery factor above will be determined for the’ shorter period and then multiplied by the ratio of investment to be anortized in that period, To this figure ix added the rate of return multiplied by the ratio of investaent Tenaining. The remaining celeulations will proceed a2 before. For the example given and assuming equalization for the first 20 years: CAPITAL RECOVERY FACTOR = 9439 39 ao . Return + Anorttzation = 22 x .9439 +22 x .07 = .08627 ‘The choice anong alternative plans requires competent judgment to E219 properly assess the factors which nay be involved. Factors of reliabile ECONOMIC ity, public acceptance and safety may be difficile to equate to costs, COMPARISON which would permit an arithmetic comparison. Estimates should mininize OF ALTERNA: the suaber of these factors not readily eveluated by assessing costs to TIVE TANS equalize such factors whenever practicable and aaking the econoaie evaluations as conprohensive ae conditions permit. Studies involving a series of expenditures ver a period of tie should allow sufficton duture period to properly reflect the full effect of the expenditures involved. Comparisons of expenditures which vary appreciably over tine require use of present worth factors to relate costy to a common base. The effect of price trends on long-term comparisons is difficult to evaluate and is often ae= glected. Evaluations shoving the effects of assuned price trenda are helpful in Sone instances. Sone alternative plans may differ so greatly in costs that the economic chotee 4s obvious, others say require rigorous arithaetic comparison involving the Present worth of annal costs over several years. The probable accuracy of the estinates should be considered in evaluating thr alternatives and should not be obscured by using more significant figures in the arithmetic than are justified Sythe eatlantens [EBASc © iee219 00 ConPARTSON OF Aureanative PLANS (CONT"D) a cure Identical capacity and estimated lite. annual cost of Losses is $100. Annual Gost Comparison Fixed Operation Alternative Charge ond Proposal Inyestoant 17, Maintenance % “Fr 000 Fd «~~ s120 5 2400 "288 120 Capitalized Cost Comparison pifference in Investment (B - 4) (a3) 350+ I Digference in joss Cost Cepitalized Cost = exeluding losses are $120 per yoar for either cransforner cost of transformer A {5 §2 000 and ts levelized annual cose of losses Installed cost of transformer B is 52 400 and ite levelizes An example of cosparison by anquel cost, capital ‘zed cost and rate of return methods 4s given below for two transformers A cna B each having Operation and maintenance casts Installed Levelized ‘annual, Total cost of annual, “iio $50 100 508 3400 850 = 5416 Rate of Return" Nethed Prospective Saving = (difference in loss Cost) = $50 Increnental Investment = 9400 ews "Rave of Return” = 752 In each caleviation transformer B is shown co be slightly more econentesl than transformer A. than those for "A". By the annual cost method the annual costs of The capitalized cost method shows chat the difference in loss BY are §2 per year lece cost with tranaforcer B vould justify a capital expenditure of $16 more than the installed cost of 8 The "rate of return” method shows a rate on che increnoaesl investoent slightly in excess of the 121 required to satisfy the fixed charge re- quirenent for this type of plant. ‘The annual cost comparison not only indicates hich plan is nore econoniesl but also by how uch one plan ie more econonieal then another. ‘An example of a cooparison of ennusl costs using present vorth factors is how An Tables 4220 4, Band C. Comparison of the two plans on the basis of investment would show 2 $40 000 ade intage of Plan A for both spplicstions, Dut comparison of annual esrrying charges levelized on s present worth basis shows that in area X, vhere the growth rate is high (about 13.5%), the larger transforser vould be economically justified initially and the present worth of the §1 000, difference in annual carrying charges, would amount to $14 1:90 for the 35-year period. However, in area Y vith @ lover vate of growth (about 5.5%) initial installation of the saaller transforaer would be economically justified and the present worth of the $1 830 difference in annual carrying charges would fount ¢0 $26 500 for the 35-year period. fan evanple of an ervuel cost comparison ef alternative plans for developing 4 dtecribution systen at primary voltages of 4.8 kv, 9.3 kv and 22 kv, given on M221, shove that Zor the sample problen the 22-kv, plan {s more econcalesl for the 20-year peried. The cost figures show that the comulecive annual costs end che cunulacive present worths of the ansusl costs for the 22-kv plan exceed those of the alternative plans for 13 years and then becone Less ‘This example shows the value of making the analysis for a long period on @ present worth basis. Te {a found chat the present worth basis, Sncreasi 43 decreasing. wings by using Plan C are vell worthwhile even on a ‘Algo, it Ss significant chat the present worth of the yearly from the léth year of Plan € 4s not only less than in Plans A and 8 butcue of he teportont consiserations in the planning and de- £220 sign of a sroving distrtoution systen £2 the cost of losses in:pover, _FPUMATIOE nergy, and ceactive hve. Generally, losses aay be reduced by greater Anvesement An Lines and equipnect and ic {5 necessary to determine 1f the decreased cost of losses justifies the increased investment ‘The demand cooponent of 1oss cost should be cakes into ace count if the loss increases che peak loads on one of more pares of the system. The increased peak loads will eventually require increase in the load-carrying ability of each system elengnt which participates in generating the power o in transmitting it to the point where che loss occurs, The power conponeit of last cost is the estinaced effect of the loss on future system capacity costs. The capacity required to supply losses should include the sane allovance for reserve or spare capacity as will be maintained for peak loads, The investment in future capacity additions should include working capital for materials and cupp!ies ari prepsid expenses. The annual cost of power loss consists of fixed charges on the investment im increased fire capacity required to supply the loss, plus che addi- tional operation and maintenance expentes which are proportional to capacity. The cost of the energy conponent should be included for the sual case in hich losses increase the production expenses of gener~ ated or purchased energy. In general che cost of energy losses is the product of the kvh loss in the equipment or circuit being considered (neluding losses on losses when applicable) multiplicd by che nit ‘eneray coat at the source ‘The cost of Soth the paver component and energy component of loss should usually be based on the cost of planned generating capacity additions, Tf it 4s ~xpected chat a substancial part of future energy requirenents will be purchased, the power and energy losses may be evaluated at the estinated denand and energy’ rates for such purchased power. If the facilities under consideration are to be renoved in a short time, and hence do not have a sustained effect on additional capacity requirenents, only the cost of energy loss need be evaluaceds usually for such a case the unit cost of energy may be assumed to be the average unit cost of energy fron existing generating stations, éis6 Ovae220 evaLuation oF Losses. sonT'D) e221 Loss, reac RESPONSEBILITY, AND c01561 DENCE FRcTORS ‘The cost of reactive loss should be included vhere it has 2 significant effect. Reactive loss is computed for the maximum denand of the syscon elesent under consideration. Reactive loss is evaluated at the annual cost of che equipsent (generally capacitors) installed on thor part of the system which resules in miniqun eost for supplying the reactive lose, Definitions of factors that are used co determine the char- acteristic of loads are given