Emerging Practices for Capital Adequacy © Copyright 2003, CCRO. All rights reserved. 75 VaR scalar – Multiplier used to scale the market risk measurement (at a given confidence and holding period) up to the level that an entity feels is the appropriate amount of economic capital to hold for a business. The scalar can be determined by stress test analysis. Regulators mandate a predetermined scalar in the banking industry. Variable O&M - Nonfuel cost of generating electricity. For combined-cycle plants it usually includes at least some of the required maintenance. Volumetric risk - The risk that actual commodity volumes will vary from expected volumes and result in a potential loss because of changing commodity market prices or simply selling less or buying more than expected. For example, a generating unit sells projected electric generation production forward and at the time of delivery a unit is forced out and cannot deliver. This results in a loss if the price to purchase electricity to cover the sales is higher than the electricity sale price.