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Project: T173700 #30/121
 

As they contemplate allocation of their available capital investment budgets, transmission and distribution utilities are often required to consider the implications of investing their finite resources into functionally different types of projects while simultaneously deferring investments in others. This report proposes a theoretical methodology and practical model for helping utilities prioritize among two types of capital projects of comparable monetary value – namely, system renewal projects driven by deterioration of existing asset health, and system capacity enhancement projects to enable load growth. The model utilizes risk-based financial cost-benefit analysis techniques to identify preferred projects based on a range of inputs concerning the probability and impact of deferral of either type of project.

Keywords:

Utility investment, Prioritization, System capacity upgrade, Renewal, asset health, System capacity constraint, Utility capital investment, Trade-off analysis, Transmission system planning, Distribution system planning, Utility capital allocation, Investment deferral, Financial impact calculation of utility investment deferral, Risk analysis, Station expansion investments, Aging equipment replacement