Distributed Renewable Energy Operating Impacts and Valuation Study

Developing a Winning Business Case for Solar DE Deployment
establish a clearly endorsable and unambiguous identification of value for discrete and specific
conditions.
It is fully anticipated that APS and others will be able to use this Study as a starting point to form
and evaluate other possible scenarios and outcomes which would be appropriate and proper for
other forums to explore. Certainly, there are many potential industry pathways. The value of this
more confined approach to the quantifiable evaluation of solar DE deployment comes from
establishing a solid foundation upon which all parties can then build, and creating a supportable
framework for discussion among all parties.
6.2.1 Approach to Quantification of Saving
The approach used in this Study to develop a winning business case for APS starts with the
quantified benefits resulting from the potential capacity and energy savings levels found in the
Study analyses. The cost savings to APS would arise from two primary sources: future
reductions in fuel and purchased power associated with reduced APS energy needs, and future
capital investment reductions associated with deferred or avoid APS capacity. These provide the
key ingredients of quantifiable savings from solar DE deployment in all three of APS’s business
sectors—distribution, transmission, and generation – as summarized in Figure 6-1.
Figure 6-1: Quantification of Savings
Certain potential savings associated with various environmental and societal costs and benefits
not otherwise captured through regulated emission allowance costs and credits discussed in
Section 5 were not explicitly included in this quantification effort. This approach was purposely
used in an attempt to keep the Study effort focused on the more readily quantifiable and less
speculative savings that are identified in the Study.
Distributed Renewable Energy Operating Impacts & Valuation Study R. W. Beck, Inc. 6-3