Avoided Cost

{
  "id": "MLC-T-ENV-002558",
  "term": "Avoided Cost",
  "field": "Environment",
  "definition": "1. The cost a utility would incur to generate the next increment of electric capacity using its own resources; many landfill gas projects' buy back rates are based on avoided costs.\n\n2. The savings associated with undertaking a given activity (such as demand management) instead of an alternative means of achieving the same results (such as adding supply); can be used to establish the least-cost means of achieving a specified goal. Can be measured in terms of incremental cost.",
  "subject": "General environmental",
  "references": [
    "Terms of Environment",
    "Water Conservation Plan Guidelines Glossary; Water Conservation Glossary"
  ],
  "url": "https://mlchart.com/terminology/environment/avoided-cost/"
}