Abstract In the electric power system planning process, engineers seek to identify the most cost-effective means of serving the load within reliability and power quality criteria. In order to accurately assess the cost of a given project, the feeder losses must be calculated. In the past, it was necessary to estimate the feeder losses based upon the peak load and a calculated load factor for the year. The cost of these losses would then be calculated based upon an expected, fixed per-kWh generation cost. This paper presents a more accurate means of calculating the cost of losses, using hourly feeder load information and time-varying electric energy cost data. This paper attempts to quantify the improvement in accuracy and presents an example where the economic evaluation of a planning project requires the more accurate loss calculation.