in Section 12. A usefel factor in study~ ing losses is called the loss factor, which in effect can be said to be che load factor of the losses or: Loss factor is the ratio of the average loss co the peak loss, For any given load st may be sone value between the load factor and the square of the Load factor. If load has a sharp peak and then a fairly steady load of @ fixed valve for the period under consideration, che loss factor is the load factor squared. If the losd renaing at its peak value all the tine, it is on, and is zero the rest of the perica, the loss factor is equal to the load factor. A frequently used equation for determining the loss factor of Aistetbucion cyclic loads when only the load factor is known is: Lots factor = 2 (load factor) + (Lea) (Load factor squared). The term "a" varies fron about 0.2 to 0.3 for yearly loss factors in Aistetbueton. Recent extensive tests in St. Louis on 30 distribution eransformers, where air conditioning is predominant in the sumer, indicated thet the yearly value for "a" $3 0.2, While in most work with losses, the use of a loss factor is sufficient, the use of the equivalent hours of loss 1s sometines move convenient. Equivalent hours of loss jfor a period are equal to eneray loss for the period divided by the maximua demand. Equivalent nour fare the total hours in a period multiplied by the loss factor. Losses vhich are constant in magnitude, such as core loss and auxiliary power of transformers, are assuned to coincide with che peak loads of all systen elements. The peak responsibility factor of such Eiise Oiselosses Ls unity, For resistance loss (copper loss) which varies asthe £221 square of the Load cureent, Ee poak reeponsibility factor of the tons LOSS, 2414 | fe the square of the peak responsthiliey factor of the load st accom ND COTACIDEN rerors panies (cont'd) Computation should be mace in tems of cotneidence factor where the peak cesponsibiliy £4 n08 knows of when historical compen ents of peake are not scable ovee long periogs of tine, Cofsetdence factor may be estinated from the catia of the losd factors of the sy5- ten elenente involved. or example, assune the Load factor at the customer's service is 15% and the aysten load factor £8 50%, The com ncidance factor at the generating station of the customer's Load és 15/50 or 0.30. The square of the coincidence factor {s approxinacely equal to the peak responsibility factor of the Loss, The cotnetdence factor (peak responsibility factor) of the Toss tn che service 45 0.30 squared oF 0.09 over lose should be computed for the naximis denand of cho ©222 system clement under consideration. The snereased capacity in say SeMCauars other pert of the system required to supply losses is the product of tthe losses (including losses on losses when aypiicable) muiciplieg by the peak responsibility factor. Peak responsibility means che amount of load added by the losses being considered to che load of che system elenent at the time of {ts oun peak load, Use is made here of the con cept of peak responsibility ratter than load diversity to make che significance of the time elenent clearer. Energy loss in kuh may be conputed for the systen elenent under consideration by multiplying the kw loss at saxinun demand by the loss factor and the total number of hours in the period. For Losses which are constant in magnitude and continuous, such as core loss, loss is multiplied by the total sunber of hours in che period. For losses which ace constant in magnitude, but not continuous, such as auxiliary pover for forced-cooling of trangformers, the hours of operation are determined by inspection of the load-duration curve for the equipsent concerned, Losses on Losses, - Losses which occur in one part of an electric system inpose adéitional leads on other parts of the system back to the source. The additional losses caused by the greater load Ais, © weexe comPurarion oF Losses, (cont 9) An the rest of the system should be added to the pover and energy losses computed for the elenent under consideration Growing Load Where the load is growing rom year to year, for convenience in calculating, a levelized value of losses for any period of tine may be determined. The period used should be Long enough so that the pres ent vorth of changes in losses outside of che period will not be large ani not ina aivectinn tending sc change the conclusions of the study, For the case where load increases at uniform rate, the period for the load eo reach the capability of the system elenent is generally adequate. ‘The Losses for che midpoint of ehis period will usually be a reasonably approxinate estinate of the levelized value, For a period of uniform growth, the following equations pertain: 2 Accumleved peesent worth, Ef pwA, of I? losses, for years. 1 to 0 inclusive, of uniform grovth és: A, 20 Dopwa = 1 re 4 teeer are Levelized value, Ay_,, of 17 losses for yeare 1 to n inclusive, of the above accumulated losses is io fasp® =] cm, Lea tener +e” Since che sum of the present worth factors from year 1 to any year y, inclusive, equils che reciprocal of the capital recovery factor for y years, a levelized valve for one period can be converted to a levelized value for # different period beginning with year 1 oy multiplying by the inverse ratio of the capital recovery factors. ‘cox, © v2e222 cowpurarion OF Losses (conto) Growing Load Followed by a Constant Load then groving load 4s followed by a period of constant Load, the equations are simplified by treating the Final year of growth sa hich the constant Load is reached, as the First of the (y-m) years of constant Load Equations for the present worth at tine 0 and levelized value of the 12 losses resulting from the combined growing and constant loads, Present worth, EY pw At at time 0 of losses for period L-y inclusive: 2m Gs Ly le oe Beek Ta, “ohn, t [Doge e ee «Cw, B) am i ee = AL (CRE ry Oe 2 were A, = 17 losses in Lot year ‘uniform rate of growth e y © total number of years considered n= mumber of years of groving Load (oH), = capital recovery factor at cate of retuen on net Anvestrent, ¢, and period of y years. (CuP), = capital recovery factor at ate of return on net Anvestnent, r, and period of m years. (Pet), = present vorth factor for year m at rate F. she capital recovery factors and pfescnt worth factors are avatleble in the tables 1202 and #209. The present worth tables may Aso be used co determine the approximate values of (1 + 8)" by taking the reciprocal of the present worth factor for rate equal £0 & tnd tine equal to 22. Present worth factors for odd values of # may be approxinated by interpolation G8 @ nacams : Exanect oF distetbution transformer in 9 residential district. The full load losses {psg CALCULATION The problem 4s to evaluate the Losses applicable to 8 S0-kva P PP are ascuned as follows: ke Copper Lose “615 Reactance Loss 850 sxeitation Loss 1750 Gore Loss 23 me sf ‘The aysten data ascuned for the exanple are shown in M22A, and the evalustion of losses for this exanple is shown in H224B. The fixed charges are assuned to be 12%, which includes 2 62 rate of return. Changing Loads - The énitial losd on the transformer is a8- yximum load on the transformer is the suned to be 33.3 kva. The thernal Linit of 66.7 kva, at 4 4.43% load increase a year it would take 16 years for the load to reach the maximum. The tine at which the levelized value of 1? losses for the 16 years occurs is 7.3 years when the levelized value ie 1.88 tines initiel loss, AE this time the 17R loss $s 563 watts and the 1°x 10s ss 710 vars. elevents assumed for Ehis exonple. Fer copper loss, if either the power or energy lose 42 known, the other can be determined by using the equation for the ratio of percent energy loss to percent pover Loss, which 4s equal to the loss factor divided by the load factor. For core lose, ratio of percent energy loss to percent pover loss ie the reciprocal of the load factor Peak Responsibility Factor - In che