UNITED STATES DEPARTMENT OF AGRICULTURE

Rural Utilities Service 

BULLETIN 1724D-104 

RD-GD-2019-94

SUBJECT: An Engineering Economics Computer Workbook Procedure

TO: RUS Electric Borrowers and RUS Electric Staff 

EFFECTIVE DATE: Date of approval. 

OFFICE OF PRIMARY INTEREST: Engineering Standards Branch, Office of Customer 

Service and Technical Assistance 

FILING INSTRUCTIONS: This is a revised bulletin. This bulletin can be accessed via the 

Internet on the RUS website: 

https://www.rd.usda.gov/publications/regulations-guidelines/bulletins/electric

PURPOSE: This bulletin describes the Rural Utilities Service engineering economics computer 

application. This application offers users a planning tool for calculating the approximate “total 

owning” costs of planned construction projects. The application also compares annual costs of 

alternative construction projects. The bulletin explains the worksheets, formulas and results of 

this computer application. 

_____________________________________ __________________________ 

Assistant Administrator Date

Electric Program

Disclaimer: The contents of this guidance document does not have the force and effect of law and is not meant 

to bind the public in any way. This document is intended only to provide clarity to the public regarding 

existing requirements under the law or agency policies.
Bulletin 1724D-104

Page 2

TABLE OF CONTENTS

1 GENERAL DESCRIPTION................................................................................................2

2 USES FOR THE WORKBOOK ANALYSIS.....................................................................3

3 AVAILABILITY .................................................................................................................3

4 EXPLANATION OF WORKSHEET CALCULATIONS..................................................3

5 EXPLANATION OF RESULTS.........................................................................................9

6 SENSITIVITY ANALYSIS ................................................................................................9

Exhibits

Exhibit A—Worksheet “Read Me”

Exhibit B—Worksheet “FCR”

Exhibit C—Worksheet “Input”

Exhibit D—Worksheet “Plan 1” (First 9 of 30 Years)

Exhibit E—Worksheet “Plan 2” (First 9 of 30 Years)

Exhibit F—Worksheet “Compare”

ABBREVIATIONS

FCR Fixed Charge Rate, an economics term

kW Kilowatts (1,000 watts), an amount of electrical power demand

kWh Kilowatt-hours (1,000 watt-hours), an amount of electrical energy

LdF Load Factor

LsF Loss Factor

MWh Megawatt-hours (1,000,000 watt-hours), an amount of electrical energy

RUS Rural Utilities Service
Bulletin 1724D-104

Page 3

1. GENERAL DESCRIPTION

This guide bulletin describes a computerized engineering economics procedure developed 

by the Rural Utilities Service (RUS) which can be used by RUS borrowers and others. This 

application was developed on Microsoft Excel for Windows.1 This guide bulletin details 

how the RUS application can be used and explains the calculations made within its 

worksheets. The bulletin does not derive the engineering economics methodology used.

The application consists of a Microsoft Excel workbook file, named “ECONPLAN.XLS” 

which contains the following 6 worksheets:

• “READ ME” is a written page of instructions for entering data.

• “FCR” is a form used to calculate the blended interest rate and the fixed charge rate 

factors from data found in RUS Form 7, “Financial and Statistical Report.”

• “INPUT” is a form used to calculate the annual load and loss factors. This form is 

also used to enter load losses, power costs, alternative fixed charge rate factors, 

inflation rates and present worth rates, all used in the engineering economics analysis.

• “PLAN 1” is a form in which proposed construction descriptions, costs and expected 

changes in kW losses are entered by year. The costs of construction and losses are 

calculated and displayed.

• “PLAN 2” is a form identical to “PLAN 1.” “PLAN 2” is used to calculate and 

display the costs of an alternative construction plan with the same economic factors as 

used in “PLAN 1.”

• “COMPARE” is a worksheet which displays and compares, in tables and bar graphs, 

the accumulated costs of construction and losses of the alternative plans entered.

Examples of these worksheets with sample data are included in Exhibits A through F at the 

end of this bulletin.

a. Workbook. The workbook associated with this bulletin determines the theoretical 

present cash required to finance a portion of a construction program, per year, for a 

period of up to 30 years. The workbook does the following:

• Provides instructions and forms for entering data and information;

• Inflates estimated construction costs to the year of installation, determines the 

present worth value of the inflated costs, and multiplies the results by the fixed 

charge rate;

• Calculates future demand and energy losses and their future and present worth 

costs;

• Totals and accumulates the above two sets of costs for each year for 30 years;

• Displays all of the input data and calculated results; and

• Displays selected accumulated totals in tables and on bar graphs.

