Document B5vONo3djnL1N3wv5gqnXQgX8

810 ! CHAPTER 44 1948 Guide' Interest The interest chargeable may not represent the existing money rates. It may include an item to cover the diversion of capital or other items depending on existing tax laws which may make it necessary to charge interest due to diversion of capital as a cost item. It should be noted that interest may be based on an unamortized balance. As an example, a 15 year amortization period with a 4 per cent interest rate will approxi mate a 2.1 per cent average annual interest rate. Table 6. Owning and Operating Cost First Cost Cost of mechanical system-- Other costs------------------------- First Cost (FC)--Total. Annual Fixed Charges Amortization--Depreciation period Y years------------------ Interest rate 1%------------- :-- Amortization and Deprecia tion FC _ Y "-------------------------- Y -I- 1 Interest: -- X I =---- Taxes___ ,----------------- ----------Insurance_____________ :------Rent_______________________ Annual Fixed Charges: (Total)---------------------- Annual Maintenance Costs Lubricating oil and grease.----Painting for corrosion pro tection or other purposes-- Replacement of worn parts.-- Refrigerant Wages of engineer or operator Annual Maintenance Cost-- TOTAL---------- :-------------- Antojal Service Cost Electric Power Costs Fans.------------------------------Pumps--Chilled -water---- Pumps--Condenser water.. Pumps--Well water-------- , Cooling, tower fans._______ Cooling tower pumps------ Refrigeration machines.----Miscellaneous or other------ Gas___________,---------:--:-----Coal_________________ Oil--for boilers or Diesel engines___ L_:---------------Steam For direct heating-- For Ventilation--preheat ers........ ................... ...---- For Ventilation--reheaters For Turbine driven equip-" ment.________________ -- For Engine driven equip ment Sewers Charges for discharging well water into public drainage systems_______ Annual Service Costs-^ TOTAL.-a,,;.v____ :------ Summary Annual Fixed ChargesAnnual Service Costs.. Annual Maintenance* Costs Annual Owning and Oper ating Costs--TOTAL.----- Insurance The rate for insurance may vary considerably depending on the type of structure in which the equipment is located and upon other governing factors. A rate of about $0:60 per $1,000 may be considered as being representative for normal installations. * Rent : If the equipment under consideration is to be located in rented or leased quarters it may be necessary to include an item, for space rental. Owning and Operating Costs 811, An orderly arrangement of the various components of owning and operating costs, which will also serve as a check list to forestall inad vertent omissions, is illustrated in Table 6. The formulae for computing amortization and interest are given in the table. Interest should be. computed on the undepreciated portion of investment only. MAINTENANCE COSTS Maintenance costs include replacement parts and the labor, required for making repairs, replacing parts, cleaning, painting, etc. It should be noted that major overhauling or complete replacement may restore the capital value of certain items of equipment, and in such cases the costs incurred may not necessarily be charged as maintenance costs. Generally, routine labor requirements will be the function of an operating engineer or staff and the* responsibility of this group may extend beyond the equipment being discussed here; hence, it is important to include only an equitable share of the time of this group. Extraordinary repairs involving special machinery will usually be covered by contract with equipment service divisions and should be accounted for on that basis. Many of the items included in maintenance costs are highly variable and depend on the type and quality of the purchased equipment. For large air conditioning installations, using high quality equipment, some approximate costs per tort are given in Table 7. In addition to the costs listed in Table 7, consideration should possibly be given to other items such as: water treatment for boilers; other boiler and heating plant cleaning and repairs; repair and replacement of heating plant valves, traps, and vents; water treatment for cooling: tower or chilled spray water; drive belts, possible damage due to freezing weather; cleaning of air ducts; and repairs to insulation. SERVICE COSTS Service costs include the costs for power, water, steam, coal, oil, etc., consumed to operate the system. From the selected equipment and type of installation, it is possible to segregate the relatively constant power loads and the total brake horse power. Annual power cost can then be figured from the following formula: where Annual power cost = 0-746 (bhp) g R o bhp = Brake Horsepower. H = Annual operating hours. R = Power rate, dollars per/kwhr. i) = Motor efficiency (decimal). ' In using Equation 1, it must be pointed out that the electric rate, R must reflect the proper combination of energy and demand rates. These vary widely between the utility companies, and sometimes the rate structure is such that it . is largely the demand charge which determines the proper value of R to use in EquationT. Refrigerating Equipment Operating Cost In an air conditioning system, the refrigerating equipment is usually the largest power-consuming item to be considered. Also, the prediction