exanple the peak respon sibiiity factor for the copper loss is taken #8 the square of the coin- cidence factor of the load. The coincidence factor of the Load is cal~ colated from the ratio of the load fsetors. Annual Cost of Pover Loss - The investments in various systen elenents at the tine of eystem peak capability assumed in 224A take ine 0 account reserve capacity end vorking capital. The tavestaents at the ine of petk of each aysten elenent is calculated using the load coine cidence factor and an astuned ratio of increnental to average investment per kilowatt. Eisans EXANPLE OF loss caLeveerioN (conr'0) eau ‘coxoucraR Ecaxonics, ‘Total Annual Cost of Power and Eneegy Loss - In the usual case, 125 in the exanple,” the annval cost of power and energy loss ts calculated per kilovete of Loss, This value 1s then available for use in evaluating the calculated loss for the various conditions which may be assumed Evaluation of Reactive Luss - In the example the variable (14x) reactive loss {4 evaluated at the annual cost of svitched capacitors on the distribution primary. Since this reactive loss is computed for the tine of che distribution Cransformer peak load, the pesk responsi- bility faccor on che primary of the transformer copper loss is appli- cable. In the usual case the exciting current does not have @ signifi- cant effect and vould not be evaluaced, Tt is included in the example to illustrate thar constant reactive loss is evaluated at the cost of unswitehed capacitors. Total Cost of Losses - The total cost of losses per year are: Copper Loss Cost = $16.30 Gore Loss Cost 14,50 1k Loss cost - 45 Exciting Current Loss Cost = 32 oral $31.57 per year ‘the total yesrly cost of a conductor in place soy be expressed by: a costs or the coste that do not vary with con ductor size within « wide range of sizes. = Yearly investment costs that vary directly with area of the conductor ia dollars per Men per Mit, ies, dnerenental costs. = Yearly cost of losses at the point of inctella- tion in dollare per Mea per MFt per kva. 1 load on the conductor in anperes 4 = area of conductor in Nem length of conductor in Mft Gis © weeeau by coking he f1est decivacive of egeation () wish seepest £0 "W" ent A iscag Econowies (conto) ole a=t| Zi? ~ nose economical conivetor (2) ay uy ‘This solution gives cise co vhst 1s know as Kelvin's Law, which is fenerally stated chat the most economical size of conductor 1s that for Shich the fixed charges on investment is equal Co the loss cost. Tt should be vand vith civeretion since the iavestnent must be on an in crenental basis, In order co use more readily available values in equation (2) the following substitutions may be sade: we PR, Ay Toe aoe ° Ps cost per kw-year of loss in dollars 2, = tostatenve of any size conductor MEt long with area A, Mea 4 ame conductor © = yearly fixed charge rate in percent ‘The investment cost of @ conduetor in place Le expressed athenatically by the first two ceras of equation (1). Tf conductor Costs are plotted with che cost per vnit length as the ordinate and the conductor size as the abscissa, the graph should be very nearly 2 Straight Line. The ordinate at zero conductor size will give the base Cost Band the slope of the Line is the incremental cost ox the cost per tenie area uhich is a constant. Equation (2) is based on incremental costs only. [an interesting and importent consideretion in conductor eco- nomics is that prior to installation the load for which a conductor is, the sost economical 1s not necessarily the most economical load for the conductor after it is installed, Before inseallation one has a chvice Of conductor sizes for a given load and the size chosen affects the in- Grenental costs only. After installation, if/there is need to carry nore curcent beyond that for vhich the conductor was selected, a new cononic situation has developed wherein increased loss cost must be balanced against additional expenditures for Increasing conductor capa- city. This usually permits increasing the load on the conductor to Values which would be higher than original economic value and Linited thermally under emergency conditions, or by voltage under peak load £isw © sceeau conouctoe (cont+0) Growing Los ‘The last equation én £222 expresses the levelized value of losses for a load growing st a uniform eate g form years, Followed bya constant lesd for yon years. The ratio of the current I producing Ter ieuelized value of losses to the peak current the first year 5), ices 1h, = By MA.) a 1/2 ret, Gy My) Substituting'the above value for I {n equation (2) above and using the ratio of Ajy /A, fiom the aforenentioned equation of £222 gives the folfoving ae the most econemical conductor area a for the otal period of y years: 1A oy times the square root of a (cre), fas om ova + asa” 6 om Ly 3} a a | ane (in, «Gm, } + pesignate che square root of this factor as the equalized loss cost factor. Equalized toss Cost Factor (ELC) of equation (1) 2 10, sue 5 1 Lae 1.26 5 20 140 13 10 20 ue 60 © 60‘The development of the most economical secondary and trens- E246 TRansronner= former combination for any given load (Fixed or changing) per custoner & o for any given load (# ining) ee should include che following: Ecavowics 1 = Determination of lowest cost conductor for various assured Layouts and configurations of secondaty. 2 = Determination of size and characteristics of transformer to cerry the load, for each assumed secondary layout to determine trans- former costs, 3 = Determination of the lovest cost combination of transformers and secondaries. It ts neces sary that conductor temperature, load voltage drop, and flicker voltage drop of the most ‘economical conbination be within seceptable Linits. In certain situations vhea voltage Limits are reached vithout reaching maxioum transfomer capability, it may be more econon- Seal to use a larger conductor than that de termined by the proposed method. Economical Conductor Size far Fixed Loads - Two-way Radial Secondary The most economical size secondary conductor is one for which Ancrenental loss cost is equal to carrying charges on incremental con- ductor investment, The following equation is developed by equating the incremental lose cost to the carrying charges on inerenental investment and solving for the most economical size conductor in Mem for a two-way redfal secondery: oe ka ares of conductor 4a Mem where a Ne number of custoners on secondary one-way from the transformer (assumed evenly divided between poles, t.e,, sunber per pole is the sane). F = load coincidence factor for a large group of sintlar customers,ese Teansronwen- SeconouRY Econouies, (conta) kva = undiversified Load po" customer under of pole loads on secondary one-vay from the transformer 5 = nusber of spans of secondary one-vay fron crane former p= yearly investment costs that vary directly with ren of the conductor in dollars per Men per Mfc, See., dnevenental costs C, = yearly incremental cost of losses at the trans Former in dollars per Mft of conductors per Hen of conductor area per kva of diversified Load for a large group of similar customers, This varies with voltage and phase of secondary, i.