demand charges

[tw/nci]

My question is 2 part
1) What constitutes demand charges on a commercial/industrial customers electrical bill. I know that the customer has exceeded a pre-determined level or spike at a certain period in time. How do I find out where that threshold is? Also how does poor power factor play into demand charges?
2) What do we typically do to address these issues? (power factor capacitors, demand limiting, rolling load shedding)
Thanks for your help

 

[mdshunk]

The rules vary from power company to power company, so your best information will come from your PoCo's specific website. I think you'll find that most demand charges are based on the kilowatt hour usage during the highest 15 minute period in each billing cycle. What you do to address this depends wholly on what sort of occupancy it is. Stagger starting AC and heat pumps with some sort of intelligent system (could be timers) in an office building, for instance, could go a long way. In other occupancies, there isn't a blessed thing you can do (or want to do) about it. A factory, for instance.

 

[charlie]

. . . you'll find that most demand charges are based on the kilowatt hour usage during the highest 15 minute period in each billing cycle. . .

I agree Marc. Other things you can do (in addition to Marc's suggestions):

• Correcting power factor will go a long way towards cutting costs, especially if they have a poor power factor to start with.
• Prioritize all of the loads in the plant and determine how high the peak demand may be. Then set up a load shaving plan to turn off load as the demand increases. For instance, in a large plant, can every other luminaire be turned off? Can the AC or part of the AC be turned off for a while? Are there machines that may be safely turned off if no work is being performed (like a computer shutting the screen off after non-use).
• Can a 2nd or 3rd shift be added to take load off the 1st shift?
• Can the lighting be changed to high efficiency high bay type?
• Can high efficiency lighting with electronic ballasts be used in place of the old style ballasts if that has not already been done?

Normally, the peak demand will stay on the bill for one year and it is a rolling year. The reason for a demand charge is that the serving power company must provide the capacity to serve the load whether it is used or not. If the load was there, the capacity must also be there.

In my opinion, you should be seeking the advice of a load management consulting company to take a look at the facility and make recommendations. You will get the work of doing what the company suggests.

 

[bphgravity]

Check for "short-cycling" appliances such as soda machines, water coolers, etc. You would be amazed what havoc a compressor going bad can have on demand metering.

 

[mdshunk]

Check for "short-cycling" appliances such as soda machines, water coolers, etc. You would be amazed what havoc a compressor going bad can have on demand metering.

I use a specialist subcontractor from Philadelphia that helps customers pin down exactly what's causing high demand charges. In large buildings, or multi building properties on one big CT service, this can take a while. I know he's spent weeks at a single customer's property already. Not only do I mark up his services a little bit (not much, really), but it always generates a pretty big laundry list of recommendations for the customer that I get some work out of. HVAC issues almost always top the list in office buildings and retail buildings.

 

[cadpoint]

Charlie,
Is your POCO responsive to any corrective measures taken if this process that is done by a client ?

Can the client come to your company and say, hey we tightened up, we want a different multiplier three-six months done the line, is this the simplest aspect of a "rolling year" ? It'd seem a cost study would need to be back several years to qualify less power consumed from this day forward.

Granted they might never touch their peak demand again after measures have been done, and in the future they might re-touch it.

I know its a double edge sword, green is hip, etc., etc., Isn't it just that the POCO with have less to read from a meter and apply their multiplier too, once these corrective measures are taken?

 

[charlie]

Sorry

Sorry

. . . Is your POCO responsive to any corrective measures taken if this process that is done by a client? . .

Sorry, the public service commission in your area (the IURC in Indiana) controls the tariff. We would not be able to work a deal like that without a rate case and, I doubt, your electric utility would be able too either unless all the restrictions have been lifted. :smile:

 

[ZZZ]

Here is what our contract looks like. Sorry for the long post. Don't confuse the power factor adjustment with a demand charge. We have maintain a unity fower factor or they really charge us. We installed automatic pf correction capacitor banks. I think you are talking about billing demand, but there are several types. We do load shedding to avoid exceeding the existing highest demand we set a few years ago when we had to transfer all our buildings onto a single feed during a large outage. We did implement 20 million dollars worth of energy improvments over the last 15 years that are saving us about 1 million dollars a year in all utilities combined, and will save even more as rates increase.


X UTILITIES OF XXXXXXXXXXXX
LARGE POWER SERVICE RATE
Availability
Service under this rate shall be available within the corporate limits of the City of XXXXXXXXXX and the adjacent territory served by X Utilities for commercial and industrial customers with monthly demands of 1,500 kilowatts or greater. Availability is subject to the General Terms and Conditions Governing Electric Service and the Utility Service Rules and Regulations.
Monthly Charges
Customer Charge
Per month .............................................................................................................$150.00
Energy Charge
For all kWh...........................................................................................................$ 0.0291 per kWh
Demand Charge
GenerationFor all kW of billing demand................................................................$3.79 per kW
Transmission
For all kW of billing demand................................................................$1.09 per kW
Distribution (not applicable to transmission service)
Primary Service Secondary Service
For all kW of billing demand $1.40 per kW $1.70 per kW
Load Factor Adjustment
A credit of $0.0050 per kW of billing demand will be allowed for each whole hour of use in excess of 365 hours-use.
Hours-use shall be the monthly kWh usage divided by the kW billing demand.

2006 APPROVED BY BOARD OF PUBLIC UTILITIES
EFFECTIVE Cycle 1, October 2006XXXXXXXXXXXFebruary 23, 2006
Supersedes rate schedule effective Cycle 1, October 2003.
X UTILITIES OFXXXXXXXXXXXXXXXX LARGE POWER SERVICE RATE
Demand Charge for Distribution
The Primary Service Demand Charge for Distribution will apply if the energy is metered at primary voltage (13,200 volts) and the customer provides and maintains all transformation facilities, including an approved transformer bank, circuit interrupters, and other protective devices which will clear faults on the customer?s side of the point of delivery.
No Demand Charge for Distribution will apply if the energy is metered at transmission voltage (69,000 or 161,000 volts) and the customer provides and maintains all transformation facilities, including an approved transformer bank, circuit interrupters, and other protective devices which will clear faults on the customer?s side of the point of delivery.
Metering at Different Voltages
X Utilities may, at its option, install metering equipment on the primary side of the transformer for a secondary voltage customer. In this case, the customer shall be allowed a one (1) percent discount for all the above charges and the Secondary Service Demand Charge for Distribution will apply.
Billing Demand
The billing demand for each month shall be the greatest of the following amounts in kilowatts:
1) Highest average actual demand during any period of 30 consecutive minutes in that month; or
2) Ninety (90) percent of the highest actual demand occurring in the most current billing months of July, August, or September.
Customers served under this Electric Rate shall have the option of having their billing demand based on measured demand occurring only during peak periods as defined in the General Terms and Conditions Governing Electric Service.
Power Factor Adjustment
A Power Factor charge of $0.025 per kW of billing demand will be made for each whole percent by which the monthly power factor is less than 100%.
The power factor shall be the kW demand divided by the coincident kVA demand expressed as a percentage, for the peak 30-minute interval during the billing month.