The purpose of this guide is to provide a method of establishing the dollar value of the electric power needed to supply the losses of a transformer or reactor. Users can use this losses evaluation to determine the relative economic benefit of a high-first-cost, low-loss unit versus one with a lower first cost and higher losses. Manufacturers can use the evaluation to optimize the design and provide the most economical unit to bid and manufacture. The evaluated cost of losses also enables a user to compare the offerings of two or more manufacturers to aid in making the best purchase choice among competing transformers or reactors. Loss evaluation also provide information to a user for establishing the optimum time to retire or replace existing units with modern low-loss transformers or reactors.