¢., Whether single-phase or three-phase Lf the secondary spans are continuous from one secondary to another then p = = = ¥ and the above equation simplifies to: 5 ot met ® a = NE kv 1 The annual cost of losses should include che demand and energy components on the generating, transmission, and distribution ays- eens up £0 and including the distribution transforner, The load in the first span of secondary at the tine of the peak load of a large group of siniler customers is NF kva, The quantity (p + 4 the retio of the average lost per span of secondary to the loss in the first span for continuous secondaries. Tt takes {nto account the different loads and Losses in several spans serving siniler customers. Econoaical Conductor Size for Groving Loads ~ Two-Way Radial Secondary linen the load is growing, the economical conductor size is de- termined by finding the present worth of che changing yecrly losses over the various periods of tine vhere the cate of grovth or Length of second- ary {2 different. From this precent worth, che equivalent unifor. or levelized Loss cost is deteratned over the total years considered. The length of secondary and rate of change in load are assuned to be constant in each period. IE the annual rate of Load grouth is g, che load at the end of the first period m, will be (1 + )" cimes the present or initial toad, ‘The losses m years’ from now will be (1 + g)'™ tines the present or initial isn © wslosses. Tf che Late of retucn {oost of money) is x, the present value e286 Bi Thansronwen- of the tosses years from now ts PEO in teens of the cost Heeonoanr avo fconenies of present losses assuming the unit cost of Losses fx constant. Te (CHNT"D) present worth of the integrated losses to the beginning of period m 1s aiven by the factor & Gene ay G+ o™ ate or where fg = anal rate of grovth, expressed as a decinal = annual cost of money, expressed ar @ decinal m= number of years in the period _ Ht should be noted that the equation for B, gives the present worth in tems of the cost of Losses in the First year in the period. The load in the First year {s unity, and the load in the mth year ss aeem The factor B, expresses the present worth of the losses in the first period of m years, If the second period has n number of years, the factor 8, is found similarly to 8,. The rate of growth can be ditter~ fent in ehis period. The factor B, expresses the present vorth at the beginning of period n in tems of the initial losses at the beginning of the period, The loss for period n can be brovght to the beginning of period m by the factor 5, The factor B, expresses the present vorth at the beginning of the first period of the Losses at the beginning of the second period. The equivalent untfor or levelized cost of losses over the period a + n is found by multiplying ite present worth at the beginning of the period by the capital recovery factor. The capital repovery factor for the period ras ye? aen™ a Ae © 10e206 PANsroRwen- SECONDARY Ceonouies (cont9) ctor spreads the present vortit of the The capitel recovery cast of losses over a pariod of w + m-years. Putting these various factors together, the general equation for the economical conductor size for # growing Load for the evo periods & a= Fava, | 2a (8 0, +B, 8, 2) @ 1 eva, 4s Es undiversifiod peol Load per customer at the beginning of the fst period. AIL of the factors have been previously defined except D which might be called the cost-Lose equalization factor which for # tvoovsy radial secondary is: Transformer - Secondary Voltage brop - Tvo-vay Radial Secondary he percent voltage d:op in transforner-secondary 15 ex- pressed by: Tr, kva veE b kva Pvp gi (econ 8 + x sin 6) 2) where Vw percent voltage drop at tine of peak load on the secondary ¥ . qumber of customers per pole P va = undiversified peak load per customer F,, = load coinetdence factor for N custoners F, = load coinetdence factor for T custoners 4 te ane fora euoay secondary = number of . 7 Y customers served from the transformer pole-load-spans one-usy"from transformer VU, = percent voltage drop on one kva base per span DE secondary of lengeh £ feet at power factor cor 8 = percent transforner resistance fis © 10> wsdg = percent transformer resctance eave ‘ * Thansronne © = poner factor angle of toad seconbany Econonies KVA « transformer eating in kva e (conta) ‘The coincidence factor F, for x custoners is aseuiied to be OD In applying equation (2) to » specific situation, calculations should be made for @ munber of different lengths of secondary in order to determine the most econoaical transforner-secondery cosbination, The first ‘approxination for che numer of jears in the first period depends upon the rate of load grosth and the Limitation of transformer loading. The initial period, m, 1s approximated by equating che per vnit load in the mth year, (2+ a1, co the ratio of maxisum transformer loading to initial trans former loading. Voltage drop at the end of the first period may be the Huiting factor in che size of conductor chore: For each initial length of secondary assuned, it is suggested that che smallest transformer be chosen that will carry the groving los for more than six years, The secondary should be eut when the trans= former load reaches its load Limit, The economic size conductor + not changed appreciably by carrying out the calculation past 25 years. During the second period the trensformer size can be doubled when required by Losding conditions. Where voltage drop at the end of the first period is @ Limieing Factor in the size of conductor chosen, alternative celeulations sre usually necessary to find the most economical trans former-secondary con bination, i.e., (a) using © larger conductor which will meet the voltage drop Limitation for the sane growth in the first peried, ox (+) shorten- fing the length of the period so chat the voltage drop will not be exces sive WIth che size of conductor determined from equation (2), Recaleu- of a change ation to determine conductor size by equation (2), becav: in periods, {s usually unnecessary. Table MBO? has been developed from the equations in this Section. Desiga Toad of fixed value for each class of custoner was used. ism © vee287 SHUNT carAciTOR econowics The statte capacitor Ls unique in that its opplication may zot always be regarded as essential, but can be based on its favorable eco- nomics, It is also unique in that the cost per kvar of primary distribu- Eon capacitors has deeveased fo approximately one-fifth of the cost three decades’ age, and also, has deon improved in quality. Many aystens have fot yet taken complete advantage of capacitor possibilicies. In addition to other benefits, several companies reyard it es an essentially functfonal device By depending upon it asa basic clement in effecting voltage con- trol. Ong large systen that covers 10,000 square niles uses no other volt age regulating equipment but capacitors. In 1963 chey had a Little over $3 million invested in espacitora. They veport chat if regulators had been used, the investment would have been nore than $6 million, The present ryston is sperating at 90 percent power factor on peak; this Would indicate that furtner inprovenents could be sade with switched Capacitors, The corresponding power factor with no capacitors would have been about 80 percent. For this condition, the traasmiesion and distri potion systen could eaery about 12 percent less lose. This amount of {n- creased aysten capacity can be valved ac about $42 million. There are a nusber of economic benefits of capacitors applied to°distribution primary feeders which accrue from the point of applica Elon co the generating station, These benefits include: 1 = Reduction in kve capacity requirements 2 = aedvetion in IR demand and energy losses 3 = Reduction in 1°x losses 4 = Reduction in voltage regulation requirenents. Equation (6) of £926 and the curve of this equation as plotted in 1935 presents che sost economical poser factor based on using all of the released capacity made available by the installation of capacitors, Te is readily apparent from these data that with present low cost of capacitors (from $4.50 to S11,00 depending upon size of bank) very nearly tunity power factor can be jusiified economically on a released capacity basis. With a given peak load and peak load power factor, the kvar of capacitors whieh should be added to bring the peak load pouer factor up to the optiaun can be easily determined. See equations Ta and 7b of E926 and curves as ploteed in M936, Sige the load on a feeder is dis- tributed, and since dt ie not constant but varles with time, it is neces aaty to space capacitors judiciously along the feeder and have a proper Combination of fixed and suitehed capacitors to develop