 1 Microsoft, Excel, and Windows are registered trademarks of the Microsoft Corporation.
Bulletin 1724D-104

Page 4

b. Evaluation Procedure. This evaluation procedure is widely used in the electric utility 

industry. RUS finds this methodology of engineering economic analysis acceptable 

for use by its borrowers in presenting construction project evaluations. Other 

methods are also acceptable to RUS.

c. Compatibility. Users should determine if this computer application is compatible for 

use on their own computer and printer.

2. USES FOR THE WORKBOOK ANALYSIS

This computer application was developed as a planning tool for engineers, managers, and 

accountants. It can be used to:

• Determine the approximate “total owning cost” of a planned construction project or a 

partial construction plan;

• Compare construction requirements and the annual costs of two or more feasible 

plans that will each resolve an electric service problem. The most economically 

beneficial plan can be easily identified;

• Document, for reference purposes, engineering and planning work that has been 

performed; and

• Display some of the details of a plan for presentation to others.

Worksheet Printouts. Worksheet printouts can also be used as documentation, and 

sometimes justification, for recommending a construction project. The 

application is especially useful when two alternative, feasible plans are under 

consideration. The printouts can be used for description and justification exhibits 

in Construction Work Plans and their amendments, Long-Range System Plans, 

and other studies. RUS generally prefers that only one or two such exhibits be 

included in such studies to serve as a sample of the economic analysis performed 

by the engineer for the entire study. However, for the more costly, complex, 

construction recommendations, the inclusion of additional exhibits is appropriate.

3. AVAILABILITY

A copy of the RUS Workbook program can be obtained by downloading a copy off of the 

RUS website at https://www.rd.usda.gov/publications/regulationsguidelines/bulletins/electric.

4. EXPLANATION OF WORKSHEET CALCULATIONS

The procedure and formulas used to calculate the displayed quantities on the worksheets 

in the workbook are explained below.

a. Worksheet “READ ME” Worksheet “READ ME” is a page of written instructions 

for entering data. No calculations are performed on this spreadsheet.
Bulletin 1724D-104

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b. Worksheet “FCR” Worksheet “FCR” is a form that can be used to calculate the 

blended interest rate of construction loans and the fixed charge rate (FCR) factors 

from data found on a borrower’s completed RUS Form 7. The formulas used to 

calculate the FCR factors and the FCR are shown on the worksheet. (See Exhibit B). 

These factors are required for subsequent calculations.

(1) The fixed charge rate is the sum of the following rates:

• Cost of capital (equals the cost of debt plus the cost of equity),

• Taxes,

• Depreciation,

• Operations, and

• Maintenance.

(2) The fixed charge rate, when multiplied by the cost of a new construction 

project, yields the annual “fixed charges.” Thus, the fixed charges are the 

annual interest expenses of the money borrowed to build, plus the annual 

costs to operate and maintain a new construction project.

c. Worksheet “INPUT” Worksheet “INPUT” is a form with instructions and cells for 

entering certain economic, load and cost factors. This worksheet may also be used 

to calculate the annual load factor (LdF) and loss factor (LsF). The formulas used 

for all of the calculations are shown on the worksheet. (See Exhibit C).

(1) The LdF is used to determine the average hourly demand over a one year 

period from a given annual peak kW demand. The LsF, which is based on 

the LdF and empirical data, correlates demand and energy losses. The LsF is 

used to calculate energy losses from the annual peak kW demand of losses.

(2) The user may enter alternative FCR or LsF factors if those calculated on 

Worksheet “FCR” are incomplete or unsatisfactory. Data has to be entered 

in all of the shaded cells so that the final calculated results are complete and 

meaningful.

d. Worksheet “PLAN 1” Worksheet “PLAN 1” is the form in which the user enters the 

descriptions and present estimated costs of proposed construction projects. The user 

also enters any anticipated changes in kW losses. All of the formulas used and the 

calculations performed on this worksheet are explained below, on a column by 

column basis, beginning at the left side of the worksheet.

(1) “CHANGES PEAK kW LOSSES” Column. A planned future construction 

project will usually decrease, but sometimes increase, a circuit’s kW demand 

and kWh energy losses. If a future change in kW losses is anticipated, then 

the user enters the amount of the estimated or calculated annual peak kW 

losses change in the space provided to the right of the item description. If a 

reduction in kW losses is expected, a negative kW amount should be entered.
Bulletin 1724D-104

Page 6

(2) “INFLATED COST” Column: The present year estimated cost entered 

for each construction item is inflated to the year of construction by the 

using the following formula:

Inflated Cost = Estimated Cost x (1 +Inflation Rate)(Yn–Yo)

where:

Yn = Year of Installation

Yo = Present (first) year of plan

The above estimated cost is entered by the user on Worksheet “PLAN 1.” 

