This setting applies specifically to the calculation of overlapping deratings. This setting causes all overlapping derating to be calculated as shown in Example 3D in the NERC GADS Data Reporting Instructions in Appendix G.
The calculations deal with overlapping deratings when the first derating ends before the second derating, but the capacity of the unit does not change. The assumption is that the derating "C" in Example 3D is not created by the GADS reporter. It is also assumed that the capacity of the unit stayed at the same net available capacity as the derating "B" until the traveling screen (cause code 3260) repair is completed.
In looking at Example 3D, the unit net available capacity is assumed to continue to be 360 MW from March 10 at 7:45 (the start of the "B" derating) through March 10 at 19:00 (the end of the "C" derating).
Therefore, the software, with the option set, calculates the "C" portion as if the unit capacity stayed at the same available capacity as the derating "B" (i.e., a 240 MW derating for 8.50 hours, which results in 3.40 equivalent hours). As a result, the total "B" equivalent hours are now 4.04 equivalent hours.
Before selecting this option, ensure that this is the manner in which your company assumes overlapping deratings are calculated under these circumstances.