Development Of A Joint Cost Allocation Manual For Integrated Community Energy Systems Phase Ii

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Download or read book Development of a Joint-Cost-Allocation Manual for Integrated Community Energy Systems (ICES). written by and published by . This book was released on 1978 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The problem addressed is the determination of an appropriate-cost-allocation system for an ICES. The use of a central cogenerating facility at the heart of the ICES means that some portion of the system costs are ''joint'': that is, some system components, and their associated costs, are not clearly identifiable with any single system output. An allocated portion of the joint costs must be added to the costs that are clearly assignable to each ICES function to arrive at a reasonable estimate of the total costs of providing each type of energy output. This Phase 1 report examines technical factors; reviews and synthesizes the relevant economic theory; assesses three generic approaches to cost allocation (public projects, cost accounting, mathematical programming); and surveys current utility and regulatory allocation procedures. Based on these steps, conclusions to date are: (1) economic theory suggests that cost allocation is unnecessary for optimal feasibility, pricing, and output decisions; (2) reasonable and practicable allocations are required for regulatory purposes and cost-sharing arrangements; (3) no single approach to cost allocation in practice is wholly satisfactory; (4) the mathematical programming approach seems most promising at this juncture; and (5) implementation of any method is dependent on data availability.