The Inflation Rate is the “Annual Increases of the Cost of New 

Construction” entered on Worksheet “INPUT.” The Inflated Cost is 

displayed to the right of the present year estimated cost.

(3) “PRESENT WORTH” Column: The present worth of each of the Inflated 

Cost calculated above is determined by using the following formula:

Present Worth Cost = Inflated Cost 

(1 + Present Worth Rate)(Yn–Yo)

where:

Yn = Year of Installation

Yo = Present (first) year of plan

The Present Worth Rate (for the Cost of New Construction) is entered on 

Worksheet “INPUT.” The above Present Worth Costs are displayed to the 

right of the Inflated Cost of each construction item.

(4) “FIXED CHARGES” Column: Each of the above calculated Present 

Worth Costs are multiplied by the fixed charge rate which is calculated on 

Worksheet “FCR” or alternatively entered on Worksheet “INPUT.” This 

product, which is the present worth of the Fixed Charges for each 

construction item, is displayed to the right of each calculated Present 

Worth Cost.

The Fixed Charges for the construction items are totaled for each year. 

Next, the previous year’s Accumulated Fixed Charges total is divided by 

the factor (1+ Present Worth Rate). These two present worth quantities are 

added together and displayed in bold fonts for each year in the Row 

“TOTAL COST for Year” in the “FIXED CHARGES” Column.

The above Total Cost of Fixed Charges for each year is added to the 

Accumulated Fixed Charges of the previous year and also displayed in 

bold fonts for each year in the Row “ACCUMULATED through Year 

End.”
Bulletin 1724D-104

Page 7

(5) “kW LOSSES” Column: The annual peak demand for the first year is the 

same as the value entered by the user on Worksheet “INPUT.” Each 

subsequent year is calculated by multiplying the previous year’s annual 

peak kW losses by the factor: (1+ Growth Rate)2. To this product is 

added the positive or negative value of any changes in peak kW demand 

losses that has been entered for that year. The results are shown as “Ann. 

Peak” in this column.

The above annual peak kW demand of losses is assumed to occur during 

the one month of the year with the greatest total kW usage and demand 

losses. The demands for the other 11 months of the year are almost 

always less than the peak month. On Worksheet “INPUT” the user is 

instructed to enter a monthly demand coincidence factor. By definition, 

this factor, when multiplied by the annual peak demand, will yield an 

average monthly billing demand.

This coincidence factor varies greatly from system to system and area to 

area. The determination of this factor is left to the user.

The monthly average of kW losses is calculated by multiplying the annual 

peak of kW losses, (“Ann. Peak” discussed above), by the coincidence 

factor defined above. This monthly average is displayed as “Month Avg.” 

for each year. The calculated monthly averages of kW demand losses are 

used later to calculate the annual cost of kW losses.

(6) “kWh LOSSES” Column: The annual energy kWh losses are calculated 

for each year using the loss factor (LsF) calculated on Worksheet 

“INPUT,” the annual peak kW losses discussed in Section 4d(5) in this 

bulletin, and the following formula:

kWh Losses (Annual) = kW Losses (Annual.Peak) × LsF × 8766 (hrs/yr)

The kWh (Accumulated) Losses for each year is the sum of the above 

kWh Losses (Annual) for the year plus the kWh (Accumulated) Losses of 

the previous year. Both the Annual and the Accumulated kWh losses for 

each year are displayed in the “kWh LOSSES” Column.

(7) “(INFLATED COST OF:) ANNUAL kW” Column: The cost of kW 

demand losses are increased each year by the “Annual Cost Increase for 

kW Demand” entered on Worksheet “INPUT.” For each year, the cost of 

the kW demand losses are calculated according to the formulas:

Inflated Cost of Annual kW Losses = Monthly Av. kW Losses ×

12 (mo/yr) × Demand Cost × (1 + Annual Cost Increase)(Yn–Yo)
Bulletin 1724D-104

Page 8

where:

Yn = Year of Installation

Yo = Present (first) year of plan

The Monthly Average of kW Losses is discussed above in Section 4d(5) in 

this bulletin. The Demand Cost is entered on Worksheet “INPUT.”

