Decremental Cost definition
Decremental Cost means the costs avoided by a Party solely by reason of its purchase of an incremental amount of energy, such as costs for fuel, reactant, labor, operation, maintenance, start-up, fuel handling, taxes, emission allowances, and transmission and ancillary service charges. Such costs may also include costs that otherwise would have been paid for energy to third parties where the Party has an existing contractual entitlement to purchase energy.
Decremental Cost means the cost of fuel, operating labor and maintenance which would have been incurred to provide the Operating Reserves at any time and which are avoided by the other Participant, including the cost of avoiding the starting and operating of a generating unit or units and a proportional amount of the annual debt service on the capital investment of the highest cost (per kw) generating unit on the receiving Participant’s system. The decremental cost of Operating Reserves shall be the total of such avoided costs to the receiving Participant. In situations where a Participant would have incurred replacement fuel costs which are higher than the cost of existing fuel supply, replacement costs shall be utilized.
Examples of Decremental Cost in a sentence
The Incremental Cost of supplying such service plus one-half of the overall savings of such transaction, where overall savings shall be equal to the difference between the Incremental Cost of the selling Pool Participant and the Decremental Cost of the purchasing Pool Participant.