Operational Energy Capabilities Improvement Fund Program Proposal
Return on Investment (ROI) Assessment Spreadsheet
To consider the economic value of the proposed program, one must compare the incremental costs and savings between the baseline scenario, that is, the
current situation assuming no change, and the scenario where the proposed program is conducted and the resulting technology or practice then fielded.
The key figures of merit here are Net Present Value (NPV) and the Savings to Investment Ratio (SIR). The overall feasibility of the program will
also be considered in light of the costs projected to implement it.
The NPV gives an measure of the overall value of the program by measuring the present value of any net savings. The SIR is a measure of the
overall efficiency, or "bang for the buck" of the investment. The NPV should be positive and the SIR above 1.0.
Instructions for filling out the "Standard ROI Estimates" worksheet are as follows:
1. Enter figures using constant FY 12 dollars for all 10 fiscal years. Indicate the units (e.g. thousands or millions) towards the top of the page.
2. In Line #1, enter the costs under the baseline scenario. This should cover the cost of energy, using the Fully Burden Cost of Energy (FBCE), and any
other costs such as maintenance or procurement that would be changed by the implementation of the technologies or practices from the proposed
program. Costs that would not change do not matter.
3. In Line #2, enter the costs of the proposed program. This is the cost of the program to be supported by OEPP.
4. In Line #3, enter the investment costs of implementing the technology or practices resulting from the proposed program -- in particular any
procurement costs.
5. In Line #4, enter the costs of energy (using FBCE) and other costs that would change once implementing the proposed program. However, please
note that the costs of procuring the new technology are already covered in line #3.
6. Lines # 5,6,7,8 now display the present value of these various costs using a discount rate of 1.3%, the OMB approved discount rate for 10 years or
longer.
7. Lines # 9 and 10 now show the incremental costs and incremental savings associated with the program. Using these the NPV and SIR are calculated
and displayed.
If you wish to do this same analysis using another set of numbers for FBCE, please add another sheet to the workbook by copying the standard ROI
sheet and then altering the entries accordingly. Please indicate the FBCE you are using for the additional analysis at the appropriate place at the bottom
of the sheet.
Return on Investment Assessment Spreadsheet
Operational Energy Capabilities Improvement Fund
Figures are in (thousands/millions) of constant FY 12 dollars
Line 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 10 Year Total
Baseline energy costs using Fully Burdened Cost of Energy
1 0
(FBCE) and other costs that would change
2 Cost of implementing proposed program 0
Incremental investment cost of purchasing mature technology
3
or implementing practice resulting from proposed program 0
Energy and other changing costs under scenario of fielding
4
new technology/practice from proposed program (using FBCE) 0
5 Present value of baseline costs in Line #1 0 0 0 0 0 0 0 0 0 0 0
6 Present value of proposed program costs in Line #2 0 0 0 0 0 0 0 0 0 0 0
7 Present value of incremental investment from Line #3 0 0 0 0 0 0 0 0 0 0 0
8 Present value of energy and others costs in Line #4 0 0 0 0 0 0 0 0 0 0 0
9 Present value of all incremental costs (Line #6 plus Line #7)
0 0 0 0 0 0 0 0 0 0 0
Present value of incremental energy and other savings (Line #5
10 0 0 0 0 0 0 0 0 0 0 0
minus Line #8)
Net Present Value (Line #10 minus Line #9) 0
Savings-to-Investment Ratio (Line #10 divided by Line #9) #DIV/0!
Discount Rate 1.30%
Fully Burden Cost of Energy Used in this Analysis
Fuel 15 $/gal
Disposable Batteries 1118 $/kw-hr
Rechargeable Batteries 6.32 $/kw-hr