1. Utility Analysis

2. Baseline Electricity Analysis  Understanding and documenting current energy use is called developing a baseline. Developing a baseline: –Helps define potential energy savings –Helps focus efforts on the most important areas –Determines accurate avoided energy costs for calculating cost savings –Helps identify energy saving opportunities –Provides a baseline from which to measure the effectiveness of energy management activities.

3. Baseline Electricity Analysis  This section discusses: –How utilities typically structure charges for electricity –How to calculate the avoided cost of electricity –How to use utility billing analysis to help identify cost saving opportunities

4. Electricity Costs Source: U.S. Dept. of Energy, Annual Energy Review 2008, Report No. DOE/EIA-0384(2008)

5. Electric Rate Structures  With the exception of rate structures that employ real-time pricing, the total cost of electricity in most commercial and industrial rate structures is the sum of four components: –A service charge –An energy charge –A demand charge –A power factor charge

6. Energy Charge  Fixed Block Structures: the cost of energy depends on how much is purchased. –$0.05 /kWh for the first 10,000 kWh –$0.04 /kWh for the next 100,000 kWh –$0.03 /kW for all remaining kWh  Demand-dependent Block Structures –$0.05 /kWh for first 250 kWh/kW –$0.04 /kWh for next 150 kWh/kW –$0.03 /kWh for all additional kWh  Fuel Cost Adjustments and Taxes: –Because the cost of fuel for a utility may vary over time, utilities sometimes modify the energy costs in the rate schedule with a “fuel cost adjustment”.

7. Demand Charge  Demand Period: –Record electricity consumption every 15-minute or 30-minute interval throughout a billing period. –Thus, near-instantaneous power spikes, such as when motors startup, have little effect on the peak demand since the duration of a short power spike is small compared to the demand interval. Moreover, longer demand periods generally result in lower peak demand.  On Peak-Off Peak Rates: –‘billing demand’ is calculated as the greater of: –the actual on-peak demand, or –50% of the actual off-peak demand.  Seasonal Demand Charge: –the actual demand, or –75% of the peak monthly demand during the previous 12 months.

8. Power Factor  In resistive loads, such as those from electric resistance heating elements, all power supplied to the load is dissipated as heat.  In inductive modes, such as those from motors, some power is used to energize the motor’s coils and create a rotating magnetic field. This power alternately flows to and from the load, and is called reactive power (kVAr). Reactive power is unusable by the load.  Thus, the total power supplied to the load (kVA) must be greater than the power consumed by the load (kW). The ratio of actual power consumed by equipment (kW) to total supplied power (kVA) is called the power factor.  Utilities typically charge for low power factor since the utility must supply enough power to compensate for the reactive power, even though only a portion of the supplied power is actually consumed by the motor.

9. Power Factor

10. Add capacitors (kVAr) to correct PF

11. Electrical Cost Breakdown

12. Primary and Secondary Service  Transformers reduce the voltage of electricity supplied to plant.  Primary Service: customer owns and maintains the transformer  Secondary Service: utility owns and maintains the transformer  Lower electricity rates for primary service, since the customer must purchase and maintain the transformer.  Advantageous for customer to purchase transformer when demand > 1,000 kVA.

13. Example Rate Structure 1  General Service Primary Rate  Service: $95 /month  Energy: –$0.008 /kWh (base) –$0.012 /kWh (approximate fuel adjustment) –$0.001 /kWh (taxes) –Total: $0.021 /kWh  Demand: –$13.86 /kW-month –Greatest average power during any 30-minute period –Greatest of: –100% of on-peak (weekdays: 8 am to 8 pm) –75% of off-peak (all other times) –75% of max Jun, Jul, Aug, Dec, Jan, Feb in last 11 months  Power Factor: $0.30 /kVAr-month

14. Example Rate Structure 2  General Service Secondary Rate  Service:No charge  Energy:$0.0256 /kWh for first 250 kWh/kVA  $0.0092 /kWh for all additional kWh  Demand: $18.36 /kVA-mo for first 4,000 kVA:  $14.45 /kVA-mo for all additional kVA  Greatest average power during any 15-minute period  Power factor:Implicit

15. Verify Billing Amounts

16. Avoided Cost of Electricity  To calculate cost savings from reducing electricity usage, it is common practice to multiply the average cost of electricity times the electricity savings.  Unfortunately, estimating cost savings using the average cost of electricity usually inflates the estimated cost savings because the average cost of electricity includes fixed costs such as service charge and because many rate structures employ block structures in which the first block of electricity costs more than subsequent blocks.  In addition, use of the average cost of electricity to estimate cost savings from energy conservation retrofits may lead to even greater errors if the energy conservation retrofit does not affect peak demand.  Thus, the most accurate way to estimate cost savings from reducing electricity usage is to calculate the reduction in demand and energy costs separately based on the average demand and energy use and the rate structure.

17. Load Factor  Load factor is average fraction of peak electrical demand used by a facility.  LF is ratio of average power consumption to maximum power consumption.  LF = (kWh/period) / (peak kW x hours/period)  Load factor can be used to predict of how many shifts per day a plant is running or to gauge the occupancy of a building.

18. Interpreting Electricity Billing Data  Use graphical analysis

19. Interpreting Electricity Billing Data  Energy follows production

20. Interpreting Electricity Billing Data

21. Quick Electrical Demand Breakdown

22. Quick Electrical Energy Use Breakdown

23. Interpreting Interval Data

24. Electrical System Cost Saving Opportunities  Rate Structure –Switch to or negotiate electric rate structure with lower overall costs –Enroll in demand response program  Billing Errors –Reconcile billing error with utility  Meter Consolidation –Consolidate electrical meters  Purchasing Transformer –Purchase transformer and switch to primary service  Power Factor Correction –Correct power factor by downsizing over-sized motors –Correct power factor by adding capacitors  Demand Saving Potential –Reschedule operation of electrical equipment to reduce peak demand. –Use control equipment to shed loads to manage peak demand

25. Meter Consolidation 2 Meters: ED = 80 + 50 = 130 kW 1 Meter: ED = 100 kW

26. Demand Saving Potential Low potential for 1-shift and 3-balanced shift operations

27. Demand Saving Potential Good potential for uneven shifts

28. Demand Saving Potential 20 kW potential limited by first shift demand to 10 kW

29. Demand Saving Potential Savings larger with “off-peak demand rates”: Savings = 500 kW for moving demand from 1 st to 2 nd shift Savings = 1,000 kW for moving demand from 1 st to 3 nd shift

30. Demand Response Programs  Many utilities and independent companies offer demand response programs  Demand response compensates customers for having ability and willingness to curtail load during critical times on the grid.  Demand response payments ~ $50 /kW-year.  No “demand emergencies” in 13-state PJM territory in last two years.  Example: agree to reduce demand by 100 kW and receive ~ $5,000 per year.