Application of net present value analysis to cost justify the conversion of a 4 kV distribution system to 23 kV

A discounted-after-tax cash flow analysis is applied to the investment costs and loss savings related to converting a 4160 V distribution system to 22860 V. The technique used a spreadsheet program to perform the financial calculations which enabled rapid analysis of several substations in a short period of time. The ability to vary cost and benefit estimates and the underlying financial assumptions in the model are strengths of the spreadsheet approach. Evaluation of the 464 kV substations in this study revealed that the proposed conversion is marginally justified by the value of the eliminated losses