As part of the VFM analysis, the Work Team shall include the cost of energy that reflects the opportunity cost of producing energy and other utilities. The Work Team shall consult with NCP to arrive at an estimate of the unit cost of energy and utilities to be used for the purposes of this adjustment. This adjustment shall be made where the costs of energy and utilities are subsidized. In the event that this is not the case and that costs are similar to those that would be incurred by the private partner, then no adjustment is required.
The main reasons for this adjustment, is to create a fair comparison across the options, given costs of energy and utilities are subsidized for government entities.