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Cost-Effectiveness of Distributed Generation Technologies 3.2.3 Program Administrator Test The PA test attempts to determine how the utility’s revenue requirements are changed due to the utility administering the DG program. The PA Benefit-Cost Ratio is given by: ProgramAdministratorBenefit-CostRatio= ProgramAdiminstratorBenefits Pr ogramAd min istratorCosts Benefits PA benefits include electricity avoided cost savings and CHP gas avoided cost savings. Avoided generation costs, as valued by the E3 electric forecast. Avoided transmission and distribution costs, as valued by the E3 electric forecast. Reliability net benefits, as valued by the E3 electric forecast. Reduced line losses associated directly with reductions in power purchases by DG participants, as valued by the E3 electric forecast. Environmental benefits from reduced central plant electricity production, as valued by the E3 electric forecast. Waste heat benefits of CHP applications valued by the E3 gas forecast. The PA benefits associated with individual technologies (ProgramAdministratorBenefitsi) is given by: Pr ogramAd min istratorBenefitsi = AvoidedElectricCostsi + WasteHeatBenefitsi where AvoidedElectricCostsi represents the avoided electric costs associated with technology i and WasteHeatBenefitsi reflects the utilities gas costs associated with waste heat benefits from technology i. Avoided electric costs for each technology were developed on an annual basis for the assumed lifetime of the technology, then discounted back to present value. That is: AvoidedElectricCosts = T AvoidedElectricCostsit i t∑=0 (1+d)t Where t denotes the year in question, T is the lifetime of the technology, and d is the utility’s discount rate. For each technology, annual avoided electric costs were developed at the hourly Itron, Inc. 3-30 Critical Inputs and AssumptionsPDF Image | Cost-Effectiveness of Distributed Generation Technologies
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