Negotiating better electricity cost with provider

[squirm]

Hello,
I have question that I really couldn't even remotely try and guess the answer too.

I work for a large facility that uses a lot of power in relationship to other neighboring facilities. Our voltage feeds into our plant are 69Kv. Since the financial crises, etc our budget had been hit pretty hard. We've been trying to reduce cost, but one thing I really do not know (and haven't heard of) is negotiating better electrical rates with our power provider. Is this even feasible? If it is, I was thinking that such a negotiating team would be contracted out, as we're not in the bargaining business and would rather leave it to the pro's if there is such a thing.

If it is possible, where to even start? I've heard other entities grouping together like an aggregation and negotiating better contracts with their power provider, but not sure if it's dependant on local government regulations, etc.

Has anyone attempted this before? (I wasn't sure which forum to post this in, the contracting forum seemed the most logical)

Thanks!!

 

[satcom]

Hello,
I have question that I really couldn't even remotely try and guess the answer too.

I work for a large facility that uses a lot of power in relationship to other neighboring facilities. Our voltage feeds into our plant are 69Kv. Since the financial crises, etc our budget had been hit pretty hard. We've been trying to reduce cost, but one thing I really do not know (and haven't heard of) is negotiating better electrical rates with our power provider. Is this even feasible? If it is, I was thinking that such a negotiating team would be contracted out, as we're not in the bargaining business and would rather leave it to the pro's if there is such a thing.

If it is possible, where to even start? I've heard other entities grouping together like an aggregation and negotiating better contracts with their power provider, but not sure if it's dependant on local government regulations, etc.

Has anyone attempted this before? (I wasn't sure which forum to post this in, the contracting forum seemed the most logical)

Thanks!!

Yes there are Pro's and if you think your paying a lot now, just get involved with these sweet talking energy groups, you will most likely be paying more then your neighbor facilities, when you get into one of their iron bound no way out energy contracts, our town resells power, and left the area utility supplier and entered one of these contracts, now we are paying twice the rates of any surrounding towns, don't forget the big energy scams a few years back, they lied about the numbers and suckered in even the brightest and largest companies.

 

[LarryFine]

. . . negotiating better electrical rates with our power provider. Is this even feasible?

What's in it for the POCO? What do they have to lose if you don't like their answer? Most POCO's don't have competition.

 

[One-eyed Jack]

Yes there are Pro's and if you think your paying a lot now, just get involved with these sweet talking energy groups, you will most likely be paying more then your neighbor facilities, when you get into one of their iron bound no way out energy contracts, our town resells power, and left the area utility supplier and entered one of these contracts, now we are paying twice the rates of any surrounding towns, don't forget the big energy scams a few years back, they lied about the numbers and suckered in even the brightest and largest companies.

I can relate to that. Our town jumped into a deal 20 or so years ago and it must have been a lifetime contract and we are still paying for it.

 

[don_resqcapt19]

What's in it for the POCO? What do they have to lose if you don't like their answer? Most POCO's don't have competition.

Actually they do have competion. In many cases, the local power company only transports the power to large customers. You are free to purchase the energy from other suppliers. You pay a distribution charge to the local utility and the energy use charge to your energy supplier. The same is often true of natural gas.

 

[One-eyed Jack]

Actually they do have competion. In many cases, the local power company only transports the power to large customers. You are free to purchase the energy from other suppliers. You pay a distribution charge to the local utility and the energy use charge to your energy supplier. The same is often true of natural gas.

Yeah,but it is not often that you add a link to a chain and it gets shorter.

 

[hockeyoligist2]

Do you have generators? You may be able to get in to a load sharing program with a lower rate. Do you have a byproduct that could be used to produce power?

We are gearing up to power generators off of methane and water powered turbines. Since they are "green" power supplies with carbon credits we will be selling the power back to the utility for a higher price than we pay for theirs.

 

[bpk]

How is power billed, through a contract with peak demand figured in? If so is it possible to lower your usage when demand is high to use as a bargaining tool? I worked at a plant that did something similar to that

 

[don_resqcapt19]

Yeah,but it is not often that you add a link to a chain and it gets shorter.

Around here it does because for some reason the two major utilities in Illinois have intentionally priced themselves out of the large customer market. The will sell power to the large customers, but the customer would have to have a lot of excess cash that they want to get rid of. Their price for large customers is higher than what they charge their residential customers.