Then, for each year, the present worth of the above Inflated Cost of 

Annual kW losses is calculated using the following formula:

Annual (Present Worth) Cost kW Losses = Inflated Cost of Annual kW Losses

(1 + Present Worth Rate)(Yn–Yo)

where:

Yn = Year of Installation

Yo = Present (first) year of plan

The above Present Worth Rate is entered on Worksheet “INPUT” as 

“Present Worth Rate for Cost of Losses (%).” The above Annual (Present 

Worth) Cost of kW Losses is displayed in bold fonts for each year on the 

worksheet in the “ANNUAL kW” Column and in the Row “TOTAL 

COST for Year.”

The Accumulated (present worth of the inflated) Cost of Annual kW 

Losses is calculated for each year by adding the Annual Cost of kW 

Losses for the year to the Accumulated Cost of kW Losses for the 

previous year. This accumulated total is displayed in bold font for each 

year in the Row “ACCUMULATED through Year End.”

(8) “(INFLATED COST OF:) ANNUAL kWh” Column: The present worth 

of the inflated annual cost of kWh energy losses is calculated according to 

the following steps.

Inflated Cost of Annual kWh Losses =

kWh Losses (Annual) × Energy Cost × (1 + Annual Cost Increase)(Yn–Yo)

where:

Yn = Year of Installation

Yo = Present (first) year of plan

The kWh Losses (Annual) is calculated as discussed in Section 4d(6) in 

this bulletin. The Energy Cost and Ann. Cost Increase (for energy) are 

entered on Worksheet “INPUT.” The above calculated quantity is 

displayed in the “ANNUAL kWh” Column for each year.

Then, the present worth of the above Inflated Cost of Annual kWh Losses
Bulletin 1724D-104

Page 9

is calculated for each year using the following formula:

Annual (Present Worth) Cost kWh Losses = Inflated Cost of Annual kWh Losses

(1 + Present Worth Rate)(Yn–Yo)

where:

Yn = Year of Installation

Yo = Present (first) year of plan

The Present Worth Rate (for the cost of losses) is entered on Worksheet 

“INPUT.” The above present worth of the Inflated Cost of Annual kWh 

Losses are also displayed for each year, in bold fonts, on the worksheet in 

the “ANNUAL kWh” Column and in the Row “TOTAL COST for Year.”

The Accumulated (present worth of the inflated) Cost of Annual kWh 

Losses is calculated for each year by adding the above Annual Cost of 

kWh Losses to the previous year’s Accumulated Cost of kWh Losses. 

This accumulated total is displayed in bold fonts for each year in the Row 

“ACCUMULATED through Year End.”

(9) Year Cost Totals (Rows): Two cost totals are displayed for each year of 

the plans next to the year number. The top number is the total cost for the 

year and the bottom number is the accumulated yearly costs through the 

end of the year. Both totals are the sum of the yearly displayed cost of 

fixed charges plus the annual cost of the kW demand and the kWh energy 

losses. All of the totals, displayed in bold font, are present worth costs.

e. Worksheet “PLAN 2” Worksheet “PLAN 2” is identical to “PLAN 1” in form 

and calculations. Both worksheets use the same economic and losses factors. 

This alternative plan can be used to compare the cost of construction and losses of 

two plans that each resolve the same electric system deficiency.

f. Worksheet “COMPARE” Worksheet “COMPARE” displays, in tables and bar 

graphs, the total accumulated costs and MWh energy losses from Worksheets 

“PLAN 1” and “PLAN 2” for the first 6 years and every 5 years thereafter. The 

tables and graphs conveniently summarize and exhibit entered economic factors 

and the final results of the procedure used.

5. EXPLANATION OF RESULTS

The year by year, accumulated totals of the present worth of the inflated costs of the fixed 

charges plus losses are considered the final results of this procedure. The accumulated 

total cost for any given year is the theoretical present year cash required to finance the 

plan through that given year. It is assumed that a portion of the theoretical cash on hand 

is earning interest at the cost of capital rate; the remaining portion of the cash on hand is 

earning interest at the entered present worth rates. The present worth rates may be the 
Bulletin 1724D-104

Page 10

blended interest rate, the rate of return on investments, the inflation rate or another rate 

and basis adopted at the discretion of the user.

6. SENSITIVITY ANALYSIS

Nearly all of the numerical data entered on the worksheets is either assumed or estimated. 

