Research Article
Sep 1963
Interest on Capital Invested in Construction
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VIEW THE REPLYAuthors: J. F. Muir, F.ASCE, and Eugen RuusAuthor Affiliations
Abstract
A rational method proposed for calculating interest accumulation on capital invested in construction facilitates the estimation of average unit cost of energy throughout the life of an electric utility project. The accumulated interest is related to the time elapsing between increments of construction expenditure and buildup of energy demand. The sum of the net first cost and the accumulated interest, divided by the plant capacity, gives the unit cost per kilowatt of capacity to be used as a rate base. Annual interest, depreciation, operating, maintenance, and other charges applied to this rate base by conventional methods give directly the average unit cost of energy throughout the life of the project. The simplicity of the method proposed for calculating unit costs is illustrated by an example.
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Information
Published In
Journal of the Power Division
Volume 89 • Issue 1 • September 1963
Pages: 1 - 8
Copyright
© 1963 American Society of Civil Engineers.
History
Published in print: Sep 1963
Published online: Feb 11, 2021
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Authors
Affiliations
J. F. Muir, F.ASCE
Head, Dept. of Civil Engineering, University of British Columbia, Vancouver, Canada
Eugen Ruus
Assoc. Prof., Dept. of Civ. Engrg., Univ. of British Columbia
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Terms of Use: ASCE Library Cards are for individual, personal use only. Reselling, republishing, or forwarding the materials to libraries or reading rooms is prohibited.