Laserfiche WebLink
<br />Annual Costs <br /> <br /> <br />.N) <br />. go <br />'f\.;jo <br />.1_ <br /> <br />The annualization of the construction costs is divided <br />according to whether or not the costs represent depreciating <br />capital. Depreciating capital costs (item 1-6 above) are <br />multiplied by a "fixed charge factor," FCR, which is the <br />percentage of total depreciating capital cost that is en- <br />compassed by interest, amortization, insurance, and taxes. <br />Non-depreciating capital costs (7 and 8) are multiplied by the <br />prevailing interest rate selected for project evaluation or <br />incurred in borrowing. <br /> <br />Annual operation and maintenance costs have been divided <br />into six categories described as: <br /> <br />(1) Labor and materials for plant or support facility <br />operation; <br />(2) Chemicals for pretreatment and process additions; <br />(3) Fuel to power steam generation equipment; <br />(4) Electricity for pumps, filters, etc.; <br />(5) Steam generator operation (0) and maintenance (M); <br />and <br />(6) Replacement of process elements. <br /> <br />These annual costs must also be updated for price increases <br />due to inflation. Labor and materials and steam generation <br />o & M are updated using the Bureau of Labor Statistics Labor <br />Cost Index, SIC 494-7, which was 3.76 in July 1971 and 4.93 in <br />January 1976. Chemical costs are multiplied by the present <br />to 1971 ratio of the Bureau of Labor Statistics cost index for <br />chemicals and allied products (181 for 1976/104.4 for 1971). <br />Fuel and electricity costs are estimated using present prices <br />for these inputs and are therefore always estimated currently. <br />Replacement costs are expressed on functions of plant capacity <br />and are also not updated by cost indexing. <br /> <br />Water and Salt Costs <br /> <br />After describing the individual costs associated with <br />desalting systems, it is generally necessary to express such <br />costs in either dollars per unit volume of product water <br />(for water supply feasibility) or dollars per unit of salt <br />extracted (for salinity control studies). These cost bases <br />are determined in this study by dividing the total annual <br />costs by the annual volume of product water or brine salts. <br /> <br />Depreciating capital costs for the plant itself and the <br />feedwater-brine disposal systems are multiplied by the fixed <br />charge factor. Non-depreciating costs are next multiplied by <br />the interest rate, added to the annualized depreciating costs, <br />and finally summed with the remaining annual cost. Thus, using <br />the eight capital cost categories and six annual cost elements, <br /> <br />26 <br />