3.3　Requirement for Economic Evaluation

3.3.1　Economic evaluation shall be made in strict accordance with applicable national regulations and policies under the guide of long-term national economy plans，industrial plans and urban plans.The economic evaluation of distribution network plan mostly involves financial evaluation.National economy evaluation should be conducted as necessary.

3.3.2　To ensure that the plans for distribution networks are reasonably developed，the economic evaluation shall meet the following requirements:

1　Benefits and costs are evaluated in a consistent scope；

2　Benefits and costs are evaluated using consistent methods；

3　Qualitative and quantitative analysis as well as dynamic and static analysis are combined.

3.3.3　Financial evaluation indicators mainly include financial internal rate of return（FRRR），financial net present value（FNPV），investment payback period，asset-liability ratio，return on investment，profit and tax rate of investment，and capital profit margin.Financial evaluation should be performed in a quantitative and dynamic way.Dynamic analysis is mainly performed using the following methods:FRRR，FNPV，annual cost and dynamic investment payback period.

3.3.4　In financial evaluation，the benefits and costs in two scenarios，with a plan and without a plan，shall be compared.The increment in benefit and cost shall be obtained and benefit indicators shall be analyzed to demonstrate the profitability of the plan.

1　For collection of basic data in the scenario without a plan，changes in indicators（such as stock assets，power demand and operating cost）caused by equipment aging，decommissioning，technical progress or other factors within the concerned period shall be predicted.

2　The major financial indicators for increment in the scenario with a plan shall at first meet the related basic requirements of the nation，industry and the utility company.Secondly，they shall not be inferior to the major financial indicators for stock in the scenario without a plan.

3.3.5　In economic evaluation，electricity price analysis and sensitivity analysis of the plan may be performed as stipulated by the nation's economic evaluation regulations or as required by the client.The analysis of electricity price should be performed following the principles of"reasonable cost，reasonable profit，lawful taxation and fair division of burdens".The sensitivity analysis should include effects caused by change in investment，load increase，demand increase，change in electricity price，and other factors.