voltage drop studies reveal that the resultant voltage level will be satisfactory using a certain
conductor size, it is then necessary, or desirable, to consider the cost of energy losses and
determine if the designed line is the most economical. A simplified method of economic
comparison has been developed using data and methods which result in a graphic representation
of the total cost to own and operate various types of line at various load levels.
The example contained herein is for a typical electric system operating at 7.2/12.5 kV. If the
system, or parts of the system, operates at a different voltage, the calculations must be modified
accordingly. The required data to perform the economic analysis is as follows:
(a) Construction cost of new three phase lines with various conductor sizes.
(b) Fixed costs of the electrical system, including operation and maintenance expenses
which are represented as a percent of plant value.
(c) System load factor.
(d) Demand and energy rate for the system.
Based on this information, the Cost of Energy Losses is determined by using the following
First, the Loss Factor is calculated:
Loss Factor = .16(LF) + .84(LF) 2
Where: LF = Load Factor
Then, the Cost of Energy Losses is calculated:
Cost of Energy Losses
(8760) X Loss Factor
L = energy rate
M = demand rate
N = ratchet (if any)
The cost of energy losses for various conductors and their savings (in energy losses) are