Clean Energy Project Analysis Software

Small Hydro Project Model

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CDM / JI Project Analysis
Sensitivity Analysis

Version 3.0 © Minister of Natural Resources Canada 1997-2004. NRCan/CETC - Varennes

RETScreen® Energy Model - Small Hydro Project Training & Support

Units: Metric

Site Conditions Estimate Notes/Range

Project name Independent Power Production See Online Manual
Project location British Columbia, Canada
Latitude of project location °N 53.00 -90.00 to 90.00
Longitude of project location °E -122.00 -180.00 to 180.00
Gross head m 110.00
Maximum tailwater effect m 1.00
Residual flow m³/s 0.00 Complete Hydrology & Load sheet
Firm flow m³/s 3.31

System Characteristics Estimate Notes/Range

Grid type - Central-grid
Design flow m³/s 7.600
Turbine type - Francis Complete Equipment Data sheet
Number of turbines turbine 1
Turbine peak efficiency % 93.0%
Turbine efficiency at design flow % 89.5%
Maximum hydraulic losses % 4% 2% to 7%
Generator efficiency % 97% 93% to 97%
Transformer losses % 1% 1% to 2%
Parasitic electricity losses % 1% 1% to 3%
Annual downtime losses % 4% 2% to 7%

Annual Energy Production Estimate Notes/Range

Small hydro plant capacity kW 6,696
MW 6.696
Small hydro plant firm capacity kW 2,663
Available flow adjustment factor - 1.00
Small hydro plant capacity factor % 78% 40% to 95%
Renewable energy delivered MWh 45,487
GJ 163,753

Flow-Duration and Power Curves

Available Flow Flow Used Available Power
14.000 8,000

12.000 7,000

6,000
10.000
Power (kW)
Flow (m³/s)

5,000
8.000
4,000
6.000
3,000
4.000
2,000

2.000 1,000

0.000 0
0 10 20 30 40 50 60 70 80 90 100
Percent Time Flow Equalled or Exceeded (%)

Complete Cost Analysis sheet

Version 3.0 © Minister of Natural Resources Canada 1997 - 2004. NRCan/CETC - Varennes

05/08/2004; HYDRO01-B.xls
RETScreen® Hydrology Analysis and Load Calculation - Small Hydro Project

Hydrology Analysis Estimate Notes/Range

Project type Reservoir
Hydrology Parameters
Residual flow m³/s 0
Percent time firm flow available % 95% 90% to 100%
Firm flow m³/s 3.31

Flow-Duration Curve Data

Time Flow
Flow-Duration Curve
(%) (m³/s)
14.00
0% 12.00
5% 10.46
10% 9.75 12.00
15% 8.95
20% 8.29
10.00
25% 7.93
30% 7.62
35% 7.28
Flow (m³/s)

8.00
40% 7.03
45% 6.70
50% 6.41 6.00
55% 6.11
60% 5.76 4.00
65% 5.42
70% 5.22
75% 4.89 2.00
80% 4.50
85% 4.08
0.00
90% 3.81 0 10 20 30 40 50 60 70 80 90 100
95% 3.31
Percent Time Flow Equalled or Exceeded (%)
100% 2.18

Load Characteristics Estimate Notes/Range

Grid type Central-grid

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Energy Model sheet

Version 3.0 © Minister of Natural Resources Canada 1997 - 2004. NRCan/CETC - Varennes

05/08/2004; HYDRO01-B.xls
RETScreen® Equipment Data - Small Hydro Project

Small Hydro Turbine Characteristics Estimate Notes/Range

Gross head m 110.00
Design flow m³/s 7.600
Turbine type - Francis See Product Database
Turbine efficiency curve data source - Standard
Number of turbines turbine 1
Small hydro turbine manufacturer Alstom
Small hydro turbine model
Turbine manufacture/design coefficient - 4.5 2.8 to 6.1; Default = 4.5
Efficiency adjustment % 0% -5% to 5%
Turbine peak efficiency % 93.0%
Flow at peak efficiency m³/s 6.1
Turbine efficiency at design flow % 89.5%