Thus, the calculated cost results are only accurate within some unknown range. The user 

can easily vary each of the input variables, individually or in combination, through 

reasonable ranges and monitor the new calculated cost totals. This sensitivity analysis 

will reveal total cost ranges and trends. This analysis may also give the user a perception 

of accuracy percentages and confidence levels of the final results. Performing this 

sensitivity analysis is a simple process and especially useful when comparing alternative 

plans whose calculated total costs nearly equal.
Bulletin 1724D-104 

Exhibit A 

Page 1 

WORKSHEET “READ ME”

INSTRUCTIONS FOR ENTERING DATA

* See RUS Bulletin 1724D-104 for additional details and sample data.

* Enter data and information in the shaded (yellow) cells only.

* Enter all numerical data in the format: XX.XX

WORKSHEET "FCR"

* Use Worksheet "FCR" to calculate the blended interest rate,

the fixed charge rate (FCR) and the FCR factors.

* If these quantities are already known, then go directly to Worksheet "INPUT."

* Copy required data from a recently completed Form 7.

* Enter data in shaded cells as instructed.

WORKSHEET "INPUT"

* Use Worksheet "INPUT" to calculate the area loss factor.

* Enter data, as instructed, into all of the shaded cells for complete results.

WORKSHEETS "PLAN 1" and "PLAN 2" (if used)

* Enter name of engineer, company and short plan description in shaded cells.

For each planned or proposed new construction item:

* Enter brief description of planned construction in the shaded cell immediately

to the right of the year in which the construction is planned.

(Up to 3 construction items and their costs may be entered per year.)

* Enter the present year estimated cost of each new construction in the

shaded cell immediately to the right of the construction description.

(Negative estimated costs (e.g. salvage) may be entered, however,

negative costs are also capitalized and may be meaningless.)

* Enter each expected future change in kW demand losses (+ or -) for each

year that a change is expected.

(Rev 8/2016)
Bulletin 1724D-104 

Exhibit B 

Page 1

WORKSHEET “FCR”

CALCULATE FIXED CHARGE RATE FACTORS

NOTES: If FCR factors are known, then go directly to Worksheet "INPUT"

 Enter data in the shaded (yellow) cells only.

ENTER the following amounts from the most recent RUS Form 7.

A 37,516,724 NET UTILITY PLANT Part C, Line 5

B 14,722,679 TOTAL MARGINS & EQUITIES Part C, Line 36

C 24,705,644 TOTAL LONG-TERM DEBT Part C, Line 41

D 513,600 DISTRIBUTION EXPENSE - OPER. Part A, Line 6 (b )

E 554,980 DISTRIBUTION EXPENSE - MAINT. Part A, Line 7 (b)

F 1,238,930 DEPRECIATION & AMORT. EXPENSE Part A, Line 13 (b)

G 251,778 TAX EXPENSE - PROPERTY Part A, Line 14 (b)

H 158,419 TAX EXPENSE - OTHER Part A, Line 15 (b)

ENTER the following construction loan data.

 Loan Source Interest Rate % of Total

 RUS 4.50 70.00

 CFC 4.75 30.00

 Other

 Other

J 4.58 Blended Interest Rate (%)

COST OF EQUITY FACTOR

K 12.0 ENTER the Capital Retirement Cycle. (Number of Years) 1.885

L 0.05 ENTER Utility Plant Growth Rate. (Format: 0.XX) 1.795

M 11.28 Calculated Cost of Equity Factor (%) (Goodw in Formula)

M = (1+L)^(K+1) - (1+L)^K x 100

(1+L)^K - 1

FIXED CHARGE RATE FACTORS

2.87 Cost of Debt (%) = (C / (B+C) ) x J

4.21 Cost of Equity (%) = (B / (B+C) ) x M

7.08 TOTAL COST OF CAPITAL (%) ( = Cost of Debt + Cost of Equity)

1.09 TAX RATE (%) = ( (G + H) / A ) x 100

3.30 DEPRECIATION RATE (%) = ( F / A ) x 100

2.85 OPERATIONS and MAINTENANCE RATE (%)

= ( (D + E) / A ) x 100

14.32 FIXED CHARGE RATE (%) (Sum of the above)
Bulletin 1724D-104 

Exhibit C 

Page 1

WORKSHEET “INPUT”

INPUT DATA for PRESENT WORTH ANALYSIS

Enter data in shaded (yellow) cells only. Enter all data below in the format: XX.XX

ANNUAL LOAD and LOSS FACTORS

LOAD FACTOR = LdF = Annual kWH Energy / (Peak kW Demand x 8766 hr./yr.)

