Flicker Index
Senior Member
- Location
- Pac NW
- Occupation
- Lights
TOU is more about broader scale (think interstate highway congestion management/smog control) demand management where kW demand is much more relevant at local level, such as shift-change rush in a company town.TOU variable rates would probably be better at incentivizing use patterns that are better for the grid than demand charges.
TOU rates would cause people to run the washing machine, dishwasher, etc. on off-peak hours.
Imagine you're a cab operator and if someone requests a ride for 6 passengers and you're not allowed to refuse it. That's "local demand". If this was routine, then the capacity is utilized. If this was just once a month, the cab company incurs the cost of always having to have a means of accommodating six passengers at once, like depreciation and insurance on a car that is rarely used. So, industrial customers are often charged for the maximum 5/15/30 min kW demand that occurs over a period of months to a year, depending on the rate tariff.
If the weighing period is 15 minute/1 year peak and the maximum kWh clocked during ANY 15 minute in a one year period is 5kWh, then your demand for that period is 20kW. If the demand charge is $6/kW, that means you'll be paying $120/mo, for the applicable period as determined by tariff, not just that billing period. Alternatively, sometimes the customer can buy their own connection to the canal/medium voltage grid if there's ample capacity on medium voltage network, but not much capacity left on PoCo owned transformer. i.e. customer owned transformer from medium voltage. Who pays the transformer energy loss is determined by tariff.
Suppose you've got a pump station that basically run a 5kW load around the clock. That's 5kW demand and 3,600kWh of billable energy a month. But what about something that uses 1,000kWh in a few days out of the year but carnival calls for operating up to 300kW of load intermittent to run major rides. You bet the festival ground is going to be paying a hefty demand charge for having the capacity always available. That transformer will consume considerable power just sitting idle and it's a fairly expensive piece of equipment that sits idle much of the time. If it was installed to serve an office building, it won't be parked most of the time, but working to convert primary to sellable kWh much of the time.
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