Turbine Efficiency Curve Data

Flow Turbine Turbines Combined
efficiency running turbine Efficiency Curve - 1 Turbine(s)
(%) # efficiency
1.00
0% 0.00 0 0.00
5% 0.00 1 0.00 0.90
10% 0.12 1 0.12
15% 0.27 1 0.27 0.80
20% 0.40 1 0.40
25% 0.51 1 0.51 0.70
30% 0.60 1 0.60
35% 0.69 1 0.69 0.60
Efficiency

40% 0.75 1 0.75

45% 0.81 1 0.81 0.50
50% 0.85 1 0.85
55% 0.88 1 0.88 0.40
60% 0.90 1 0.90
0.30
65% 0.92 1 0.92
70% 0.93 1 0.93
0.20
75% 0.93 1 0.93
80% 0.93 1 0.93 0.10
85% 0.93 1 0.93
90% 0.92 1 0.92 0.00
95% 0.91 1 0.91 0 10 20 30 40 50 60 70 80 90 100
100% 0.89 1 0.89 Percent of Rated Flow (%)

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Energy Model sheet

Version 3.0 © Minister of Natural Resources Canada 1997 - 2004. NRCan/CETC - Varennes

05/08/2004; HYDRO01-B.xls
RETScreen® Cost Analysis - Small Hydro Project Search Marketplace

Costing method: Formula Currency: $ $ Cost references: Canada - 2000

Second currency: USA USD Rate: $/USD 1.47730
Formula Costing Method Notes/Range
Input Parameters
Project country Canada
Cold climate? yes/no No
Number of turbines turbine 1
Flow per turbine m³/s 7.6
Approx. turbine runner diameter (per unit) m 1.2
Project classification:
Suggested classification - Mini
Selected classification - Small
Existing dam? yes/no No
New dam crest length m 125.0
Rock at dam site? yes/no Yes
Maximum hydraulic losses % 4%
Intake and miscellaneous losses % 1% 1% to 5%
Access road required? yes/no Yes
Length km 2.2
Tote road only? yes/no Yes
Difficulty of terrain - 4.0 1.0 to 6.0
Tunnel required? yes/no Yes
Length m 600
Allowable tunnel headloss factor % 2.0% 4.0% to 7.0%
Percent length of tunnel that is lined % 0% 15% to 100%
Tunnel diameter m 2.9
Canal required? yes/no No
Penstock required? yes/no Yes
Length m 50.0
Number of identical penstocks penstock 1
Allowable penstock headloss factor % 0.4% 1.0% to 4.0%
Pipe diameter m 1.50
Average pipe wall thickness mm 7.7
Distance to borrow pits km 20.0
Transmission line
Length km 1.8
Difficulty of terrain - 2.0 1.0 to 2.0
Voltage kV 13.8
Interest rate % 8.0%

Cost Adjustment Amount

Initial Costs (Formula Method) (local currency) Factor (local currency) Relative Costs
Feasibility Study $ 403,000 0.00 $ - 0.0% 0% USD -
Development $ 423,000 2.60 $ 1,099,800 7.9% 0% USD -
Land rights $ 201,322 1.4% 0% USD -
Development Sub-total: $ 1,301,122 9.3% 0% USD -
Engineering $ 490,000 5.90 $ 2,891,000 20.8% 0% USD -
Energy Equipment $ 2,229,000 1.34 $ 2,986,860 21.4% 100% USD 2,021,837
Balance of Plant
Access road $ 209,000 0.94 $ 196,460 1.4% 0% USD -
Transmission line $ 46,000 8.10 $ 372,600 2.7% 100% USD 252,217
Substation and transformer $ 83,000 8.08 $ 670,640 4.8% 100% USD 453,963
Penstock $ 93,000 3.40 $ 316,200 2.3% 100% USD 214,039
Canal $ - 0.00 $ - 0.0% 100% USD -
Tunnel $ 605,000 3.12 $ 1,887,600 13.6% 100% USD 1,277,736
Civil works (other) $ 6,822,000 0.24 $ 1,637,280 11.8% 0% USD -
Balance of Plant Sub-total: $ 7,858,000 $ 5,080,780 36.5% 64% USD 2,197,956
Miscellaneous $ 1,592,000 0.43 $ 684,560 4.9% 0% USD -
Other - Miscellaneous Cost $ 984,079 $ 984,079 7.1% 100% USD 666,133
$ - 0.0% 100% USD -
Miscellaneous Sub-total: $ 1,668,639 12.0% 59% USD 666,133
Initial Costs - Total (Formula Method) $ 12,995,000 $ 13,928,401 100.0% 52% USD 4,885,926