LOSS FACTOR = LsF = .84 x (LdF)^2 + .16 x LdF

110,055,000 ANNUAL (purchased) ENERGY (kWh) - (Circuit, Substation or System)

20,869 ANNUAL PEAK DEMAND (kW) - (Circuit, Substation or System)

60.16 CALCULATED ANNUAL LOAD FACTOR (LdF) (%)

0.400 CALCULATED AREA LOSS FACTOR (LsF)

ENTER ABOVE LsF OR OTHER CALCULATED OR ASSUMED LsF TO BE USED.

FIXED CHARGE RATE

NOTE: If FCR and FCR factors on Worksheet "FCR" are satisfactory, then skip this section.

2.87 COST OF DEBT RATE (%) (May be Blended Interest Rate)

4.21 COST OF EQUITY RATE (%) ( = 0 if Blended Interest Rate used above)

1.09 TAX RATE (%)

3.30 DEPRECIATION RATE (%)

2.85 OPERATIONS & MAINTENANCE RATE (%)

14.32 CALCULATED FIXED CHARGE RATE (FCR) (Sum of Above)

14.32 ENTER ABOVE FCR OR OTHER CALCULATED OR ASSUMED FCR TO BE USED.

AREA PEAK kW DEMAND LOSSES and GROWTH RATE

10.0 CIRCUIT or AREA PEAK DEMAND LOSSES (kW) (First year of Plan)

90.0 MONTHLY DEMAND COINCIDENT FACTOR (%)

(Coincident factor x Peak Annual Demand Losses = Average monthly kW demand of losse

3.50 CIRCUIT or AREA ANNUAL GROWTH RATE (%)

DEMAND and ENERGY COSTS and ANNUAL INCREASES

8.00 DEMAND COST ($/kW/MONTH)

0.080 ENERGY COST ($/kWh)

5.00 ANNUAL COST INCREASE FOR kW DEMAND (%)

4.00 ANNUAL COST INCREASE FOR kWH ENERGY (%)

INFLATION and PRESENT WORTH RATES

3.50 ANNUAL INCREASES of the COST OF NEW CONSTRUCTION (Inflation) (%)

4.58 PRESENT WORTH RATE for COST OF NEW CONSTRUCTION (%)

6.50 PRESENT WORTH RATE for COST OF LOSSES (%)

(Present w orth rates may be: rate of return on investments; blended interest rate;

rate of inflation; or other assumed rate selected and explained by user)
Bulletin 1724D-104 

Exhibit D 

Page 1 

WORKSHEET “PLAN 1” (ONLY SHOWING FIRST 9 OF 30 YEARS)

ANNUAL and ACCUMULATED COST TOTALS of CARRYING CHARGES and LOSSES 

PRESENT WORTH of the INFLATED PRESENT ESTIMATED COSTS

ENGINEER: RUS DATE: 08/15/16

COMPANY: Sample for Bulletin 1724D-104

 PLAN 1: Build 2 miles of new line

NOTE: Area (or circuit) growth rate given at 3.50%

Thus, losses increase annually at 7.12%

ESTIMATED COST of NEW CONSTRUCTION DEMAND and ENERGY LOSSES and COSTS

CHANGES PRESENT INFLATED PRESENT FIXED kW LOSSES kWh LOSSES INFLATED COST OF:

PEAK kW YEAR COST WORTH CHARGES Ann. Peak Annual ANNUAL kW ANNUAL kWh

YEAR DESCRIPTION of CONSTRUCTION LOSSES EST. COST 3.50% 4.58% 14.32% Month Avg. Accumulated 5.00% 4.00%

