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1408 IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 20, NO. 3, AUGUST 2005 One-Year Deferral Method for Estimating Avoided Transmission and Distribution Costs Xin Li, Member, IEEE, and Garry K. Zielke, Member, IEEE Abstract— This paper presents a new method for estimating similar drawback exists with the approach used in our existing avoided transmission and distribution costs associated with small avoided study. load reductions, named the one-year deferral method. It is estab- As indicated in [3], the deferral time in the PW method may lished on the basis of the system planner’s actual response to a small reduction in the forecast annual peak load. This paper has take a noninteger value (i.e., a fraction of a year) that is equal also explored the noninteger deferral time (i.e., a fraction of a to the ratio of peak load reduction to annual load growth. Thus, year) in the present worth method, which is seemingly inconsistent the scope of the PW method may be extended to the case of any with the system planning practice. In addition, as allowed by small load reduction. This approach, however, has a concep- the new method, the effect of the size and type (shape) of a load tual problem. In practice, the TD capital budget is planned/ reduction stream (i.e., a series of reductions in the forecast annual peak loads) on avoided costs is studied, which is important for maintained by system planners to meet the forecasted annual determining generic avoided cost values intended for various peak load that occurs either in the summer or in the winter. If applications. an item in the budget can b