Should a Lower Discount Rate Be Used for Evaluating a Tolling Agreement than Used for a Renewable Energy Contract?

Should a lower discount rate be used for evaluating a tolling agreement than used for a renewable energy contract? The California Energy Commission seems to think so. An analysis suggests that a risk-adjusted discount rate is inappropriate. A correct approach should quantify the effect of risk on a contractʹs financial performance, thereby providing useful information for decision-making.