1. Conducting Distribution Transformer Loss Evaluations IEEE Rural Electric Power Conference April 21, 2015 Troy Knutson P.E.

3. 1 of 11 coop-owners of Minnkota Power Cooperative Service to 43,000 members 5,000 mi 2 service area 4,700 miles of line 260 MW Peak

4. How many use loss evaluated transformers? What would your CEO/Manager say? How about your CFO? January 1 st, 2016

5. RUS Bulletin 61-16 Originally published 1983 Present worth analysis Outdated estimates/averages New method developed in late 80’s Coupled with advent of computerized spreadsheets Revised as a part of NRECA T&DEC committee activity

6. New Bulletin Uses A and B values for Total Ownership Cost (TOC) valuation Goes through a step by step example Adds an excel spreadsheet Goal was to simplify!

7. Total Ownership Cost TOC = Purchase Price + Cost of Losses Transformer manufacturer will bid a purchase price and losses NL and LL Putting a $ value on losses TOC = Purchase Price + (“A”*NL + “B”*LL) Evaluates strictly on cost “A” and “B” will give most cost effective design Based on assumptions

8. “A” Factor

9. Related to core losses Not dependent on loading Cost in $/Watt will give an “A” value Ways to reduce No-Load losses Use higher grade core steel Thinner laminations Larger leg area

10. “A” Factor Inputs DC’ - levelized demand cost in $/kW-year EC’ - levelized energy cost in $/kWh HPY - Hours per year FCR - Fixed Charge Rate or carrying charge

11. “A” Factor Inputs Demand and Energy Cost determined from PPA These will be base values to be levelized Hours per year (8760) Fixed Charge Rate gives costs associated with owning a transformer Interest Depreciation Insurance Taxes O&M

12. “B” Factor

13. Related to windings Dependent on loading Also referred to as I 2 R losses Cost in $/Watt will give a “B” value Ways to reduce Load Losses Copper over aluminum Larger area conductor

14. “B” Factor Inputs DC’ - levelized demand cost EC’ - levelized energy cost Hours per year Fixed charge rate PL 2 - levelized peak loading on transformer RF - peak loss responsibility factor LSF - loss factor

15. “B” Factor Inputs

16. CRF = used to levelize the total present worth Converts the sum into a annual series i = interest rate n = number of years

17. “B” Factor Inputs Peak Loss Responsibility Factor (RF) Differences between peak on transformer vs. distribution system

18. “B” Factor Inputs Loss Factor (LSF) Average transformer losses vs. the peak transformer losses Nonlinear relationship to load factor

19. Escalation and Inflation

20. Energy Escalation and Inflation A and B values need provisions for increases over time Due to inflation Due to increasing costs This can be converted to an equivalent level cost “Levelized” The levelized value is neither the first cost or the final cost Levelized values will be used in the evaluation denoted by a apostrophe (‘)

21. Adjusting for Inflation

22. Adjusting for Escalation and Inflation r = The equivalent inflation rate P = the rate of increase in costs per kwh associated with G&T ig = the inflation rate for the economy as a whole expressed as a decimal

24. Single phase 50 kVA comparison Known 30 year depreciation DC = $120/kW-Yr EC = $0.06/kWh RF =.81 LSF =.532 FCR = 14.58% Assumptions PL I = 80% Load growth (g) = 1.5% Interest rate (i) = 4.5% Energy escalation (p) = 3% Inflation rate (ig) = 2.8%

25. Single Phase 50 kVA Comparison A value is $4.54/Watt B value is $2.45/Watt

26. Single Phase 50 kVA Comparison Transformer X Bid Price = $3,500 NL = 90 Watts LL = 537 Watts Transformer Y Bid Price = $4,200 NL = 63 Watts LL = 221 Watts

27. Single Phase 50 kVA Comparison Transformer X TOC = $3,500 + ((4.54*90)+(2.45*537)) = $5,224 Transformer Y TOC = $4,200 + ((4.54*63)+(2.45*221)) = $5,027

28. DOE Standard DOE transformer efficiency standards http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.asp x/ruleid/44 http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.asp x/ruleid/44 Mention meeting this in your spec “10 CFR Part 431 for liquid-immersed distribution transformers” Manufacturer will be ultimately responsible but a large price increase may be the surprise January 1, 2016 May be re-evaluated before

30. DOE Rule Impact on Manufacturing Commodities markets Higher grade grain oriented core steel Amorphous core steel Production limitations Increased weight and dimensions Transportation cost

31. Final Thoughts Each utility needs to make several assumptions! Each A and B is only for assumptions made Cost is not the only factor Warranty Service Quality Lead times May want to have separate A and B for different kVA ranges Manipulate equations to find lowest cost kVA size

32. Questions? Troy Knutson P.E. tknutson@kwh.com 701-356-4542