Annual Costs (Credits) Unit Quantity Unit Cost Amount Relative Costs Quantity Range Unit Cost Range
O&M
Land lease project 1 $ 5,492 $ 5,492 $0 - $2,000
Property taxes % 1.0% $ 13,928,401 $ 139,284 0.0% - 0.6%
Water rental kW 6,696 $ 20 $ 133,922 $0 - $20
Insurance premium % 0.40% $ 13,928,401 $ 55,714 0.25% - 1.00%
Transmission line maintenance % 1.1% $ 1,043,240 $ 11,163 3.0% - 6.0%
Spare parts % 0.50% $ 13,928,401 $ 69,642 0.50% - 1.00%
O&M labour p-yr 1.00 $ 40,000 $ 40,000 0.20 - 1.00 $40K - $80K
GHG monitoring and verification project $ -
Travel and accommodation p-trip 6 $ 1,000 $ 6,000 2 - 10 $500 - $10,000
General and administrative % 10% $ 461,216 $ 46,122 1% - 20%
Other - O&M Cost 1 $ 41,000 $ 41,000
Contingencies % 10% $ 507,338 $ 50,734 10% - 20%
Annual Costs - Total $ 599,071 100.0%

Periodic Costs (Credits) Period Unit Cost Amount Interval Range Unit Cost Range
$ -
$ -
$ -
End of project life - $ - Go to GHG Analysis sheet

Version 3.0 © Minister of Natural Resources Canada 1997 - 2004. NRCan/CETC - Varennes

05/08/2004; HYDRO01-B.xls
 ®
RETScreen Greenhouse Gas (GHG) Emission Reduction Analysis - Small Hydro Project

Use GHG analysis sheet? Yes Type of analysis: Standard Complete Financial Summary sheet
Potential CDM project? No Use simplified baseline methods? No

Background Information

Project Information Global Warming Potential of GHG

Project name Independent Power Production Project capacity 2.66 MW 21 tonnes CO2 = 1 tonne CH4 (IPCC 1996)
Project location British Columbia, Canada Grid type Central-grid 310 tonnes CO2 = 1 tonne N2O (IPCC 1996)

Base Case Electricity System (Baseline)

Fuel type Fuel mix CO2 emission CH4 emission N2O emission Fuel conversion T&D GHG emission
factor factor factor efficiency losses factor
(%) (kg/GJ) (kg/GJ) (kg/GJ) (%) (%) (tCO2/MWh)
Natural gas 100.0% 56.1 0.0030 0.0010 45.0% 8.0% 0.491
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
Electricity mix 100% 135.5 0.0072 0.0024 8.0% 0.491

Does baseline change during project life? No Change in GHG emission factor % -20.0%

Proposed Case Electricity System (Small Hydro Project)

Fuel type Fuel mix CO2 emission CH4 emission N2O emission Fuel conversion T&D GHG emission
factor factor factor efficiency losses factor
(%) (kg/GJ) (kg/GJ) (kg/GJ) (%) (%) (tCO2/MWh)
Electricity system
Small hydro 100.0% 0.0 0.0000 0.0000 100.0% 8.0% 0.000

GHG Emission Reduction Summary

Years of Base case Proposed case End-use Gross annual GHG credits Net annual
occurence GHG emission GHG emission annual energy GHG emission transaction GHG emission
factor factor delivered reduction fee reduction
(yr) (tCO2/MWh) (tCO2/MWh) (MWh) (tCO2) (%) (tCO2)
Electricity system 1 to 4 0.491 0.000 41,848 20,550 0.0% 20,550

Complete Financial Summary sheet

Version 3.0 © United Nations Environment Programme & Minister of Natural Resources Canada 2000 - 2004. UNEP/DTIE and NRCan/CETC - Varennes

