Page 224 - Sustainable Cities and Communities Design Handbook

198 Sustainable Cities and Communities Design Handbook

Weaknesses of the Program Administrator Cost Test
By defining device costs exclusively in terms of costs incurred by the
administrator, the PAC Test results reflect only a portion of the full costs of the
resource.
The PAC Test shares two limitations noted previously for the TRC Test:
1. by treating revenue shifts as transfer payments, the rate impacts are not
captured
2. the test cannot be used to evaluate load building programs.

Formulas

The formulas for NPV, BCR, and levelized cost are as follows:
NPV pa ¼ B pa C pa

BCR pa ¼ B pa =C pa
LC pa ¼ LC pa =IMP
where
NPV pa ¼ NPV of PACs
BCR pa ¼ BCR of PACs
LC pa ¼ Levelized cost per unit of PAC of the resource
B pa ¼ Benefits of the program
C pa ¼ Costs of the program
LC pc ¼ Total PACs used for levelizing

N N
X X
UAC t UAC at
B pa ¼ þ
t 1 t 1
t¼1 ð1 þ dÞ tþ1 ð1 þ dÞ
N
X
PRC t þ INC t þ UIC t
C pa ¼
t 1
t¼1 ð1 þ dÞ
N
PRC t þ INC t
X
LCpc ¼
t 1
t¼1 ð1 þ dÞ
(All variables are defined in previous sections.)
The first summation in the B pa equation should be used for C&LM. For
fuel substitution programs, both the first and second summations should be
used.