By - Jon Brown

Avoided Cost Calculations and PURPA
December 14, 2020 | Online :: Central Time

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Pricing and Eligibility Changes to PURPA, December 15, 2020

Utilities must estimate avoided energy and capacity costs for a variety of reasons, including PURPA contracts, demand side management program design, and proposal evaluations.  Historic paradigms for determining avoided costs have consistently yielded values that have proven to be uneconomic. Low-cost renewables have substantially increased uncertainty in the avoided costs calculations.  Avoided cost analysis must now capture future states in ways that cannot be accommodated with traditional approaches.

This course will examine the process of how utilities have typically estimated their avoided cost in multiple contexts and recognize what is valuable in those analyses. It will provide a framework and best practices for calculating avoided cost to answer the ultimate question of what costs QFs enable utilities to avoid. 

Learning Outcomes

  • Identify what avoided cost is supposed to reflect/capture
  • Review background on avoided costs
  • Explore how to incorporate new market dynamics in avoided cost calculations
  • Examine traditional calculation of avoided cost
  • Discuss utility perspectives of avoided cost calculations



EUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET).  In obtaining this accreditation, EUCI has demonstrated that it  complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard.

EUCI is authorized by IACET to offer 0.6 CEUs for this event.


Requirements For Successful Completion Of Program

Participants must sign in/out each day and be in attendance for the entirety of the conference to be eligible for continuing education credit.

Instructional Methods

PowerPoint presentations and case studies will be used in program.


Monday, December 14, 2020 : Central Standard Time

8:45 – 9:00 a.m. :: Log In and Welcome

9:00 – 9:15 a.m. :: Overview and Introductions

9:15 a.m. – 5:00 p.m. :: Course Timing

12:30 – 1:15 p.m. :: Lunch Break

Background on Avoided Costs

    • Regulatory background of avoided cost economics
    • FERC principles on calculating avoided cost
    • History of PURPA
    • PURPA implementation by state

What Avoided Cost Is Supposed to Reflect/Capture

    • Value of energy from future resource
    • Capacity value
    • Renewable integration costs
      • Transmission upgrades
      • Ancillary service requirement increases

Traditional Calculation of Avoided Cost

    • Proxy Unit
    • Differential revenue requirement
    • Marginal cost to serve load
    • Competitive Solicitations

Advantages and Disadvantages of Each Approach

12:30 p.m. – 1:15 p.m. :: Lunch break

Incorporating New Market Dynamics in Avoided Cost Calculations

    • Increasing volatility and uncertainty in wholesale energy prices
    • Explosive growth of renewables
    • Influence of weather on load, renewable generation and prices
    • Changing load patterns
    • Technology changes

Best Practice for Calculating Avoided Cost

    • Connect avoided costs with resource plans
    • Defining the system operation conditions
    • Capturing market uncertainties
    • Defining ancillary services requirements

Discussion on Utility Perspectives of Avoided Cost Calculations

5:00 p.m. :: Program Adjournment


Dr. Brandon Mauch, PhD, Senior Energy Analyst, Ascend Analytics

Brandon Mauch is a Senior Energy Analyst at Ascend Analytics. He provides modeling expertise and support in the integrated resource planning activities, energy markets, regulation and utility demand side management.  Dr. Mauch works in Ascend’s consulting group providing resources planning and regulatory support.  Prior to joining Ascend, Brandon was a Senior Program Manager for CLEAResult Consulting where he managed utility energy efficiency and demand response programs for Midwestern utilities.  Before that, he was a Utility Regulation Engineer for the Iowa Utilities Board where he worked on regional energy policy issues, resource planning and rate cases for Iowa’s investor-owned utilities.  Brandon holds a Ph.D in Engineering and Public Policy from Carnegie Mellon University where his research focused on wind power forecasting and risk assessment of wind forecasts. He also holds a master’s degree in Mechanical Engineering from the University of Wisconsin and a bachelor’s degree in Mechanical Engineering from the University of Kansas. 

Online Delivery

We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.

  • You will receive a meeting invitation will include a link to join the meeting.
  • Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
    • You will need to join the appropriate meeting at the appropriate time.
  • If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
  • The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.


Please Note: This event is being conducted entirely online. All attendees will connect and attend from their computer, one connection per purchase. For details please see our FAQ

If you are unable to attend at the scheduled date and time, we make recordings available to all registrants for three business days after the event

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