Customer is Concerned with Cost of Upgrade from POCO......

dionysius

Senior Member
Location
WA
The group I work for is looking to bid for an existing customer. His existing service is 480Y/277V 400A.

He is proposing to triple the service to 1200A.

POCO is asking for $42,000 for performing service upgrade. It requires them installing a primary pole and a transformer. They will not allow him to supply the trafo. Neither will they leave the existing 400A service as is and just add a new strike to his building which would mean an 800A add on.

His comment is that either of the above two options would save him money.

His ONLY option now is pay POCO $42,000 and then install new switchgear, another $15,000.

His question is does all of this seem reasonable or are they picking on him?? He is seeing it as having to pay $57,000 just for the privilege to pay huge electricity bills in the future. He expressed the sentiment that he should get the service equipment and trafo for very low to no cost since it will make him a valuable customer.

Does he have a valid point here or not?? I told him as far as I have seen this is the way all customers are treated. I did mention that a second strike for the 800A is worth investigating further but I could not express an opinion since I do not know why they have such a rule.

Any comments welcome on this one. I do feel for the person. What can he do to strike a better deal from POCO or is he pushing a rock up a hill. They will not negotiate he says. It is take it or leave it.
 

Dennis Alwon

Moderator
Staff member
Location
Chapel Hill, NC
Occupation
Electrical Contractor
Good Luck-- he can try talking with an engineer and see if they can work something out but the power company usually gets what it wants
 

Iron_Ben

Senior Member
Location
Lancaster, PA
Good Luck-- he can try talking with an engineer and see if they can work something out but the power company usually gets what it wants
I agree with this. It's not unreasonable to go over the service coordinator's or engineer's head. In a nice way, you might ask for a meeting with the guy's/gal's supervisor.

Another option is a contract. You and the customer are promising all this load and these high dollar bills that will be such a benefit to the POCO. Well, maybe things will go that way and maybe not. From the POCO's perspective they are being asked to make a significant capital investment for some (hopeful) future load. What if your customer's anticipated orders don't materialize? One way around this uncertainty is for the customer to contract with the POCO for a certain minimum load (demand, not kWh). In a case like this, if the customer agrees to a 2 year contract with a minimum demand of - say - 200 kW every month, the $47,000 charge would likely be greatly reduced or possibly eliminated. The customer is then putting his money where his mouth is. When I worked for the POCO we did this from time to time. Depending on the many variables involved, it can be the proverbial "win/win", where both parties walk away happy.
 

petersonra

Senior Member
Location
Northern illinois
Occupation
engineer
most times the tariffs for public utilities are set by the state and the POCO does not have a lot of options as far as cost goes. The new paradigm is that if you add cost to the system, you have to play for it in some way.

there may be other equipment options available other than the ones your customer wants or what the POCO has offered, but you will either have to dig into the POCO's offerings or find someone who knows what is actually available to talk with. as often as not though, most utilities have reduced the options to as few choices as they can to get more commonality in spares and installations.

personally, I think a guy who needs to upgrade from a 400A service to a 1200A service can probably afford to pay for it.

BTW, why does he need to get new switchgear? can't he reuse the old stuff and just add new switchgear for the new loads?

One other thing, are you sure the only thing the POCO has to do is set a new pole and xfmr? Given the increase in load, they might have to string new wires.
 

fmtjfw

Senior Member
What about taking the new service at primary voltage and supplying your own transformer? That should move the capital cost from the POCO to the customer and maybe even get a lower KWH rate?
 

gadfly56

Senior Member
Location
New Jersey
Occupation
Professional Engineer, Fire & Life Safety
What about taking the new service at primary voltage and supplying your own transformer? That should move the capital cost from the POCO to the customer and maybe even get a lower KWH rate?
The OP states that the POCO will not allow the customer to supply his own transformer.
 

dionysius

Senior Member
Location
WA
The customer could buy a remanufactured transformer for $12,000. And it would be his. POCO says no, he must buy from them.

The POCO actually owns the trafo mentioned above for the $42000.

How can all that be fair. It is not a free market.
 

fmtjfw

Senior Member
The customer could buy a remanufactured transformer for $12,000. And it would be his. POCO says no, he must buy from them.

The POCO actually owns the trafo mentioned above for the $42000.

How can all that be fair. It is not a free market.
Of course, it is not a free market -- it is a publicly regulated utility.

For the last time -- ask them about taking the service at primary voltage. Or ask to see their tariff about primary voltage services.
If they stonewall you, contact the Public Utilities Commission (or equiv. for WA).
 

mgookin

Senior Member
Location
Fort Myers, FL
I got involved in one of these. Client was building a midrise office building (5 stories) circa 2007. As they were clearing the land they found POCO poles. They called POCO and said "get your poles off my property; you have no easement." Big dispute erupted. They continued working with the building under the power lines and even with a power pole in the footprint of the building.

Long story short, even though POCO had no easement, which they admit, client had to pay not only to relocate all this infrastructure, which didn't even serve his property, but because there is a Level 1 trauma center 3 blocks away he had to pay to harden the infrastructure. It was close to $100k for work that did not even provide service to his project. He had to eat it. Similar stories around here with a church at $300,000 and other projects too.

POCO is what it is and it's not going to change on a one-project basis.

