Avoided costs: Ontario Hydro's experience

Abstract

Ontario Hydro regularly estimates avoided costs primarily for use in evaluating some design, operating, planning, and domestic marketing alternatives. Avoided costs reflect the expected cost of increased or decreased use of existing facilities or the expected cost of delaying or advancing additional resources. The author explains how Ontario Hydro calculates avoided costs. He includes a brief review of various methods proposed for calculating them. He refers to the theoretical basis for the methods used and lists in detail the assumptions used by Ontario Hydro.< >