Fig. 4.11 Cost and Performance Evaluation Framework 4.2.2 Uncertainty in Capital Cost Ranges for SPS and Alternatives Capital costs of technologies that have not yet been developed are highly uncertain and depend in part on the commitment made to, and the results of, future R&D efforts. At this time the estimated ranges of capital costs for the SPS and the other advanced technologies are large. Significant uncertainties also exist in the projected cost of energy from current or conventional technologies. Capital costs for electric generation technologies to commence operation in the year 2000 are highly uncertain. Accurate projections of costs in that era, even for technologies that are in commercial operation today, are still difficult. Consideration of factors that contribute to the range of estimated costs is necessary for a valid pairwise comparison of technologies, and these factors have been included in the following analysis and assessment. There are many parameters that could be factored into the estimation of capital cost uncertainty, but we have chosen to aggregate the capital cost uncertainty into the following three factors that we feel represent the major uncertainties: 1. Uncertainty about future costs of materials, supplies, and labor necessary to construct power plant facilities; 2. Uncertainty about the future requirements and associated costs of environmental and safety equipment; and 3. Uncertainty about the capability of technologies to perform as conceptualized. The uncertainty associated with factor 1 was generally accounted for through an analysis of the Handy-Whitman Index^ of public utility construction costs, which is widely used as a "benchmark” index by the electric
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