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Following is information
on electric demand to help facilities save electric
energy and keep costs down.
Common Power Industry
Terms
Following are key terms
that can help give you a good understanding of electric
demand:
- Kilowatt (kW)—Rate
of using electricity (Demand).
Example: Ten 100-watt lamps consume electricity at
the rate of 1,000 watts, or 1 kilowatt (kW).
- Kilowatt-Hour (kWh)—Electrical
energy actually used (Energy).
Example: Ten 100-watt lamps, when on for one hour,
consume 1 kilowatt-hour (kWh) (i.e., 10 lamps x 100
watts x 1 hour = 1 kWh).
- Load Factor—A
measure of energy use equal to the ratio of total
kilowatt-hours (kWh) used in a given time period
divided by the peak kilowatt (kW) use during that
time, multiplied by the hours in the time
period. Example: Actual kWh used / (peak kW x
Time) #1
Load factor expresses
how well (high) or poorly (low) a given electric utility
system is being utilized. Electricity utilities and
retail energy providers strive for customers with a
higher load factor. The closer to 1 a given load factor,
the better the system's efficiency.
What Is Demand?
Every electricity consumer's bill contains both
energy consumption and demand charges, which can be
compared to the overhead costs of doing business.
Residential customers pay one rate of charges for
electricity service, covering both energy #2 consumption
of electricity and demand. This simple, combined charge
is possible because it is assumed that there is
relatively little variation in electricity use from home
to home.
This is not the case among industrial and large
commercial energy users, whose electricity use—both
consumption and demand—varies greatly. Some need large
amounts of electricity once in a while; others, almost
constantly. Complicating this variable consumption and
demand is the fact that electricity cannot be stored. It
must be generated and supplied to each customer, as it
is called for—instantly, day or night, in extremely
variable quantities. Meeting these customers' needs
requires keeping a vast array of expensive equipment—transformers,
wires, substations and even generating stations—on
constant standby. The amount and size of this equipment
must be large enough to meet peak consumption periods
(i.e., when the demand for electricity is highest).
Traditionally,
utilities and public service commissions around the
country have determined that the most equitable way to
cover the cost of this equipment is to have those
customers who create this demand and the need for power
during these peak periods pay for its availability. For
this reason, utilities spread the costs of this extra
equipment among all commercial and industrial customers
as a separate charge for demand.
Defining Demand
Customers
Utilities install
demand meters whenever a customer's energy consumption
and/or demand meet criteria set forth in the utilities’
#3 tariffs. Once demand billing begins, it remains in
effect until the customer’s consumption and demand
patterns change or (in deregulated states) the customer
switches suppliers.
Comparing Demand and
Consumption
For demand customers, charges for consumption and
demand are separate. This exaggerated example
illustrates how the two work:
Suppose you have a commercial building with lighting,
cooling, machinery, and miscellaneous electric
equipment. Its fully installed load totals 15 kW. You
are not using the building and have no employees. On the
first day of each month, you come into the building and
turn on all electrical equipment and leave it on for 15
minutes. Then you shut everything off again and lock up
the building until the following month. What would your
electric bill look like? It would show very little
consumption; in fact, only 4 kWh, multiplied by the
price per kWh, e.g., 3.57cents #4/kWh
But what about your demand charge? At an average cost
of $8.00 per kW and the meter reading at 15 kW ($8.0 x
15), the demand charge would be $120.00.
Electrical consumption 4 kWh : $0.14
Electric Demand 15 kW : $120 #5.00
Total Due : $120.14
Understanding Demand
Metering
Much like your car's
odometer records accumulated mileage, electric meters
record consumption (kWh). Electric demand meters
function like your speedometer—with an important
difference.
A demand meter's
"needle" advances as electricity consumption
increases, just as your speedometer needle advances as
your speed increases in a car. When you stop the car,
the needle moves back to zero, regardless of the highest
miles per hour reached on the trip. Unlike a speedometer
needle, demand meters record the highest average
kilowatts reached and maintained in a 15-minute interval
within the billing period.
If within one billing
cycle your usage reaches 50 kW, for example, and stays
there for 15 minutes, the meter needle remains at 50 kW
unless or until your usage exceeds that level. If your
usage later reaches 55 kW and stays there for 15
minutes, the needle will then stay at 55. The new index
point is maintained, even when you are using electricity
at below 55 kW, until the meter reader comes to record
the demand and resets the meter back to zero.
For example, suppose
you have a two #6 100 kW chillers. If you operate both
units simultaneously, the demand meter will record 200
kW. However, if you can use the motors alternately, the
maximum demand reading will be only 100 kW. The 100 kW
saved would save about $800 per month, or $9,600 per
year.
Saving Energy with
Demand Management
There are many ways to
manage demand, ranging from:
- Energy information
systems,
- Sophisticated energy
management systems that program buildings and
processes,
- Customized demand
rates from your energy provider,
- Manual controls,
- Time-clocks, or
- A combination of any
of the above.
The Demand
"Ratchet" Clause
The demand
"ratchet" clause usually applies only to the
largest customers of a utility. At times, there will be
a difference between these customers' recorded demand as
taken from the meter and the billing demand that the
customer pays.
For example, suppose a
building with heating reaches a peak of 300 kW during
one winter month. For the next 11 months, the minimum
demand will be 150 kW per month for billing purposes,
even though the recorded demand may have been less than
150 kW. This is because a utility’s #7 pricing
structure's ratchet clause stipulates that the minimum
billed demand will be not less than one-half of the
maximum demand recorded during the previous 11 months.
When the ratchet clause is applied to your electric
service account, both the meter-recorded demand and the
billing demand are indicated on your bill.
An example of using
Automated Energy’s Load Profile Analyzer to find
energy cost savings
Figure 1. A
first look at the main screen showing energy patterns
for 4 actual chillers for one electric billing period.
Figure 1. shows
that demand corresponding to these chillers
substantially peaked twice 1.34 MW and 1.12 MW. The next
figure shows the information the Load Profile Analyzer
provides to let the facilities manager reduce his
utility bill in the future.
Figure 2. After
pressing the F2 key, the user discovers that shaving
only those two peaks, this facility would have saved
over $4,200 on one month’s bill.
There are several other
ways to use AEI’s Load Profile analyzer to save you
money in any deregulated market. Other features include:
- Aggregation of
facilities’ profile information across:
- States,
- Utilities,
- User defined
Regions, and
- Submeters.
- Our product also has
a rate engine that allows the user to:
- Estimate a monthly
bill prior to receiving it from the utility,
- Compare rates,
whether it’s between competitive suppliers or
between different rates at the same utility.
- Real-time
capabilities, and
- Customized cost and
energy reports.
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