the saxinua benefits of capacitors, Sections 10, 11, and 12 of E926 contain data on Tose csleulation and capacitor location where one or sore banks are to bbe located on a feeder. : 1 has been stutud that capacitors will reduce voltage regulat~ ing requirenents. The following exanple illustrates how the entire Voltage regulation requirements of a L2-ky distribution circuit may be folfilled by eapacieors. The circuit shown in M6220 is used in the ex- ample, except that the condvctor size between points 4 and 3 are con fidered co be of 1/0 copper instead of No, 6. Data and results are given below in tabular form: haw © 16 wSubstation Daca trate farmers Digertbation Circuits Les = 2-15 VA OA/FASEA 6 etzewits of 6,000 kus 36,000 kva at v8 pe. RaItx= 10Z capacity Capacitor Installations Location Potne Point & ene SEF ceva 1,200 1,200 1,800 Diser, ‘Trans Subsea former Trans- ‘and forme: Primary Secondary Service Total Peak Losd Voltage Drop Baa 35 5.8 8 18.2% Voltage Rise by Capacitors 8.4 3.6 12.0% Light Load £2 one-third of full load, therefore regulation of distribution systen between full Toad and light load is 12%. Svitched capacitors cause negative regulation of 12%. Distribution circuit losses without capacitors 63.7 kor Distribution circuit losses with capacitors 51.8 kw Savings 11.9 lew (2) Gost With Capacitors Installed for Maxinun Regulation Cost of 4,200 kva of capacitors for regulating purposes $19, 700 Reduction in primary circuit capitalized loss costs 3,100 et Cost $16, 600 (2) Cost With Capscktors Installed for Maximun Lost Neduction ost per circuit of tapechanging on sbatatich transformers $12,600 ost of 3,600 lve of capacitors installed for maximum Lous Seduction 17,800 Reduction in primary circuit capitalized loss costs 5,000 Net ose $24,900 savings per viscate by vaing capacitors for regulation $ 8,200 E8180 Ove eur SHUNT earaciron Econowics (cont*0)Item (2) of the summary of costs 1s the cost of a capacitor in e247 SHUNT stailation that could be installed for maximum reduction of circuit losses ChraciroR With ehis installation voltage regulation of plus or minus 10 percent is In either capacitor EcoROWIcS supplied by @ cap-changing-under-Load transformer. inetallation there cil be savings in substation transformer and trans (cont?) niseion eysten T¢R and °K losses, in addicion to the savings indicated @ v8201 202 ‘M2030 through 203 ‘M200 210 12208, w2208 ‘M220¢ meat woes mane AAR AND TABLES Flow chart of Carcying Charges Coapound Interest Formulae Interest Tables Dos Factors Exauple - Fixed Charge Rate - Calculation Considering Salvage Example = Eeonoale Comparison by Anaual Cost Mechod Continuation of 220i Continurtion of 42205 Sampie Comparison of Carrying Charges for Distribution Development Alternatives Asnimed Syeten Data for Example £226 Evaluation of Losses for exemple £224aenea SONMNBLKI VACOMPOUND INTEREST FORMULAE a5 Capital Recovery Factor 4s). i Present Worth of a seriou = GH" 4 he Sinking Fund Factor . aes ‘Sum-of-the-Years-Digits Depreciation Factor 2crF- 4) eaters Double Declining Balance Depreciation Factor (changing to straight-line at half-life) red wa. COMPOUND INTEREST FORMULAE, M202TEREST TABLE Single Payment 9709 Bees bt ieee reat rss racy 60s 15219 2% comPounp ae Gir M2030 EST FACTORS pest iso 5 21s “ooze 90 ose ‘01s 100 INTEREST TABLE, M2038,M2orn i 1% irs 6 8 xo a 3 4 50 38 © 6 85 %0 B INTEREST TABLE M2038 9335 5013 ena 3020 as 15568, 5762 3372 Teak 3208 5026 ase 0 Teast 408 387 3687 3568 Saas [Rb 2526 io 0300 car38 10638 o1s2 ose lost TEREST TABLE = 3-1/2% covrouin pwreaest racrons 108 an 460 vst 1364 1.73 Yas? 1.525 11380 2.089 2.t08 23 sn 2807 3 3 3 2 é 203 et oo 939 302 633 om 9.357 islere reels au dae si ist avs] Payrane sersoe 10. 1 re re 18 18. 18 1. 20 2 Eo 25. 26 7. n n 908 S00 ‘02 15 su 002 503 gat 307 096 e31 no 2 08 08 90 036 136 263 So0 00 56 3 518 for 18 037 279 fea 633 2.000 Sas 562 6.550 rns 3.082 10.366 wast 13.02 110 19336 20.971, ins 24.500 3638) 38!200 30.259 3469 3s.6er 1.313 231958 Praetys ss.911 sie 4.429 0.341 63.433 eer 24.550 103.782 1301398 160.947 3020367 paisel serene PEBASc un necovet 52680 35693 Entry 16767 10348 09157 96e 8268 736 06593, 06227 606? 05985 05660, 03545 05397 e524 ite 05000 04683 seas, 00263, eit 24009 03919 b38te 37a? 03659 103666 03639 O3ei6 100000 23725 ieee 13267 ase Nees 0384s 882 107609 ‘6208 03657 eso 4082 03988 03596 e328 03099, ‘2992 02557 o2aat 22a ‘aie 2005 91907 01827 17a ‘anes? 21576 01500 ‘ones Toots coor “0346 ‘oe28? 9238 00199 00166 Toots re % is 16 3 ry ot as 30 53 6 %0 38 a5 38Mzoac INTEREST TABLE. & COMPOUND INTEREST FACTORS Equal Payment Sacien Single Payment co es cen ey — 29.778 20 tae 2 36.618 B BE i 56.085, cores 30 237.991 00420 60 a an 8 448.631 ‘00223 5 ra37.624 ‘00081 100, ° INTEREST TABLE Mz03CM2osD 6 0 o 2 2 x 2 B 30 a1 2 3 3B 3 so 33 & os 30 30 3 100 INTEREST TABLE 203d —Sinste tavoene 9508 Sis? 8763 Base 025 7429 Ta ora e945 an 1302 aaa 1486 1389 1.623 Vase 2208 2.520 es dae ater Biase 340 35a ams S080 eae eer 5.816 238 2033 136 1027 17.381 nw se as 52.597 ear B1568 Present each 937 bse ose Sas 6586 7265 ra 8.329 ois 3483 19.223, 10.20 rate 13.405 13784 14.495 wee 1s.7 15.451 16.285 16.564 17.023, 1.402 182136 Bie poms joes 20.951 Baas Bs65 ness 21.798 21950 Sune 1.000 Ross 3 ne san en less 20.764 ang Bena Bolas 2si0ee aa 5603 21.689 oeses ans sont 33.593, Sra soo? 4.752 3.606 12.756 aber 107.020 138.850, 178.503, nye 25498 366.238, Salo as. $56 siaceae 145.269, Usaceae 1790°856 Eis om eerie ae capital 53400 Saar? San 29 tome 16570 rt st cba 1096 37a? -03g02 oss asa ors 27608 rasa 08899 Tosa, 6472 96352 osacl osi8 6044 23956 03136 03727 05894 05220, “es060 4939 0184s ov773 ‘ue? a7 ‘609 o4se7 raus0 trey 2.20000 02960 2278s 02399 brass 01652 ‘anni isis o1ese olan 81298 0227 00994 90360 0438 OMS, 00273 00n1? 00172 00103 00087 20070 20058M203E gual Payment Series ‘Amount ‘Worth ‘Amount Recovery Fund rise ans Sigs ont Shar hie Saat a30 deze) 33201 ser 02 “gree 22 hot bite Pad Tass ine He te ts ins tdsse rst ie eee Kaas 10648 ‘5086 2 St ‘a9 ones 2 23.657 “omar out i Bee shee Bia ate ‘Bosss nes So ‘noes Saas yang o1sse ‘oi249 oie Bae ‘ones ines ‘boars Ba 2036 5 00219 ey ides adas.oer “20080 fone worse fasseso7 ooes ae Ske cotta 3043 ise ie dehosads INTEREST TABLE M203E OwnM203F INTEREST TABLE - 51/42 conpouwp wwoeRest FACTORS Single Payment tounl Posmest Gexieg 2 seen heat och doosae sscousey Pond 1 501 1.033 330 1.000 1.08250 1.09000 2 5027 Ties a5 2033 sist aa 3 e397 Yee Pa 3.0 38899) siee3 a bus tne 5.835 oe 30365 255 5 773 as 2300 5.553 2323? too? 6 2356 1.359 5.035 604s 19880 14610 7 “ases Lost Bie Soe 17439 ais ‘ Teta 1506 6508 31695 13829 10379 5 e310 13a 709 antat Maze 08976 10 5995, Yess re 1226 10s ores n 5696 1.756 5.198 14.386 ner 06947 a 2 sei Yees sno isles ra 96192 2 a Sua 194s 32s i997 oHoe 03556 b % ee, Pow Shae 13302 ariel Osos 1% res ea Bisa 10.206 21985 09798 usa 5 1s ea10 2.268 10.647 24.163 09392 onuaa 6 u ai0 2a 1066 ielatt 09036 37a y % 3981 2312 11465 23.758 08723 3473 18 5 3a Pie Hee 31508 Bea 03198 3 2 3594 2783 2.208 33.953, 08195 0294s 20 a 3s 2.929 134d 36.736 07972 02722 a R ae 5092 ass 38.8 loan imga 2 a Sear ae ie ae 07589 92198 3 x 2923 35 kes 38 Ore fale a a 2783 3398 in t3tdos ons 02028 25 2 2646 2.782 1.012 52.999, ons? +1887 26 n 3512 Sash 16.263, See o7oit eure p 2 2387 is 16.302 601769 05895 Lee as 2 er eto 10728 61953 98790 isso 28 3 215% er 10968 69.363 06692 Tanaae bo. a 2047 6.885 15.168 14,008 sso 01351 a 2 is Pat waa 8.880 6si8 i268 2 3 1808 Sie 15.528 dees, sao 01190 3 x fs 5636 15.700, 9.483 Os368 ons & 3 ees 5.995 13.890 95.138 osso1 otost 8 40 ns 703 16.587 128.420 029 0079 6 200 10/000 ites nies 03833 feos) 8 30 or wists, 11373 261959 23691 Take 50 35 0599 16.682 17°306 posse 03385 00338 33 o love Bsa ia. Sousa 05506 0256 0 os 39 27.825 510.954 costae 0196 6 0 O28 jean 605.475 05400 0150 %6 5 ‘eas oes e5.047 05358 ole 13 80 0167 seca4? 