05/08/2004; HYDRO01-B.xls
RETScreen® Financial Summary - Small Hydro Project

Annual Energy Balance Yearly Cash Flows

Year Pre-tax After-tax Cumulative
Project name Independent Power Production Peak load kW Central-grid # $ $ $
Project location British Columbia, Canada Energy demand MWh Central-grid 0 (3,482,100) (2,571,183) (2,571,183)
Renewable energy delivered MWh 45,487 Net GHG reduction tCO2/yr 20,550 1 378,762 372,187 (2,198,996)
Excess RE available MWh - Net GHG reduction - yr 5 + beyond tCO2/yr 20,550 2 425,114 390,368 (1,808,628)
Firm RE capacity kW 2,663 Net GHG emission reduction - 21 yrs tCO2 431,557 3 472,934 408,739 (1,399,889)
Grid type Central-grid Net GHG emission reduction - 20 yrs tCO2 411,007 4 522,267 427,276 (972,613)
5 573,161 445,950 (526,664)
Financial Parameters 6 625,664 464,729 (61,935)
7 679,827 483,578 421,643
Avoided cost of energy $/kWh 0.0439 Debt ratio % 75.0% 8 735,702 502,456 924,099
RE production credit $/kWh - Debt interest rate % 8.0% 9 793,342 521,319 1,445,418
RE production credit duration yr 15 Debt term yr 20 10 852,802 540,117 1,985,535
RE credit escalation rate % 2.0% 11 914,140 558,795 2,544,330
GHG emission reduction credit $/tCO2 - Income tax analysis? yes/no Yes 12 977,414 577,292 3,121,622
GHG reduction credit duration yr 21 Effective income tax rate % 43.6% 13 1,042,684 595,539 3,717,161
GHG credit escalation rate % 0.0% Loss carryforward? yes/no Flow-through 14 1,110,013 613,462 4,330,623
Avoided cost of excess energy $/kWh - Depreciation method - Straight-line 15 1,179,465 630,979 4,961,603
Avoided cost of capacity $/kW-yr - Depreciation tax basis % 85.0% 16 1,251,106 647,998 5,609,601
Energy cost escalation rate % 3.0% Depreciation rate % 30.0% 17 1,325,006 664,420 6,274,021
Inflation % 2.5% Depreciation period yr 20 18 1,401,233 680,134 6,954,155
Discount rate % 10.0% Tax holiday available? yes/no No 19 1,479,861 695,020 7,649,175
Project life yr 20 Tax holiday duration yr 5 20 1,560,965 708,945 8,358,120
21 - - 8,358,120
Project Costs and Savings 22 - - 8,358,120
23 - - 8,358,120
Initial Costs Annual Costs and Debt 24 - - 8,358,120
Feasibility study 0.0% $ - O&M $ 599,071 25 - - 8,358,120
Development 9.3% $ 1,301,122 Fuel/Electricity $ - 26 - - 8,358,120
Engineering 20.8% $ 2,891,000 Debt payments - 20 yrs $ 1,063,979 27 - - 8,358,120
Energy equipment 21.4% $ 2,986,860 Annual Costs and Debt - Total $ 1,663,050 28 - - 8,358,120
Balance of plant 36.5% $ 5,080,780 29 - - 8,358,120
Miscellaneous 12.0% $ 1,668,639 Annual Savings or Income 30 - - 8,358,120
Initial Costs - Total 100.0% $ 13,928,401 Energy savings/income $ 1,996,882 31 - - 8,358,120
Capacity savings/income $ - 32 - - 8,358,120
Incentives/Grants $ - RE production credit income - 15 yrs $ - 33 - - 8,358,120
GHG reduction income - 21 yrs $ - 34 - - 8,358,120
Annual Savings - Total $ 1,996,882 35 - - 8,358,120
Periodic Costs (Credits) 36 - - 8,358,120
# $ - Schedule yr # 0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0 37 - - 8,358,120
# $ - Schedule yr # 0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0 38 - - 8,358,120
# $ - Schedule yr # 0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0 39 - - 8,358,120
End of project life - $ - Schedule yr # 20 40 - - 8,358,120
41 - - 8,358,120
Financial Feasibility 42 - - 8,358,120
Calculate energy production cost? yes/no No 43 - - 8,358,120
Pre-tax IRR and ROI % 17.6% Energy production cost $/kWh 0.0679 44 - - 8,358,120
After-tax IRR and ROI % 17.3% Calculate GHG reduction cost? yes/no No 45 - - 8,358,120
Simple Payback yr 10.0 GHG emission reduction cost $/tCO2 Not calculated 46 - - 8,358,120
Year-to-positive cash flow yr 6.1 Project equity $ 3,482,100 47 - - 8,358,120
Net Present Value - NPV $ 1,618,544 Project debt $ 10,446,301 48 - - 8,358,120
Annual Life Cycle Savings $ 190,114 Debt payments $/yr 1,063,979 49 - - 8,358,120
Benefit-Cost (B-C) ratio - 1.46 Debt service coverage - 1.36 50 - - 8,358,120

