Electric Rates and Standby Charges

Presented by:

Cheryl Eakle – KPPC

Jason Volz – Harshaw TraneAugust 13, 2014

Kentucky Electric Utilities

Typical Non-Residential Rates

• General Service (demand <50 kW)• Commercial• Power Service (50kW < demand)• Industrial Time-of-Day • Transmission Service

Electricity Analogy

Energy Units – Electric Service

• kWh = unit used to measure electric consumption (1 kW used for 1 hour)

• kW = unit used to measure electric demand – Usually calculated in 15 or 30 minute

intervals– Peak Demand = greatest value over the

interval

Effective Cost or “All-in Cost”

Total Electric Bill ($)

Total Electric Use (kWh)

Effective Cost or “All-in Cost”

Time-of Day Energy Charge $0.037kWh

Total Electric Charges $11,748.77

Total Energy Used 144,640 kWh

All-in Cost $0.081/kWh

More on Electric Demand

Demand Ratchet – billing mechanism selects highest demand from the current or previous months

Example – 85% of the highest demand recorded in previous 11 months

Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-080

50

100

150

200

250

300

350

400

450

500

Actual DemandMonth

Dem

and

(k

W)

Additional Billed Demand

Ratchet Clause Example

85% of Peak Demand

Some Stand-by Rates

Utility

Secondary Service ($/kW)

Primary Service ($/kW)

Transmission ($/kW)

Distribution Service (TOD) ($/kW)

Affects Ratchet

?

Duke Energy-Rate GSS(Generator Support Service) $4.51 $5.15 $1.74 $4.30 No

LG&E-Rate SS (Supplemental or Standby Service) $12.86 $12.23 $11.04 Yes

KU-Rate SS (Supplemental or Standby Service) $12.54 $11.99 $10.84 Yes

Questions on Electric Rates?

Demand Profile Prior to CHP

• 2 MW Max Load occurs during peak period• ~1 MW Base Load• 33,300 kWh daily• 365 day operation

T.O.D. Energy RatesPeak Demand - $6.11/kWIntermediate Demand - $4.51/kWBase Demand - $4.00/kWEnergy Charge - $0.0399/kWh

Annual Energy Costs$350,880 – Demand Cost

$484,965 – Energy Cost

$835,845 – Total Cost

0 4 8 12 16 20 240

500

1000

1500

2000

2500

Time (hr)

Dem

and

(kW

)

Peak PeriodBase Period

Intermediate Period

Demand Profile After CHP

• 1 MW Base Load Generator used for CHP• 24,000 kWh produced by CHP generator• Generator fuel and maintenance cost - $0.043/kWh Annual Energy Costs$175,440– Utility Demand Cost

$135,441– Utility Energy Cost

$375,448– Generator Fuel and

Operation Costs

$686,328– Total Cost

$149,516– Total Energy Savings

Annual Standby Costs$12.86/kW – Standby Rate

$154,320 – Standby Costs for 1 MW

($4,804) – Savings after standby charges

0 4 8 12 16 20 240

200

400

600

800

1000

1200

Time (hr)

Dem

and

(kW

)

Peak Period

Base Period

Intermediate Period

Unplanned CHP Outage

• CHP Generator trips at 9 AM. It is not restored for 24 hours

Annual Energy Costs$212,060 – Utility Demand Cost

$136,769 – Utility Energy Cost

$374,419 – Generator Fuel and

Operation Costs

$723,248 – Total Cost

$112,596 – Total Energy Savings

Annual Standby Costs$12.86/kW – Standby Rate

$308,640 – Standby Costs for 2 MW

($196,044) – Savings after standby charges0 4 8 12 16 20 24

0

500

1000

1500

2000

2500

Time (hr)

Dem

and

(kW

)

Base Period

Intermediate Period

UnplannedCHP Outage

Peak Period