122.862 65359 ‘cess 80 8 [012s mis 14552706 [03319 20083 85 %0 ‘co 99.998 1885.668 05303 10008290 8 0007 129.132 20,384 0329 Togo 35 180 0060 166.806 5is8! 201 03282 0032100 INTEREST TABLE M203F fits OuSingle Payment ore ner dane 09 ctoae Bete 303 313 ater 2486 1902 1703 a 10396 INTEREST TABLE - 5-1/2% COMPOUND INTEREST FACTORS aaa Eausl Payment Series 869 toes © wr ree 209 26 iaat wer 13606 aha? gposare Beesnt Hreaaes aren 1s98 1338 to9ee 09963 095s oasis oaiae ora? Orbos 07319 rise 6792 ‘ero 26639 oes83 04232 26043 05695 03859 ossas soseee z03c INTEREST TABLE M2036203% 1.9456 1.038 2 lesea ie 3 Tease Vie bse 1250 $s lbser fers) $ laren 1a 6 lease 1364 5 ee 1ase wisn? 8 5406 1.850 Bsn 1338 1 leas Hose wasn Paty a S886, 2.387) te 13656 26 3 las? 2493 2 i268 5Si0sa 209 2.235 Blam at x MN 3.826 3 un tote % waa ane mato Pe ie ono ons 3 lia 51080 jo Si8e8 S381 a 87 5.658 Blur Soa 331580 rary Bluse ses 3s haat 10% 2 -1069 9.359 Sloane ir so cosit 16.369 5s ‘owez 268 Tos 3sex0 0768 37.066 3 ‘e200 50.076 3 ‘ots bo.226 Toe 87.585 8 Toaae 13.8) 30.0065 133.191 33 “ons 202598 100 ‘e037 ner 940 rerpetutey INTEREST TABLE M2034 Equal taymunt Seriee 3436 USe8 Heese Ferrel 610963 7.9887 5000 2630 3.acoe Sans 10.2817 16683 Mosse 12.0155 1213078 1218056 3.3265 insas 13.7565 13st 119 3178 Wes 14.9337 15.530 139882 16.5899, 16.7839 16.9320 170400 ier vam 1753055 173266 rae 16.626 18.562 20.650, ise 25.151 ass jolts. Sealy 3812 aant0s 49.165, saan 70.605, 15.46 e1.o1s Belen 98.585, 105.677 143.369 sriesa 60.523 eat.nno 653.488, ae ee 2646808 506-057 4602.05, capital 154353 srs Shere 20177 nasi prt) cb 0383 239776 losin 103063 ogres ‘ease fos 07785 07638 D707 106988 0630 08629 08760 06438 106255 oeiae 105958 05806 05869 05838 ostas 0578 os772 08730 1.00000 waar "12008 ‘sos 03976 lone 03013 o3038 ‘oar32 2573 102395 n 35 % 2 B » % as “0 5s o 6s 0 38 %0 8s 100M2031 INTEREST TABLE - 6 COMPOUND INTEREST FACTORS Single Payment Soe Pereen oig wort ‘Amount Were ‘Smo = Reconety Fund i. sve Tee ra 2060 sess dase : ase hist 2a Stee Sait stant 91 Tae aes ae 2nas9 : 13 38 ae sar tina i 7050 Lag sor 97s 1336 ‘ 3519 ese Shea 1431 19708 : Boe 1931 360 133181 or? « 5268 287 1.972 0669 u ‘a0 S36 retry esse @ ass tesa rd 5 3.293 als oars u aR Bsi2r6 129 iH to.106 25.6 03695 “ toa 22k “asee i toa 50.506 338 u tise 335960 ‘zea 5 ie 36.788 mete x 1764 se.993 102500 a iow B39 ‘305 2 200 ane Oeia8 3 isso sasie ik 13.003 59.156 26 Ban e308 H 1306 seae a Biss seo 8 Bis 1.038 38 so.es0 2 iiss = 2st 8 dnoisse fo 3 % jar gse 8 300.80 3 isa ieee ee 189.465 ® Sades Se5ai388 wee [esis © INTEREST TABLE ‘Mz031M203r a 19 % i a BS au 38 “s 6 nm 5 2 8 0 35 100 INTOREST TABLE Mg = 621/48 coupowvD INTEREST FACTORS Siaste tasnont 9412 27385 e302 eis 2028 Tet 2035 2287 2068 teat 1622 08a 10336 o263 0196 0098 038 0083 Peepetuity 1.063 15 1323 Ver ine 08 283 31803 ae hse 20552 4.637 sua 6.959 3394 1856 er n1.302 13.308 37°96 51.49 o3's67 se bulis9 aan INTEREST TABLE M203 faust toment Sertes __ Stokeng Saas as 6.9789 ssa ohne 9.5555, 9.936 012916 10.6272 12,2656 12.ha52 12.6920 Tees 13.067 13.6360 13.3693 14.0831 14.5843 1953 15.6890 15.7703 ead 13.3627 16,0000, soon 2063 ast S66 238 oie 2924 Beles isa 1730 se.e33 Hele is.sce false 53.334 07.192 10981668, 1493" 981/ srai.352 654508 Our capteat renown 1.06250 Tsu73s Chgee ta03s 20096 e763 11482 has26 006s 0066 ‘08133 “osu03 07879 ferro 1a7299, la7238 ‘oniee Orit 06057 osse 6378 05341 08307 "6285, 06250, 02238 059 201629 ‘ons02 onoas ‘0978 00912 085 00607 oo? 00126 ‘e028 ce36 ‘00008 uM2031 INTEREST TABLE = 621/04 COMPOUND INTEREST FAGTORS Single Payment Equi! Payment Seriee Werth ‘amount ‘worth ‘Amount Recovery ioe oes ses2e Siva Sis tar 25190 S88 “Heal i: oe 8 8 oes Bass 8 oe 7 7 i ee : 4 475.360 38 a Sus : 8 eae : INTEREST TABLE wate &M2034, IWEREST TABLE Uk = 63/42 cevpousy uiTeREst Equal taynent Series Fresene Compound Fresene Compound ‘capitel Sinking 2 lot Hooune it agua rssover une 1 938 1.067 2368 1.009 1.06750 1.00009 2 lens reo ves Hose T3stis css 3 leno rae 26363, s.207 Shes puis 4 That 3rdoea eae Sa335e 22008 5 TaN ans en Team oe 6.68 4.6036 7.108 70818 088 flea suadee ose “eset These B ‘580 6.256 elise Tests, osa3s 5 13555 e!ssst ase Tsiae 08436 10 {S208 T1055 16st Ton 7% no aers 5023 15.57% 13179 06420 ase Souse tree 324 s6n3 Bo be Bara 1.817 nine ogous Leo? sozet 22.155 pertteg Tousie 1s 934 33538 24650 ‘esor Toes ae .3si7 9.6031, 27.94 sto41 36st 13294 eed solace ooo o33i6 re ‘3036 10.2432 358s ‘os7e3 3012 13 aes 1013322 see ost roars 20 i068 1018030 38183 fos257 02509 2 asa 11.0867 43.856 09084 02234 ho ch 1293 is ‘asst ‘ozio 2 Tas 1516s sist “e683 iss) 2208s 117255 Sei229 oss26 O18 23 9s 1113208 stone ‘asses fo1ass 26.1830 1.1038 66.169 08262 soisiz ine 121s 3608 asics 013% be “1606 1238 ae soa D131 a “isoe 121582 erty ‘orses 1195 3o iho 127 50.317 785) ‘ona? am r2.sssz sana om 01027 Ro lpr 1315826 100.588 Torre e035? Bliss 11.0867 1s.os ores “088s je has 12002 121.708 farsi ‘eas22 3s 17 13.500 101823 longi Teares 4.07 13.7288 7.213 07288 00534 as Tosa ios rea oan so loaee was mra.ae e026 5s “ots Per Pens ool 6 loibe 1415206 piles e013? 6.0143 9.509 16.602 1019.34 00098 3 ‘e103 sour ile teaage ‘eao70 33 ‘oars neo Were 1972585 ‘cost loose 185.965, llse 300219 T0006 es. 10038 251.792 wipers Mousa 0002s, 50-0028 357.63- 1.779 579.451 00018 95 e020 4351382 terug 9202325 ‘a0oke 100 ‘oon 06.736 Wren 10159018 “e0ot0 Pocpecuity 4.0148 00000 we INTEREST TABLE Moab £Bh 6% OuM2030 41/28; comPouND INTEREST FacTORS ; 3 ee war foxes t2a08 4 8305 ‘09809 ao pee ae = ERR E ee z INTEREST TABLE M2030 © wnM203P TEREST TABLE = 7-9/4 CONFOUND LeTEREST “ABLES Single paynene equal Payment series Frovene Compound Present Compound capissl Sinking rec sone vooeeh ‘Anoune necovery “Bund 2 1 eae 1078 0.528 1000 1.07750 1.09090 L 2 ‘seis rier 19 Hove 3308s arti 2 3 Shea U2 2599 Sas Sez 30878 3 & thats ae San ota 3002 man i 5 “ones 1432 eons sia? lege i 3 é Tose 1505 ese 3390 cas Tne é a. Tssi0 reas saat ass Tse 1283 ; a 3508 nan 3thoa ast lies 0348 a 5 ‘sto8 1958 ea 12.358 13802 08032 5 at 2103 6788 1o3ie 1ar3s ‘6965 0 Me Ledoo 22 1 ecies a ‘ous a 12 “hoes 23 reas Ieee "hose 05348 a lee 2439 aloe 2 mags. 04928 5 mw 13517 2803 8.365, 23.786 lisse Tou2oe ie ee Soe 8.692 26630 S130 ‘oars 15 1 “3029 3300 81395 23.683 ints ‘oane8 6 St laait 3337 596 Sass to7et lo3oat 0 is Las08 3.033 or 36532 Thode loans 18 3 lho ahho 3099 eor38e 10236 nadie i nthe a0 10-doe aeiste 09996 “gets 20 no lioes Party to-2i2 ts.3e6 ‘osr92 oho 2 Ro line Sii66 10.406 53.959, 9610 1660 2 2 ase S367 10.585 Seas fom? e169? 2 ase oa 10.307 yo-430 08189 Olas & ie das 636i 11.080 yel9s os0%9) ‘on239 2% mls 7304 its e317 05942 D1i9? » a lus sous. 11307 siazo ‘ose ‘oro 2% ites ena tka 93.505 ‘a87ss tos b fo “hos 5.39 139 108.217 ‘aaa “ooaae 2 31 loses ort 11.627 117400 08600 00850 an 32 losis 10.688 rere iin ea333 ‘oa7e3 EA 3 ina teoe erate ‘oeut ‘eazat % x 12.653 be 150.359 Tosa 066s x as 1633, 3s? 163.012 [08363 oos3 3 2 e01 12.282 22.596 laste ‘aoa oO lous 2336 12.238 hen.97 oat ‘oat a lass nise8 Boe dena aio “00352 a 3 lauoe um 282 Sosa “oe076 00326 Pi ee Toaes 26.681, 11k20 Sass ‘osose ‘0302 a ts lone 38.958 1255 dates ‘8029 ‘0273 3 so loa aoe 12:39 526.054 cor%0 001s, so 3s Lotes 667 12491 349.093, loraso "e030 55 6 fous 12087 1124:030, o7a39 avces 0 3 ooze Wien? 638.399 ‘Sorat o0et 6s fo “ose iss Basia ‘ors ane %0 73 ‘ou3r 263.958 12.855 bron or ‘eea22 rs 0 L002 Ss2.087 12.870, $046,282 Lome 00020 a looie Sea.aer 3a35:060, larres ‘0014 a 90 looi2 327.084 10658:283 107759 ‘90009 30 95 locos w20t.272 13487.985 anise 00006 3s 1000008 14029 wise 224990723 on7se ‘0000. 100, Perpeeutey 12.503 07750 00000 INTEREST TABLE Mz03P: ouM2030 12%, COMPOUND INTEREST FACTORS a be 8 : 2 SR Ee 25 640, or978 ‘os971 colar 38 cous? 698.543 “o7643 (00143 7 oe 0021 467.433, 13.305 6219. 