Comments on fixed costs in industrial power plants

Certain features of the cost of power generation in small plants seem to be the subject of such varying ideas that it has been thought worth while to indicate a few of these features with the hope that a discussion of them may bring about a greater consistency of view among the members of the profession. The features presented in this paper will for the most part be confined to “fixed costs,” comprehending thereunder those costs which are not closely a function of the energy output. While the latter elements of cost are more or less obvious during plant operation, the fixed costs are capable of but little modification or correction after a plant has been installed, and being a matter of economic rather than of technical judgment, and hence not always attracting the attention of engineers who may not have specialized in economic essentials, it is at once desirable that attention be called to them, and that they be given considerable weight during plant layout. The writer would call particular attention to the marginal principal discussed in the latter part of this paper as being one of critical importance, and one of those least commonly weighed by the profession.