LES AVOIDED COSTS
COMPLIANCE WITH FEDERAL ENERGY REGULATORY COMMISSION’S
REGULATIONS ORDER 69, 18 CFR PART 292.302
The Federal Energy Regulatory Commission (FERC) has adopted certain rules and regulations which
require the Lincoln Electric System to prepare and maintain for public inspection electric utility system
cost data as defined in the regulations Section 292.302(b)(1) through (d).
The purpose of this submittal is to make available to potential cogenerators and small power producers
present and anticipated future avoided cost data of electric energy and capacity for the LES. This data is
intended to help potential owners of Qualifying production Facilities evaluate the financial feasibility of a
cogeneration or small power production project. This data is not intended to represent a rate for
purchases from Qualifying Facilities but rather the first step in such a rate determination. The final prices
paid to Qualifying Facilities will also consider those factors enumerated in Section 292.304 of the
regulations.
The following tables contain that information required by the regulations, Section 292.302.
PREFACE
The calculated buyback rates for seasonal energy are set equal to the average cost of energy for the
System. All energy provided by LES is charged at the System average cost in the energy component of
the rates. This is basically the cost of fuel. Every customer pays the same System average energy
charge. Energy not produced by LES due to customer generation also saves LES this average cost of
energy. By putting the same price on every unit of energy, whether generated by LES or the customer,
all parties and all ratepayers are treated equally and fairly. This cost is determined in LES’ annual Cost
of Service study. The costs in this document use the average energy costs determined for summer and
winter seasons in the latest study, the 2013 Cost Analysis. The calculated buyback rates for seasonal
energy are $0.0204/kWh and $0.0200/kWh for the summer and winter, respectively. Qualifying facilities
greater than 100 kW will be treated on a case-by-case basis as allowed by federal regulations. The
projected costs of energy are listed below.
PURPA AVOIDED ENERGY COST
Section 292.302 (b)
(Dollars per kWh)
2014
2015
2016
2017
2018
2019
Summer
$0.0210
$0.0216
$0.0216
$0.0221
$0.0221
$0.0222
Winter
$0.0206
$0.0212
$0.0212
$0.0216
$0.0216
$0.0218
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292.302 (b) (2)
"The electric utility’s plan for additions of capacity during the next 10 years." (2014-2023)
LES has no base load, intermediate or peaking resource additions committed in this time frame. LES
may add renewable generating resources (e.g., wind generation) within this time frame, but these
additions would most likely not be made as a result of generating capacity needs.
292.302 (b) (3)
"The estimated capacity and energy cost of additions during the next 10 years." (2014-2023)
2014 Addition
The estimates shown below are the $/kW/month capacity costs for a conventional combustion turbine
addition. The annual capacity cost is allocated evenly over each of the 12 months in the year.
2014
$3.21
2015
$3.28
2016
$3.35
2017
$3.42
2018
$3.50
2019
$3.58
2020
$3.66
2021
$3.74
2022
$3.82
2023
$3.90
The energy cost for ten years, pursuant to Section 292.302(b)(2), is determined to be the projected
System average energy cost, as allowed by Section 292.302(d). This energy cost, which would be in
addition to the capacity cost, is shown below in $/kWh.
2014
$0.0220
2015
$0.0227
2016
$0.0227
2017
$0.0232
2018
$0.0232
2019
$0.0233
2020
$0.0236
2021
$0.0237
2022
$0.0243
2023
$0.0243
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