10.0 35,064 864 2,805

9.0 35,064

2016

$ 3,669 TOTAL COST for Year $ 0 $ 864 $ 2,805

$ 3,669 ACCUMULATED through Year End $ 0 $ 864 $ 2,805

Build 2 miles of new line 120,000 124,200 118,761 17,007 10.7 37,561 972 3,125

9.6 72,625

2017

20,853 TOTAL for Year 120,000 124,200 118,761 17,007 913 2,934

24,523 ACCUM. thru Year 120,000 17,007 1,777 5,739

-5.0 6.5 22,705 617 1,965

5.8 95,330

2018

18,538 TOTAL for Year 16,262 544 1,732

43,060 ACCUM. thru Year 120,000 33,268 2,320 7,472

6.9 24,322 694 2,189

6.2 119,652

2019

17,936 TOTAL for Year 15,550 574 1,812

60,996 ACCUM. thru Year 120,000 48,818 2,895 9,284

7.4 26,054 780 2,438

6.7 145,706

2020

17,371 TOTAL for Year 14,869 607 1,895

78,367 ACCUM. thru Year 120,000 63,686 3,501 11,179

8.0 27,910 878 2,717

7.2 173,616

2021

16,841 TOTAL for Year 14,217 641 1,983

95,207 ACCUM. thru Year 120,000 77,904 4,142 13,162

8.5 29,898 987 3,026

7.7 203,514

2022

16,346 TOTAL for Year 13,595 677 2,074

111,553 ACCUM. thru Year 120,000 91,499 4,818 15,236

9.1 32,027 1,110 3,372

8.2 235,541

2023

15,884 TOTAL for Year 12,999 715 2,170

127,437 ACCUM. thru Year 120,000 104,498 5,533 17,405

9.8 34,308 1,249 3,756

8.8 269,850

2024

15,454 TOTAL for Year 12,430 755 2,270

142,891 ACCUM. thru Year 120,000 116,928 6,288 19,675

10.5 36,752 1,405 4,185

9.4 306,602

2025

15,057 TOTAL for Year 11,886 797 2,374

157,948 ACCUM. thru Year 120,000 128,814 7,085 22,049
Bulletin 1724D-104 

Exhibit E 

Page 1

WORKSHEET “PLAN 2” (ONLY SHOWING FIRST 9 OF 30 YEARS)

ANNUAL and ACCUMULATED COST TOTALS of CARRYING CHARGES and LOSSES 

PRESENT WORTH of the INFLATED PRESENT ESTIMATED COSTS

ENGINEER: DATE: 08/15/16

COMPANY:

 PLAN 2: Install regulators, defer new line

NOTE: Area (or circuit) Growth Rate Given at 3.50%

Thus, losses increase annually at 7.12%

ESTIMATED COST of NEW CONSTRUCTION DEMAND and ENERGY LOSSES and COSTS

CHANGES PRESENT INFLATED PRESENT FIXED kW LOSSES kWh LOSSES INFLATED COST OF:

PEAK kW YEAR COST WORTH CHARGES Ann. Peak Annual ANNUAL kW ANNUAL kWh

YEAR DESCRIPTION of CONSTRUCTION LOSSES EST. COST 3.50% 4.58% 14.32% Month Avg. Accumulated 5.00% 4.00%

10.0 35,064 864 2,805

9.0 35,064

2016

$ 3,669 TOTAL COST for Year $ 0 $ 864 $ 2,805

$ 3,669 ACCUMULATED through Year End $ 0 $ 864 $ 2,805

Install 3 new line voltage regulators 35,000 36,225 34,639 4,960 10.7 37,561 972 3,125

9.6 72,625

2017

8,807 TOTAL for Year 35,000 36,225 34,639 4,960 913 2,934

12,476 ACCUMULATED thru Year 35,000 4,960 1,777 5,739

11.5 40,237 1,093 3,482

10.3 112,862

2018

8,776 TOTAL for Year 0 0 0 4,743 964 3,070

21,253 ACCUMULATED thru Year 35,000 9,703 2,740 8,809

12.3 43,103 1,229 3,879

11.1 155,965

2019

8,764 TOTAL for Year 0 0 0 4,535 1,018 3,211

30,017 ACCUMULATED thru Year 35,000 14,239 3,758 12,020

Build 2 miles of new line, salvage regulators 120,000 137,703 115,119 16,485 13.2 46,173 1,383 4,321

(31,000) (35,573) (29,739) (4,259) 11.9 202,137

2020

20,997 TOTAL for Year 89,000 102,130 85,380 16,563 1,075 3,359

51,014 ACCUMULATED thru Year 124,000 30,802 4,833 15,379

-5.1 9.0 31,579 993 3,074

8.1 233,716

2021

18,806 TOTAL for Year 0 0 0 15,838 725 2,243

69,820 ACCUMULATED thru Year 124,000 46,639 5,558 17,622

9.6 33,828 1,117 3,424

8.7 267,544

2022

18,256 TOTAL for Year 0 0 0 15,144 766 2,347

88,076 ACCUMULATED thru Year 124,000 61,784 6,323 19,969

10.3 36,237 1,256 3,815

9.3 303,781

2023

17,744 TOTAL for Year 0 0 0 14,481 809 2,455

105,820 ACCUMULATED thru Year 124,000 76,264 7,132 22,424

11.1 38,818 1,413 4,250

10.0 342,599

2024

17,269 TOTAL for Year 0 0 0 13,847 854 2,568

123,089 ACCUMULATED thru Year 124,000 90,111 7,986 24,992

11.9 41,583 1,590 4,735

10.7 384,182

2025

16,828 TOTAL for Year 0 0 0 13,240 902 2,686

139,918 ACCUMULATED thru Year 124,000 103,352 8,888 27,678
Bulletin 1724D-104 

Exhibit F 

Page 1

WORKSHEET “COMPARE”