108, 107516 00016 INTEREST TABLE M2030M203P 5 “bees 6 is 3, 13830 e308 5 “Sioa aan “eto 13 ane 1s R68 1 “3028 lant te “608 Ber 2 laa Tides 22836 mine 2 lis lin 2 ites oes at ose je laste Boas 3 lan80 33 ons 210405 a Tbues 3 Towa 50 loa39 5s “ones 6 lous 6 laa7e mm To03e 33 ‘e037 8s looue 9 Toole 33 leao ean 1.078 2a ais ree ni9e9 am dees 38.959 ine eoleer ae 165.870, 269.958, Soa.oer 201.272 Te 8 INTEREST TABLE M203P, TEREST TADLE = 7-42 convo ienenear ste 1988 238s La 85565 8.682 81395 11b08 1160) 11359 12.362 12.230 1255, 12394 1268 sr taikoe 12.855, 28a eas 12.903, ual Ramment sorion 3239 se rau 2855 iolse 12.358 1e3ie 18.598 32.995 361352 aoc38e aaiste aase4 5759 sega woitse 3.017 39.505 108.219 inreoe 130.359, 161012 22596 302538) wan 1124:030, 638.379 Basiazl 7335.08 10459283 13487.385 224990723 pscovery, 1.07750 sous fins 1802 14035 13838 "13038 ri) 09992 03610 ‘o3ue? 09163 [09009 Tons 08600 08363, Osis? ‘gi3t “sia? 98076 nose [08029 lao Tanaso. ‘oreit ‘ons ore loo lan756 onse 07750 rune arity ‘aa7s ‘300 03955 rode ‘ones 01299, nis? Ima “aig0s oags0 ‘ores ‘oorat 00K ‘oose2 ‘ots 00130 8s “eo06i ovo 90009 00000M2030 Single Payment gun) Payment Series hus 26 Lage .ggoo0 0a 1 3 tone a eae Sietoy S240} 3 : Sass Se oan asst a : : Soo ase "Heeoe 8008 : ab Hho tvs 8 hla tase con sans 8 2 2 oe is 32 Hise Teas 3683 5 2919 yous ir oazve 6 oe 33.750 10963 saan a a a He ‘tetra 8 i ae Ba ted) & 2 Be 10188 ‘sates 2 5 fee aa 3 S306 ones a 3B u 94 ons) % 2 seer 35.339 B a on wen 8 tease asses u 12.676 B aime Lis 259.057 “ etd ute SRLS 8 whet Ho aBKID i 471.955 2474 5886.935 0 Ee Int a s ioe tase 3 INTEREST TABLE Mz030M203R DEREST TABLE = @s1/t coumooun tsTEREST racroRS Single tayaon 2 208 2.392 21389 2803 Slo Bidet 3.355 asta ee 5.286 5.720 rat e103 3386 3.20 3383 10°85, ies eat W810 16r032 23.630 seat 32650 172.307 darsoe 90 ‘008 154.618 35 00s 1564880 100000 mses INTEREST TABLE M203R sHonth 92 siise 51693 6ie2 7.053, wads 1796 ary a0 a72 bal 5433 338 9.827 totes 1:33 Toast 10.578 10.698 iocbo 10:905, 10.987 1.083 1235 117303, 1 es 19 ast L366 ney 22.031 1089 aw Bs 1000 208s 12.69, 19.261 30.970 a2 500 aos sL.921 e235 e127 331650 93.086 30.961 Saicee 108648 nese 129.297 167.391 162/201 aoins 226.056 Sosa 1357.88) 089.727 tee 436 270.890, 13195. 368 22592.489 53se0 668 capteat Recovery 1.09250 e269 38598 19372 e175 13442 11409 ne isest T0395 1017s 03839 9697 03569 094s 25350 03256 09170 09083, 103023 aa9s9 ‘ag90 oatto 0935 822 oszse 8282 e292 08255 860 08257 rasass 08253 Sioking 2.00000 f309 son za teset 0937 07325 03192 01056 o3si2 03229 02898 last les 01926 elias oa? o1918 01206 21100 1008 00920 20843 00773 00708 08st 20397 20549 00362 tot60 e010? 00072 aoe 00032 022 903 0030 00004 | 00003 5 5 56 2 a 2 2% » 1 2 38 40 3 6 %0 8 90 33 100 UTEREST TAMLE = 6-1/2% corey pwrERgsT FACTORS Single Peysene sar aus 7328 mie 6650 seo 2799 a3 2341 298 2303, 22 156 103 1662 Iie 99 Hos 1018 0939 0865 0792 2733 24 0575 0383 e256 (0095 015 a0ie 0006 aoe 0093 ta 13be 1770 rg Rowe Bast 26.133 pels 133,595 632.935 1026638 1544, 104 puller Sets 2534 4.556 sits Seas ens eset 6.969 7345 Dest 010 8.300 8.575 es 91053 eae 9.648 oisia io.ees 10°60, 10.78 10.827 10°50 10°35 11050 11088 nas ude 11677 ws ihr rare) nas 1760 M6 {iis Own Equal Paynene Sesion aecausty 262 S31 175 1e3s 17.096, 13.549 2a 25.098 wn 21.692 Saat 3e303 eas 53.469 fs.55, 113.562 124,235 138.773 18.1 132.102 iSors30 683.368 1933.77 1539°920, 2351.508 bsai.e8 Boat 358 40221959 120691400 1eiss.160 2.08500 Seuss 30323 3377 17733 16342 1324h 149 nas oo? tee 1002 sni66 133 Nae e790 osm 09382 99305 09297 O91 99066 29019 ste 08597 8566 08543 08528 coasts ‘nasi 8808 08502 und 1.00000 hase ter 03233, ena 0589 oss 4502 03988 03882 onist 24a 2258) 22290 out 08st 80 00737 ‘a7 20566 20519 00338 ‘oie 20097 “ecass 00083 0028 coi ‘0012 0008 ‘0002 INTEREST 203s Bb 5 v 8 3 2 2 %e a x Ess so 35 & 1s 0 83 50 2 100 TABLE M203520st news TABLE = 8.3/6 cowreusn iwrenest FacroRs Equal Payment series Single Payment Froswoe— Canpound capital Sinking peers pssousey fs 8 : 00908750 100000 L 2 2038 S665 “7904 2 3 Samo 39330 30580 5 i aSss6 30698 2868 é 5 51985 23509 ioe 5 © 2.476 cae 13376 ‘ 5 310 tn 110953 > a 10.535, Theo 09150 a 4 12.485 Tesi ont 5 0 15.013 sat 46s i n 17.326 14522 03772 n a 19.803 [3790 “03040 2 a 22519 cit 143s 5 i 25.588 "12663 23913 a Ss 28.390, iis 03003 5 16 a2.310 cs 03095 16 0 sear arte lose a 8 201299 cat ones ie 1 aacens These loa rc} 2 inn To780 e200 Et a éorsat fost oie 2 2 67.252 ha23? ‘onus? 2 2» mnie 10038 one 2 5 bie ‘osers haa 2s % ue 8.834 10.138 99.765 09888 os 2 “i038 5.629 to:242 oe.818 pore D101 n ie “oss 0.472 e337 198.049 over onze B a ‘ose 13a 10.435, 118920, loose oo » io “beer 12 hae 10506 1301108 03519 00769 o un some 12.460 10.580 12.493 03452 00702 a 3 oes Tessar 10.68 135.961 lasso ooeat 3B 33 og2 151528 ion 170.808 fos336 oss b los i322 10.768 ae. sa6 09285 e053 x 3s ost 18.838 roce22 203.858 osaat ease 3s 4 ous 28.553, 1.099 316.035 09066 00316 “0 a3 loz 45.583 Hes a6.663 oa338 ‘oozes Pe “ost 6.292 1256 yas 138 ‘sess ois so 53 “0089 100.635, iis 1140967 cee 3s fo Te08s 153.395, 13st trates “e003 6 65-0043 233.293 11.380 654.761 00038 6s fo “oon 530.853 11396 “44095 “ao? ” 73 o0i8 3392753, i107 si37.173, “eao3s 35 foo 820.956 na, sani 387 ‘eooit 2 #30008 1248-785 Weis 14260:397 ‘e000? 35 50-0005 1999.476 niga 21696.873 00005 0 55 ‘ooo 2889.217 Uleas ——33008:200 003 35 100 “oon 390-6753 Meas $0213:405 ‘eoa02 100, INTEREST TABLE, M2037 {£8 Out .Mz03u INTEREST TABLE 98 TO 256 CAPITAL RECOVERY FACTORS 8 ee 18 208 wen 1.99000 1.10000 1.12099 1.43000 1.20000 1.25000 Seas sain sisie sess ute 39505 ‘tess ‘398 aan Stato 3 ose? San Sonn 3629 was ists ara ahaa 3308 SaaS 2220 24323 rewza oor 5 9869 Sint Babae aoe : e068 Soi30 Staas abo) 3 1683 iene sons? Bato 3 cisse2 ee i900 shee % 14655 “ageee 19107 apne u 13965 thee eas Bee 2 13361 15568 tent 23080 5 12803 “i808 11469 ieee 8 12406 1682 ioe see 3 12030 14939 16298 ae 6 190s Hose re dons ° usr ree 1919 “tonal i ih There ga ees 8 10953 1388 15916 aoe 2 “oust 12950 ssa70 “aozie 2 “o9n4 Tala 5230 2008 36 onese 1e3e 15086 “tools io 3002 2000000, 30000 8 INTEREST TABLE Mz030 OmMa0sv INTEREST TABLE INTEREST TABLE Mz03v + 9% 70 26% PRESENT WORTH FACTORS Interest Rate 15 2696 a6) e575 sn 33159 3269 249 thas teas [229 ery 2 2333 on a19 at ig38 185 nas tiee oss ‘689 Dest 0376 alg azei a‘Ciktiohis 10 stantane Line aT WAP Lire zu a cote Saisie easy GEIR BRET Sout Soke 1 DDB FACTORS M204‘The effects of salvage on fixed charges for plant having long service life are relatively small and can uevally be neglected. However, they may bo significant with plant having relatively short service Life, The procedure outlined beloy ia based on the Vata assumed for E218, except that: = estinated avetage Life of property = 5 years ent = (24369 »-20000-,07750 =2BB%,20000) AB pn4g9 “28689 4, = Flacd charge fate vithout salvage) = 28.65 . +O T yay Herre, Cot) + 1000 (e+ HPT say = 0.65 G90) «10 [lon + LotgH0 tt oxy « 001] 27.068 25.785 + 1.263 ue = 27,06 (pereent) HFC, , 9 * Fixed Charie Rate in percent considering salvage. exe FIXED CHARGE RATE ‘CALCULATION CONSIDERING SALVAGE 210 ou12204, A.Conpany is investigating the relative merits of installing one txonsformer per substation or tuo transformers per substations for each of tuo different areas having * different rate of grouth. Plan A for install- ing one large transforner initially at cost of $210,000 and: che alternative Plan B requiring a transformer having half the area design capacity initially at cost of $130,000 and 2 second transformer when required by load at cost of $120,000, In each area the first transforner in Plan B would carry 75 percent of its rated capacity the first year. One area (X) has a grouth rate requir- ing the addition of the second transformer in the sixth year. The second area (¥) requires installation of the second transformer in che tenth year. ‘The rate of return is 6 percent and Company approved fixed charge rate {s 12 percent. Schedules of anaual operating and aaintenance costs including Losses are as follows anza x anza cor secs Hana Pian 8 r F100 F400 #300 $2,400 [si ais 3,100 2430 2 m0 700 3,200 2,300 Se see 3,200 2,600 or 3,200 2,700 6 35500300 3,300 2,800 eo 3,300 2,00 8 4,000 4,600 3,400 3,000 a 3,500 3,200 4,705,400 3,600 4,300 4 3,700 4,400 2 3,800 4300 D 3,900 23600 1 4,000 4,700 6 4,100 4,200 | 44300 3,100 wv - 4,500) 5,200 1s 4,700 5,400 Se 0 4,700 5,400 EXAKOLE ECONOMIC COMPARISON BY ANNUAL COST Eis METHOD gual M2208n2208 AREA X PLAN 4 Pus 8 Investaont, 0-5 Years $130,000 9 Year 0.35 Years $210,000 $250,000 Operating and Maintenance Operating and Naincenance a Costs (including losses) Costs (including losses) Factor Aetual Present Worth Actual Peesent Worth 9434 § 3,100, § 7,920 $2,400 $2,260 +8900 3,100 2,760 += 2,500 2,220 5396 3,200 2,680 2,700 2,260 792. 