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Cost-Effectiveness of Distributed Generation Technologies The O&M component of the costs (which includes the technology specific maintenance costs, the fuel costs for gas fired DG, and the insurance costs) is given by: T O & MCostit O&MCosti =t∑=1 (1+d)t . Note that, for gas-fired DG applications, the yearly fuel cost component of O&M costs is given by: 12 FuelCostit = m∑= 1ThermsUseimt AvCostGasimt where ThermsUseimt is the monthly usage of natural gas for the DG application and AvCostGasmtis the monthly commodity avoided cost of gas.21 The environmental pollutions produced during the production of electricity using DG measures is technology-specific and a function of the quantity of electricity produced. The yearly environment cost associated with the production of electricity is given by: EnvCostit = MWHProdit GHGEmissioni EmissionCostt where MWHProdit is the yearly electricity production for the DG technology, GHGEmissioni is the pounds of GHG produced per MWh of electricity produced, and EmissionCostt is the yearly cost per pound of GHG produced. The yearly cost per pound is derived from the E3 gas avoided costs mid case scenario. 3.2.2 Participant Test The Participant test attempts to measure the change in the participant’s well-being from participating in the DG program. The test is commonly viewed as a conservative measure of the change in the participant’s well-being as it does not incorporate monetary values associated with intangibles such as the participant’s value of installing a “green” technology. The Participant test value can be used to assess the change in the participant’s well-being associated with program changes, such as changes in rebate values or rebate form. 21 For commercial customers the avoided cost of gas does not include the T&D or the environmental components. Commercial customers are assumed to be non-core gas customers and the utilities are not required to plan their distribution network for these customers. The environmental component of the avoided costs is not included because each technology creates a unique environmental signature that is incorporated in a separate component. Itron, Inc. 3-25 Critical Inputs and AssumptionsPDF Image | Cost-Effectiveness of Distributed Generation Technologies
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