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→Annual Frequency
====== Annual Frequency ======
====== Annual Frequency ======
Sometimes the regulatory text will explicitly state how often stakeholders must conduct a regulatory activity (e.g., "do Activity X twice per year"). In these situations the appropriate frequency to enter in the RCC is usually straightforward.
Other times, the regulatory text may state that an activity must be conducted every time some other event happens (e.g., "do Activity X every time Event Y happens"). An example of the latter is a requirement to report the importation of goods containing a certain chemical: this could happen 1 time, 2 times, or 1,000 times per year. In these situations, the appropriate frequency is not always straightforward.
Note that the stakeholder count must be estimated in every period of the analysis, and costs incurred in every period must be discounted back to the present-value base year. That means that if you have a lot of periods, the RCC will be estimating the stakeholder count many times and doing a lot of sub-annual discounting.
The frequency determines how many analytical periods there are in each year of the analysis, and hence the total amount of periods throughout the analysis. If the annual frequency is 1, then there will be 1 period per year, and 10 total periods over a 10-year timeframe. If you enter an annual frequency of 1,200, then you are telling the RCC that you want to split every single year into 1,200 evenly spaced periods, in which the stakeholder count must be estimated and impacts must be discounted back to the PV base. Is that really what you want to do? With 1,200 evenly spaced periods that means the RCC will estimate the stakeholder count more than 3 times per day. There is nothing mathematically wrong with this, however it is computationally intensive and it may not be necessary.
It is possible to switch the frequency to 1 and multiply the Time Spent by 1,200, or alternatively you could set the frequency to 12 (monthly impact estimation), and multiply the Time Spent by 100.
The most easily understood frequencies are annually, bi-annually, quarterly, monthly, and weekly.
You may also have a frequency less than 1. For instance, maybe stakeholders have to do an activity every other year, or every 3 years. The way the RCC handles these cases depends on the stakeholder growth rate.
If the growth rate of the affected stakeholder group = 0, then there will be gaps in when the stakeholders incur the cost, and every 'n' years the count of stakeholders at the beginning of the analysis will incur the cost (for frequency =
1/n)
If the growth rate is negative, then there will be gaps in when the stakeholders incur the cost, and every 'n' years there will be a smaller and smaller number of stakeholders incurring the cost. In other words the existing stakeholder count will be diminishing over time, and whoever is still in the market will incur the cost every 'n' years (for frequency = 1/n).
If the growth rate is positive, then it is the most complicated. Every year there will be some new entrants, (new 'cohorts'), and each cohort of new entrants will be on its own track of incurring costs every 'n' years (for frequency = 1/n).
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