| Inflation |
Economic Research Unit of the California Department of Finance, November 2006 CPI Forecast Report. Value listed is a statewide average for the CPI-U forecasted for 2007. |
| Discount Rate |
California Debt and Investment Advisory Commission, January 2007 Debt Line publication. This value reflects the highest listed California State Public Works Board bond issuance interest rate, rounded up to the nearest half percent. |
| Reinvestment Rate |
User should not input any value. |
| Routine Annual O&M |
Since this value is added to Inflation, User should not input any value and leave the escalation rate at the rate of Inflation, unless there is strong evidence to the contrary |
| Major Repair/ Replacements |
Since this value is added to Inflation, User should not input any value and leave the escalation rate at the rate of Inflation, unless there is strong evidence to the contrary. |
| Utility Electric Rate Escalation |
California Energy Commission, California State-Wide Weighted Average Retail Electricity Prices 1980 - 2005.
User should note that this information was used to determine a "Percentage Change on Previous Year" value for each year, starting with 1981. An average of these values was then calculated to establish the average annual escalation of utility retail electricity prices. The utilities included in the CEC data were PG&E, Southern California Edison, San Diego Gas and Electric, SMUD, LADWP, Glendale, Burbank, and Pasadena.
The calculated value for the average annual utility retail electricity price escalation, based on this information, is 3.19%. It is assumed that this value includes the affect of CPI on utility retail electricity prices. Therefore, the value that is reflected in the table above takes into account the Inflation value of 2.60%, resulting in a Utility Electric Rate Escalation of 0.50 %. This is not a forecast, and will be evaluated on an annual basis or as necessary. |
| Demand Rate Escalation |
Same as above for "Utility Electric Rate Escalation" |
| Natural Gas Price Escalation |
U.S. Department of Energy, Energy Information Administration, Natural Gas Navigator, Annual History of City Gate Prices, 1984 to 2005.
Based on this information, a "Percent Change on Previous Year" was calculated for each year, starting with the year 1985. An average of these values was then calculated to establish the average annual escalation of U.S. Natural Gas City Gate Prices. This value is 5.38%.
An analysis of PG&E's GNR2 gas tariff rate (historical pricing information from 1988 through 2006) shows an annual average increase of 7.78% for summer prices, 6.15% for winter. However, applying the policy of conservative analysis, a natural gas annual price escalation rate of 5% is chosen. This is assumed to include the affects of the CPI, therefore, escalation for the price of natural gas, for the purposes of the LCCA model, is 2.4%, which is added to Inflation for a total of 5%. This is not a forecast, and will be evaluated on an annual basis or as necessary. |
| Photovoltaic Degradation Factor (Solar) |
This value reflects solar panel warranties from the manufacturers of solar panels. A survey of several of the larger solar panel manufacturers listed a warranty of 80% of the nameplate generation output at 25 years, which results in a annual degradation factor of 0.8%. |