COMPARISON OF TOTAL ACCUMULATED COST and kWH LOSSES OF PLAN 1 vs PLAN 2

(All costs are the the accumulated present worth of the inflated cost)

TOTAL COSTS ($)

(Capitalized Costs + Losses) For first 6 years, favors PLAN 2 by 26.7% At 30 years, favors PLAN 1 by 3.2%

PLAN 1 PLAN 2 

2016 3,700 3,700

2017 24,500 12,500

2018 43,100 21,300

2019 61,000 30,000

2020 78,400 51,000

2021 95,200 69,800

2025 157,900 139,900

2030 228,300 218,600

2035 293,200 291,300

2040 356,000 361,700

2045 420,000 433,700

TOTAL CAPITALIZED COSTS ($)

For first 6 years, favors PLAN 2 by 40.2% At 30 years, favors PLAN 2 by 2.8%

PLAN 1 PLAN 2 

2016 0 0

2017 17,000 5,000

2018 33,300 9,700

2019 48,800 14,200

2020 63,700 30,800

2021 77,900 46,600

2025 128,800 103,400

2030 180,900 161,300

2035 222,500 207,700

2040 255,800 244,800

2045 282,400 274,400

TOTAL COST OF LOSSES ($)

For first 6 years, favors PLAN 1 by 25.4% At 30 years, favors PLAN 1 by 13.6%

PLAN 1 PLAN 2 

2016 3,700 3,700

2017 7,500 7,500

2018 9,800 11,500

2019 12,200 15,800

2020 14,700 20,200

2021 17,300 23,200

2025 29,100 36,600

2030 47,500 57,300

2035 70,700 83,600

2040 100,200 117,000

2045 137,600 159,300

TOTAL ACCUMULATED LOSSES (MWh)

For first 6 years, favors PLAN 1 by 26.1% At 30 years, favors PLAN 1 by 13.0%

PLAN 1 PLAN 2 

2016 40 40

2017 70 70

2018 100 110

2019 120 160

2020 150 200

2021 170 230

2025 310 380

2030 530 640

2035 850 1,000

2040 1,310 1,510

2045 1,940 2,230

0.00% Fixed Charge Rate

3.50% Annual cost inflation rate - Construction PLAN 1 Build 2 miles of new line

4.58% Annual present worth rate - Cost of construction PLAN 2 Install regulators, defer new line

3.50% Annual growth rate - kW demand

4.00% Annual cost inflation rate of engergy - kWh

6.50% Annual present worth rate - Cost of kWh losses

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2016 2017 2018 2019 2020 2021

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

2021 2025 2030 2035 2040 2045

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2016 2017 2018 2019 2020 2021

0

50,000

100,000

150,000

200,000

250,000

300,000

2021 2025 2030 2035 2040 2045

0

5,000

10,000

15,000

20,000

25,000

2016 2017 2018 2019 2020 2021

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2021 2025 2030 2035 2040 2045

0

50

100

150

200

250

2016 2017 2018 2019 2020 2021

0

500

1,000

1,500

2,000

2,500

2021 2025 2030 2035 2040 2045
INSTRUCTIONS FOR ENTERING DATA

* See RUS Bulletin 1724D-104 for additional details and sample data.

* Enter data and information in the shaded (yellow) cells only.

* Enter all numerical data in the format: XX.XX

WORKSHEET "FCR"

* Use Worksheet "FCR" to calculate the blended interest rate,

the fixed charge rate (FCR) and the FCR factors.

* If these quantities are already known, then go directly to Worksheet "INPUT."

* Copy required data from a recently completed Form 7.

* Enter data in shaded cells as instructed.

WORKSHEET "INPUT"

* Use Worksheet "INPUT" to calculate the area loss factor.

* Enter data, as instructed, into all of the shaded cells for complete results.

WORKSHEETS "PLAN 1" and "PLAN 2" (if used)

* Enter name of engineer, company and short plan description in shaded cells.

For each planned or proposed new construction item:

* Enter brief description of planned construction in the shaded cell immediately

to the right of the year in which the construction is planned.

(Up to 3 construction items and their costs may be entered per year.)

* Enter the present year estimated cost of each new construction in the

shaded cell immediately to the right of the construction description.

(Negative estimated costs (e.g. salvage) may be entered, however,

negative costs are also capitalized and may be meaningless.)

* Enter each expected future change in kW demand losses (+ or -) for each

year that a change is expected.

(Rev 8/2016)