4.2.1.3. Avoided Transmission and Distribution Costs

Avoided T&D costs reflect the deferred or reduced capacity investments in electric transmission and distribution systems that occur when demand response is available in local areas that would otherwise require such investment. The avoided T&D cost for each utility included in the Avoided Cost Calculator will reflect the average cost for T&D upgrades in the utility's service territory.

T&D capacity value is allocated to individual hours based on the hourly temperatures in each climate zone.  This approach results in an allocation of T&D value to several hundred of the hottest (and likely highest local load) hours of the year.  The originally proposed Demand Response Reporting Template used a weighted average of the hourly allocation of T&D value by climate zone to calculate a system-wide average T&D capacity value to each month in the Demand Response Reporting Template.  In response to the comments of several parties, IOU specific T&D capacity values will be used.  These values will also be reported separately for sub-transmission and for distribution.  As with the avoided generation capacity costs, the monthly T&D capacity values will be used with the monthly load impacts to calculate program benefits.

2012 T&D Avoided Cost Values

Under the 2010 Protocols, the utility or other entity performing the evaluation will then apply the calculated T&D costs to each program to the extent that that program may actually alleviate congestion in a particular area. Unless a specific rationale is provided for a given program, the avoided T&D of the program is assumed to be zero.

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