A method for distribution transformer loss evaluation was derived. The total levelized annual cost method was used and was extended to account properly for conditions of energy cost inflation, peak load growth, and transformer changeout during the evaluation period. The loss costs included were the no-load and load power losses, no-load and load reactive losses, and the energy cost of regulation. The demand and energy components of loss costs were treated separately to account correctly for the diversity of load losses and energy cost inflation. An analysis was performed to find what level of transformer loss yields the minimum total levelized annual cost for a given kVA rating and a given set of load and cost parameters. Initial transformer costs as a function of no-load loss, load loss, and kVA were generated and used in the evaluation. Both single and multiple efficiency designs were considered. The total levelized annual costs of the two designs were compared. In each case the multiple efficiency design was less costly. A sensitivity analysis was performed to find the change in total levelized annual cost due to changes in the input parameters. Also, an analysis was conducted to determine the amount of energy required to …