3,300 2,620 2,900 2,300 1073 3,400 2,340 3,100 2,320 7050 3,500 2,460 4,300 3,030 6651 3,700 2,460 4,400 2,930 624 4,000 2,510 4,600 2,880 5919 4,200 2,8 4,900 2,900 10 3584 4,700, 2,630 3,400 3,020 7.3602 '§ 36,200 $26,060 $37,200 $26,120 11-38 73 117,300 33,500 135,000 38,900 1.09 $153,700, $59,560 $172,200 $65,020 59,860 65,020 Levelized ost costs 22:58 _ 5 4,120 oad $4,500 14.49 aay Fixed charge 12 (210,000) = 25,200 +12 (130,000) 15, 600 #10128 (.12} (120,000) 10,220 Pie carrying charges PLAN A - we PLAN oD Plan A is the econaate choice by $1,000 per year over a 35 year period. ‘t5un of present worth factors 6 to 35 years inclusive EXAMPLE ECONOMIC COMPARISON BY ‘ANNUAL COST METHOD Eh 2208 © temw year Factor 1 9436 2 +8900 3 8396 4 1921 5 mn 6 7050 7 6651 5 62% ° 5919 10 3584 a 5268 12 1970 13 4688 “ 4623 15 “4173 16 3936 v7 ang 18 3503 10.8279 19-35 3.6708 14.49 Levelized Os, Annual costs Levelized Fixed Coste =12 (210,990) carrying charges Plan B {s the economic * Sum of present worth factors 10 to 35 years inclusive: aaEAY PLAN A 0-35 years $210,000 Operating and Haintenance Coats (including losses) 2200 PLAN B Investment 0-9 Years $130,000 10.35 Years $250,000 Operating and Nelneenance Costs (including losses) Present tlorth Actual Present Worth etal $3,100 § 2,920 $2,400 $2,260 3,100 2,760 2,450 2,180 3,200 2,680 2,500 2,100 3,200 2,530 2,600 2,060 3,200 2,390 2,700 2,020 3,300 2,330 2,800 1,970 3,300 2,190 2,900 1,920 3,400 2,130 3,000 1,880. 3,500 2,070 3,200 1,890 3,600 2,010 4,300 2,400 3,700 1,950 4,400 2,320 3,800 1,890 4,500 2,240 3,900 1,830 4,600 2,160 4,000 1,770 4,700 2,080 4,100 1,710 4,800 2,000 4,300 1,690 5,100 2,000 4,500 1,670 5,200 1,930 4,700 1,650 5,400 1,890 $65,900, $38,170 § 67,550 $37,310 80,000 17,200 91,700 19, 800 $145,900 955,370 $139,250 $57,110 1,960 5 3,820 : +12 (130,000) . 15, 600 ~ 25,200 7.70 (.12) (120,000) = 7,650 Ta03 $29,020, $27,190 choice by $1,830 per year over a 35 year period. EXAWPLE Gitse © 0 ECONOMIC COMPARISON BY AMUAL COST HETHOD ‘M2200wea Semple Comparison of Costs for a é{stribution development project for expansion with (8) 115/23/4.8 ky step-down or (B) 115/23/8.3 kv step-down or (6) 118/23 kv step-down Comiiative carrying charges ond the cumulative peasent worths of the annual earry~ ing chargus are determined for each alternative and are as follows cumalative cumiative Present Worth of carrying Charges Annoal Coreying Charges smousands of betlaes Thousands of Dollars ee a oc 1 3 0B as 2 37108 B88 es uo 11154 as 109 132206 3 mt BL 218260 6 3620388 1 ss ee 32a 3607 3 Sly as 385 jon bas ze 9 3965s 3a as 1 82630742 ter 4a 530 no 88a sue 493585 2 6857 cor 552638 1188070 est aok 603 tae 021182 3 668 Tae 13 4031p 1322 822725 BOL ie te as tar 90s 7974 171833 16081596 386865905 182037140, 1740 1079947955 13 ze 2073 "1888 116710201004 2 268823542061 ies 121082 For the 20-year period Plan € is the econoate choice SAMPLE COMPARISON OF CARRYING CHARGES FOR DISTRIBUTION DEVELOPMENT Aufetartees f¥x00 ae © rsae we2a SYSTEH DATA ASSURED FOR Exa LOAD FACTORS AND Losses Load Z Losses in Elosent (ote 1) Factor Loss Energy Loss, Generator step-up 50 0.7 Transmission as 25 Substation 40 1a Prissry 38 n7 Transformer 36 22 Secondary au 6 Service (3) is oe INVESTMENTS AND ANNUAL COSTS PER KILOWATT OF CAPABILITY (Note 2) Investaent_($/iee system en Carrying charges (4) Peale Peak (S/he) Generation (fim capability) 170.09 170.00 24.00 ‘Transmission ée'00 43.90 6:00 Substation 30,00 22.00 3:10 Primary 43.00 27-00, 320 Traneforaer 40:00 26.00, 3.65 Secondary 25.00 14.00 195 Service and Meter (3) 30:00 4:00 0:55 Total 4400.00 otes: (1) The lose in various system elenents ie expressed as percent of the load (output). (2) The investment per kilouatt of capability at time of systen peak is the average investment. The investnent at tine of systea eleent peale takes into account peak Fesponsibility factor and also ratio of inereneatal to average Lavestaent of 0.9 for substation and transformer land 0.8 for other elenenes (except the service). Radial systens are assumed for the prinary and secondary systens (8) Values for service and meter shown aorely for totals as these values do not ordinarily enter into economics of Tosca in the utility eo-ten, (4) Includes fixed charges of 174 and an estimated value for operation and waincenance, but excludes inctesental pro- duction costs of genersei ASSUMED SYSTEM DATA Gite Fon ExAWLE E226 © 1983 coyraze EXAMPLE OF EVALUATION OF Losses |A = ANNUAL COST OF LOSSES WITIL_1 KW DEMAND AT THE DISTRIDUIION TRAXSFORNER Annual Multiplier core Peak. Copper Cost For Losses Loss Responsibility Loss, Giks) On uosses (Sku) Factor (shi Generation 24.00 1.100 0) 25.600. 5186 (2) 13,686 Transmission 6.00 1092 6.552 T6400 4193 Substation 3u10 1.047 3.246 e100 21629 Pelmacy 3ie0 slo 31933 8975 31530 Pouer Cost 40.131 24.028, Energy Cost (Below) 27.936 4.898 Total $/kye 68.067 28.936 Enorgy Cost: Incremental production cost assumed at 3 mille/kwt; oultiplied . by 1,063 for' losses on losses = 3.189 mills/kuh Loss factor = .176 for 1 percent load factor Equivalent hours = .176 x 8760 = 1539 Copper loss 1539 x .002189 = $4..898/kuye core loss 8760 houre per year = 6760 kwh/lew 8760 x .003189 ~ §27.936/kuye 1D - TOTAL LEVELTZED ANNUAL COST OF PONER LOSSES OF SO KVA TRANSFORMER 1563 kw x 28.936 213 kw x 68.067 $16.30 per year Copper Loss $14.50 per year core Loss ¢ ~ EVALUATION OF REACTIVE Loss Tavestnent in svitched capacitors assumed at §5 per kvar; annual costs assumed to be $0.70 per year. 1k loss = 0.710 kvar at transformer peak load peak responsibility factor .8975, 1k reactive Loss cost = $0.70 x 0.710 x .8975 = $0.45 per year Investnent in unsvitched capacitors assumed at §3 per kvary Annual Costs assumed co be $0.42 per year Exciting corrent loss = 0.75 iver Exciting current loss cost = $0.42 x 0.75 = $0.32 per year. Total loss cost - 16.30 + 14.50 + 0.45 + 0.32 = $31.57 per year Notes: (1) From M224A Pare A = 1,007 x 104.4 x 101.1 « 103.5 (2) (36.50) ratio of load factors equared « .5164 EVALUATION OF LOSSES FOR EXAMPLE 226 £250 2208 onePLANNING, O€S1ON cRITERIA economics STRUCTURAL CONSIDERATIONS IMPEDANCE. FAULT CURRENT CALCULATIONS VOLTAGE DROP AND REGULATION, LOSSES, CONDUCTOR SELECTION SMORT-CIRCUIT PROTECTION, LIGHTNING PROTECTION AADIAL PRIMARY, SYSTEMS TRANSFORMERS, CAPACITORS AND OTHER EQUIPHENT AKD DEVICES NEUTRAL SYSGEMS. AND GROUNOING ROLDRAY LigeTiNG UTILIZATION EQUIPHENT AND LOAD eHARACTERISTICS - t JOINT USE, INDUCTIVE COORDINATION, RADIO AND TW INTERFERENCE STANDARD SPECIFICATIONS, CODES, REGULATIONS section section section sestion section section seein section seerion section secrion SECTION seerion noe ‘PLANNING, DESIGN CRITERIA Econowics, STRUCTURAL CONSIDERATIONS IMPEDANCE, FAULT CURRENT CALCULATIONS VOLTAGE DROP ANO REGULATION, LOSSES, conDUCTOR SELECTION SMORT-CIRCUIT PROTECTION, LIGHTNING PROTECTION RADIAL PRIMARY, SYSTEMS TRANSFORMERS, CAPACITORS AND OTHER EQUIPNENT AND DEVICES NEUTRAL SYSTEMS AMD GROUNDING ROADWAY LIGHTING UTILIZATION EQUIPHERT AND LoAD CHARACTERISTICS JOINT USE, INDUCTIVE cooROINATION, RADEO 439 TW INTERFERENCE STANDARD SPECIFICATIONS, CODES, REGULATIONS section section section section section section section section section section section Section