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D. EVALUATING COST-ELECTIVENESS lqxample 2 OF THE P&T SYSTEM Hypothetical Annual Costs for P&T O&M An evaluation of system cost-effectiveness should Annual %of Total consider life-cycle costs because life-cycle costs Category Cost Annual Cost account for up-front capital expenditures, annual costs, Labor 39% the time frame for system O&M, and costs for PM&reporting $30,000 replacing or updating the system. For example,by O&M operator $49,200 considering life-cycle costs, a site manager can better sampling labor $28,800 evaluate if up-front expenditures for more efficient equipment or for making modifications will result in Utilities 23.5% overall savings to the project. Because it may be electricity $54,000 difficult to calculate life-cycle costs due to the . gas $9,600 uncertainty of a remedy time frame,best estimates public water N/A should be used. Depending on the organization phones $2,400 funding the remedy, life-cycle costs may need to be Materials 16% expressed in net present value,which considers the GAC $12,000 effects of inflation and the rate of investment returns on chemicals $30,000 future expenditures. Most commonly used spreadsheet filters $2,400 software applications can calculate net present value Chemical analysis $36,000 13% when provided with a remedy time frame, adjustment or discount rate, and system costs. Disposal costs $24,000 8.5% Identify Significant Cost Items Total $278,400 100% For an operating system, generally the first step in evaluating the cost-effectiveness of a P&T system is to identify the significant cost items. A table of average annual costs, similar to the one presented in Example 2, components, such as clarifiers in metals removal should be developed for the site based on previous systems, may require cleaning to effectively reduce invoices and/or contracts. Using annual rather than solids in the process water. However, a cost-benefit monthly costs will account for costs that vary monthly analysis should be conducted and discharge or that are incurred on a quarterly, amoral, or irregular requirements should be considered to determine the basis. The areas of highest costs will likely be the appropriate frequency for maintenance and cleaning areas where the greatest savings can be realized. for a P&T system. Site managers should keep in mind that reducing Modify Inefficient System Components annual costs may require capital expenditures and that cost-effective modifications are those that result in Modifying inefficient system components can yield overall savings to the project. Typically, a site significant savings, especially in the use of utilities manager should expect the savings in annual costs and materials. Four common examples of inefficient expressed in net present value to pay for the capital system components are described below. expenditures in less than 5 years, though the acceptable time frame for payoff is highly dependent on the Oversized Motors expected duration of the remedy. Pumps, blowers, air compressors, and other equipment Maintain and Clean Equipment as Appropriate have motors that have different power requirements, measured in horsepower(hp), depending on the Proper maintenance of system components can help amount of air or water they must move and against maximize the efficiency of the treatment plant. All what head they must move it. In many cases, system components should be maintained and cleaned oversized motors are being used and the valves are as needed, especially if biological or chemical fouling throttled back to reduce the flow. However, this is a concern. Even relatively passive treatment approach does not reduce power usage and may also decrease the motor's life span. 12