Version 3.0 © Minister of Natural Resources Canada 1997 - 2004. NRCan/CETC - Varennes

Cumulative Cash Flows Graph

05/08/2004; HYDRO01-B.xls
RETScreen® Financial Summary - Small Hydro Project

Small Hydro Project Cumulative Cash Flows

Independent Power Production, British Columbia, Canada
Renewable energy delivered (MWh/yr): 45,487 Total Initial Costs: $ 13,928,401 Net average GHG reduction (tCO2/yr): 20,550

10,000,000

8,000,000

6,000,000
Cumulative Cash Flows ($)

4,000,000

2,000,000

0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

(2,000,000)

(4,000,000)
Years

IRR and ROI: 17.3% Year-to-positive cash flow: 6.1 yr Net Present Value: $ 1,618,544

Version 3.0 © Minister of Natural Resources Canada 1997 - 2004. NRCan/CETC - Varennes

05/08/2004; HYDRO01-B.xls
 ®
RETScreen Sensitivity and Risk Analysis - Small Hydro Project

Use sensitivity analysis sheet? Yes Perform analysis on After-tax IRR and ROI
Perform risk analysis too? Yes Sensitivity range 20%
Project name Independent Power Production Threshold 15.0 %
Project location British Columbia, Canada

Sensitivity Analysis for After-tax IRR and ROI

Avoided cost of energy ($/kWh)

RE delivered 0.0351 0.0395 0.0439 0.0483 0.0527
(MWh) 17% -20% -10% 0% 10% 20%
36,390 -20% #DIV/0! -1.3% 5.7% 10.8% 15.2%
40,938 -10% -1.3% 6.4% 11.9% 16.8% 21.2%
45,487 0% 5.7% 11.9% 17.3% 22.2% 26.9%
50,036 10% 10.8% 16.8% 22.2% 27.3% 32.4%
54,584 20% 15.2% 21.2% 26.9% 32.4% 37.8%

Avoided cost of energy ($/kWh)

Initial costs 0.0351 0.0395 0.0439 0.0483 0.0527
($) 0.2 -20% -10% 0% 10% 20%
11,142,721 -20% 13.5% 19.9% 25.8% 31.5% 37.2%
12,535,561 -10% 9.4% 15.6% 21.2% 26.4% 31.5%
13,928,401 0% 5.7% 11.9% 17.3% 22.2% 26.9%
15,321,241 10% 2.0% 8.6% 13.9% 18.6% 23.0%
16,714,081 20% -2.0% 5.5% 10.9% 15.5% 19.7%

Avoided cost of energy ($/kWh)

Annual costs 0.0351 0.0395 0.0439 0.0483 0.0527
($) 0.2 -20% -10% 0% 10% 20%
479,257 -20% 9.5% 15.1% 20.2% 24.9% 29.6%
539,164 -10% 7.6% 13.6% 18.7% 23.6% 28.2%
599,071 0% 5.7% 11.9% 17.3% 22.2% 26.9%
658,978 10% 3.5% 10.3% 15.8% 20.8% 25.5%
718,886 20% 1.1% 8.5% 14.3% 19.4% 24.1%

Debt ratio (%)

Debt interest rate 60.0% 67.5% 75.0% 82.5% 90.0%
(%) 0.2 -20% -10% 0% 10% 20%
6.4% -20% 13.4% 15.6% 19.4% 27.5% 66.2%
7.2% -10% 12.9% 14.9% 18.4% 25.7% 60.5%
8.0% 0% 12.3% 14.2% 17.3% 23.9% 54.5%
8.8% 10% 11.7% 13.4% 16.1% 22.0% 48.2%
9.6% 20% 11.1% 12.5% 14.9% 19.9% 41.8%