 

[wawireguy]

It cannot hurt for a company like that to talk to the power company and see if there is any negotiating rates. My gut feeling is that they won't get anywhere but you never know.

 

[One-eyed Jack]

[quot Their price for large customers is higher than what they charge their residential customers.[/quote]

The exact opposite here. Wish I could get some .08kwh stuff.

 

[kwired]

your best option is probably reducing energy use where and if you can, reduce peak demand charges, and power factor penalties if you have them, and installing more energy efficient equipment or variable speed drives on things that can be slowed down such as fans and pumps if the driven machine of these can accept that.

Occupancy sensors, timers or photocells or even dimming on lighting will also save energy.

Heat pumps, heat reclaimers, building insulation, doors and windows can all effect heating and cooling costs.

All of these things require an investment up front and the payback period should also be considered.

Good preventative maintenance can also save some energy.

As mentioned what is in it for POCO. You may be able to get lower rate but may have to give something up for it like a limit on peak demand or peak demand at specified time of day, month or year or requirement to install power factor correction if you don't have any.

 

[djohns6]

your best option is probably reducing energy use where and if you can, reduce peak demand charges, and power factor penalties if you have them, and installing more energy efficient equipment or variable speed drives on things that can be slowed down such as fans and pumps if the driven machine of these can accept that.

Occupancy sensors, timers or photocells or even dimming on lighting will also save energy.

Heat pumps, heat reclaimers, building insulation, doors and windows can all effect heating and cooling costs.

All of these things require an investment up front and the payback period should also be considered.

Good preventative maintenance can also save some energy.

As mentioned what is in it for POCO. You may be able to get lower rate but may have to give something up for it like a limit on peak demand or peak demand at specified time of day, month or year or requirement to install power factor correction if you don't have any.

A very sensible post .

 

[iwire]

A very sensible post .

I agree, kwired's post makes a lot of sense.

 

[LarryFine]

A very sensible post .

I agree, kwired's post makes a lot of sense.

Isn't that against the forum rules?

 

[GUNNING]

You reduce my rates or Ill put in my own generator!

You reduce my rates or Ill put in my own generator!

I know for a fact the utility gives sweetheart deals to large local users of power. Call there meter shop and ask. They can steer you in the right direction. Here in Florida I ran across a utilities meter from across the state at a mall. You can negotiate.

Maintenance is a very good idea also. I found I had a dead exhaust fan in my attic. It happens to the best of us. I didn't start looking till the electric bill started going up, though. You might want to start looking around. Documenting. Inspecting. Micromanaging. Educating.

 

[cowboyjwc]

I would go along with what kwire said. I was a plant electrician for years and we were having the same problems. We went through the plant and built some of our own lighting contactor panels and put in astonomical time clocks and a number of other things. A year later we got an award from the POCO, because we had cut our monthly electic bills by $13,000.

I'll bet we didn't even spend $13,000 on everything we did. Even if we spent double that, getting your pay back in two months is almost unheard of.

 

[mtfallsmikey]

Maybe I'm blessed.....tenant pays all electric, no worries about Energy Star or LEED bullcrap, burn up those KWH's....
That's why the POCO is building a new 500kv line to serve Silicon Valley East...

 

[zog]

Hello,
I have question that I really couldn't even remotely try and guess the answer too.

I work for a large facility that uses a lot of power in relationship to other neighboring facilities. Our voltage feeds into our plant are 69Kv. Since the financial crises, etc our budget had been hit pretty hard. We've been trying to reduce cost, but one thing I really do not know (and haven't heard of) is negotiating better electrical rates with our power provider. Is this even feasible? If it is, I was thinking that such a negotiating team would be contracted out, as we're not in the bargaining business and would rather leave it to the pro's if there is such a thing.

If it is possible, where to even start? I've heard other entities grouping together like an aggregation and negotiating better contracts with their power provider, but not sure if it's dependant on local government regulations, etc.

Has anyone attempted this before? (I wasn't sure which forum to post this in, the contracting forum seemed the most logical)

Thanks!!

Lots of good ideas here so far but you have not provided much information for us to give you a good answer. Where are you? What are your rates now? Who is your utility? What is your PF? Are you paying PF penalties? What is your demand? Etc.....