Moral of the story is POCO work is part of the diligence required before committing to a job. Everyone knows what the roofer is going to charge but not many think to get with POCO construction and get that quote.

Good luck with the project.
 

petersonra

Senior Member
Location
Northern illinois
Occupation
engineer
Yes, but I'll bet there is a tariff for primary voltage services. It all depends on how you ask the question.
1) Can I supply the transformer? NO!
2) Can I have a service at 12,470V? YES!
You really think they are going to provide a service like this at primary voltage? I would bet there is a minimum load required before one can get such a thing, and I would bet it exceeds this relatively piddly load.
 

fmtjfw

Senior Member
You really think they are going to provide a service like this at primary voltage? I would bet there is a minimum load required before one can get such a thing, and I would bet it exceeds this relatively piddly load.
Don't know, haven't read their tariffs. Don't know which POCO. I do know that TELCOs and POCOs are willing to do what their tariffs say. Tariffs say all sorts of things.

I do know I got a primary service under tariff here in West by-god Virginia for a 25KVA single phase transformer with an absolutely piddling load. The (secondary) meter charge was about the same as the energy charge. They even ran a single span of primary from their existing pole to our line.

Also the school system here has a 3Ph primary service to a campus with about 2500 to 3500KVA transformers capacity.

I also know of single-family dwellings with transformer vaults in the basement and primary services. I guess it is all up to the POCO/PUC.
 

petersonra

Senior Member
Location
Northern illinois
Occupation
engineer
D
I also know of single-family dwellings with transformer vaults in the basement and primary services. I guess it is all up to the POCO/PUC.
I have never heard of a single family dwelling around here that had anything other than 120/240 or 208/120. But, I am not all that keyed into such things. I am surprised the POCO or the building code would even allow it.
 

fmtjfw

Senior Member
I have never heard of a single family dwelling around here that had anything other than 120/240 or 208/120. But, I am not all that keyed into such things. I am surprised the POCO or the building code would even allow it.
Of course, it helped that the homeowner was also the president of the POCO. 5kV cable, little brick vault. probably a pole pot with Askeral. I've seen the drawings.
 

gadfly56

Senior Member
Location
New Jersey
Occupation
Professional Engineer, Fire & Life Safety
Of course, it helped that the homeowner was also the president of the POCO. 5kV cable, little brick vault. probably a pole pot with Askeral. I've seen the drawings.
I think that lawyers call that "special pleading". If you can point to another example without a connection to the POCO you'll have a stronger case.
 

dionysius

Senior Member
Location
WA
Of course, it is not a free market -- it is a publicly regulated utility.

For the last time -- ask them about taking the service at primary voltage. Or ask to see their tariff about primary voltage services.
If they stonewall you, contact the Public Utilities Commission (or equiv. for WA).
I did ask him re your question and the response he got from POCO went like this:

"If customer wants to supply his own transformer here is the rule. We POCO will set a new primary power pole in line with our existing overhead primary and will install primary metering. The customer must install a gang switch and primary riser to his own transformer out of his own pocket. The approximate POCO cost for this option is $22,500"

That $22,500 plus lets say $15k for a reman trafo plus a few thou for the gang switch and riser install takes him back up to the other quote. The old expression "hobson's choice" is descriptive. Obviously it is the same as saying you are going to pay even more if you try to supply your own. So there!!! And with his own trafo he is totally without any support if it goes bad.
 

cdslotz

Senior Member
He is seeing it as having to pay $57,000 just for the privilege to pay huge electricity bills in the future.
Not the case anymore....the POCO builds the infrastructure and is paid up front. They are also paid a percentage of the utility bills to maintain the infrastructure.
But the customer can buy electricity through any provider. Since deregulation, there is no more cost offsets for construction vs revenue...

at least that's how it is in my neck of the woods
 

dionysius

Senior Member
Location
WA
Not the case anymore....the POCO builds the infrastructure and is paid up front. They are also paid a percentage of the utility bills to maintain the infrastructure.
But the customer can buy electricity through any provider. Since deregulation, there is no more cost offsets for construction vs revenue...

at least that's how it is in my neck of the woods
I am unaware of more than one provider in every place I have been. Are you saying that there are competing POCOs in some regions???
 

kwired

Electron manager
Location
NE Nebraska
I am unaware of more than one provider in every place I have been. Are you saying that there are competing POCOs in some regions???
There is only one utility company that installs and maintains the lines, but you have a choice of several companies that you may purchase energy from. You may periodically have to make a declaration of which company you wish to purchase energy from for the next period. This is not happening where I live as the entire state is still served by publicly owned electric utilities, but natural gas has been that way for some time now. There is only one company in a locality that operates and maintains the pipelines, but you get to choose your energy supplier. Telephone has changed over the years, but I believe with true land lines is still similar as well. You have a single local company operating and maintaining the local system, but you do get to choose long distance carriers.
 

brantmacga

Senior Member
Location
Georgia
Occupation
Electrical contractor
I am unaware of more than one provider in every place I have been. Are you saying that there are competing POCOs in some regions???
It happens here in limited places, usually at the edge of city limits.

My first house had the option for two utilities as I was at the end of both an REA line and a municipal utility line. I went the the co-op and my neighbors had the city utility.

I'm working on a project right now that has both REA and GA power on the property, and the owner has a choice.


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