Debt term (yr)

Debt interest rate 16.0 18.0 20.0 N/A N/A
(%) 0.2 -20% -10% 0% 10% 20%
6.4% -20% 15.8% 17.6% 19.4% 21.2% 22.6%
7.2% -10% 15.0% 16.7% 18.4% 20.2% 21.6%
8.0% 0% 14.1% 15.7% 17.3% 19.1% 20.5%
8.8% 10% 13.2% 14.6% 16.1% 18.0% 19.4%
9.6% 20% 12.3% 13.6% 14.9% 16.8% 18.2%

Version 3.0 © Minister of Natural Resources Canada 1997 - 2004. NRCan/CETC - Varennes

05/08/2004; HYDRO01-B.xls
 ®
RETScreen Sensitivity and Risk Analysis - Small Hydro Project

Risk Analysis for After-tax IRR and ROI

Parameter Unit Value Range (+/-) Minimum Maximum

Avoided cost of energy $/kWh 0.0439 15% 0.0373 0.0505
RE delivered MWh 45,487 15% 38,664 52,310
Initial costs $ 13,928,401 20% 11,142,721 16,714,081
Annual costs $ 599,071 15% 509,211 688,932
Debt ratio % 75.0% 0% 75.0% 75.0%
Debt interest rate % 8.0% 30% 5.6% 10.4%
Debt term yr 20 0% 20 20

Impact on After-tax IRR and ROI

Avoided cost of energy

RE delivered

Sorted by the impact

Initial costs

Debt interest rate

Annual costs

Debt ratio

Debt term

-0.600 -0.400 -0.200 0.000 0.200 0.400 0.600

Effect of increasing the value of the parameter

Median % 16.8%
Level of risk % 10%
Minimum within level of confidence % 8.5%
Maximum within level of confidence % 24.5%

Distribution of After-tax IRR and ROI

14%

12%

10%
Frequency

8%

6%

4%

2%

0%
1.2% 2.7% 4.3% 5.9% 7.4% 9.0% 10.5% 12.1% 13.7% 15.2% 16.8% 18.4% 19.9% 21.5% 23.1% 24.6% 26.2% 27.8% 29.3% 30.9%
After-tax IRR and ROI (%)

0.0% of cases have an after-tax IRR and ROI not defined.

Minimum Median Maximum

5.0% Level of confidence = 90% 5.0%
8.5% 16.8% 24.5%

Version 3.0 © Minister of Natural Resources Canada 1997 - 2004. NRCan/CETC - Varennes

05/08/2004; HYDRO01-B.xls
 TEACHER’S NOTES SMALL HYDRO PROJECT

01 INDEPENDENT POWER PRODUCTION / BRITISH COLUMBIA, CANADA

• Although the nearest grid connection was a 69 kV line, the developer chose to run a 13.8 kV line to the grid and then raise the
voltage at the point of interconnection. The low estimate of substation and transformer costs using the “Formula Costing
Method” is due in part to this. The cost of the transmission line is high because a 1.5 km submarine cable was used. This, in
turn, affects the annual transmission line maintenance expenditure.
• In the formula costing method, RETScreen suggests that this project be classified as a “mini” project but “small” has been used
instead as the “small” classification was more appropriate.
• It is likely that the generator used in this project will need to be rebuilt every 5 to 10 years. Estimating the cost of this rebuild is
difficult, however. RETScreen can be used to investigate the effect of this periodic cost on the project’s financial viability. For
example, a $1,500,000 generator rebuild (i.e., a rebuild costing fully one-half as much as the total initial renewable energy
equipment bill) every 7 years would diminish the internal rate of return by roughly 5 percentage points, to about 13%.
• The estimate of the initial costs produced by the RETScreen formula costing method has been adjusted to more accurately
reflect the real costs for this particular project. While the formula’s estimate of costs broken down by item are less accurate, in
the aggregate the estimate is quite reasonable: the overall costs are estimated by the formula method to within 7% of the
adjusted estimate of $13,928,401, which reflect the real costs of the project.