Add the param declation at the top of ps1 file
test.ps1
param(
# Our preferred encoding
[parameter(Mandatory=$false)]
[ValidateSet("UTF8","Unicode","UTF7","ASCII","UTF32","BigEndianUnicode")]
[string]$Encoding = "UTF8"
)
write ("Encoding : {0}" -f $Encoding)
result
C:\temp> .\test.ps1 -Encoding ASCII
Encoding : ASCII