One-Year Deferral Method for Estimating Avoided Transmission and Distribution Costs

This paper presents a new method for estimating avoided transmission and distribution costs associated with small load reductions, named the one-year deferral method. It is established on the basis of the system planner´s actual response to a small reduction in the forecast annual peak load. This paper has also explored the noninteger deferral time (i.e., a fraction of a year) in the present worth method, which is seemingly inconsistent with the system planning practice. In addition, as allowed by the new method, the effect of the size and type (shape) of a load reduction stream (i.e., a series of reductions in the forecast annual peak loads) on avoided costs is studied, which is important for determining generic avoided cost values intended for various applications.