Evan Berger Director of Energy Solutions CALMAC Manufacturing Corp. Fair Lawn, NJ November 2014 CALMAC Mfg. Corp.

Transcription

1 Evan Berger Director of Energy Solutions CALMAC Manufacturing Corp. Fair Lawn, NJ November

2 Conclusions 1. There are three ways to lower electric costs: a) Buy fewer units of energy. b) Purchase it when it s cheaper, at night. c) Negotiate a better rate. 2

3 Conclusions 2. Commercial Rates are Different than Residential Rates: a) Residential Rates are based solely on Usage (kwh) b) Commercial Rates are typically based on a mixture of Usage (kwh) and Demand (peak kw). c) In deregulated states like Illinois, Demand Charges are how utilities, like ComEd, pay for infrastructure investments. 3

4 Conclusions 3. Rates and tariffs are complicated. Why? A few possible* reasons come to mind a) Lawyers write them b) Regulators dislike plain English c) The less customers know about their electricity bills, the more utilities and Third-Party Suppliers can possibly* earn more money at their expense *Note: pure speculation 4

5 Defini&on: any electricity charge that is assessed on a per- kw basis In ComEd, there are two types of Demand Charges: 1. U$lity Demand Charges 2. Grid Demand Charges (from PJM) Note: more o;en than not, Grid Demand Charges are blended in Third Party Supplier bills and thus not visible to the customer; we ll discuss this issue at great length later in the presenta&on 5

6 Demand makes up 32% of this customer s bill. 6

7 Utility Demand is $5.89/kW monthly in this bill. 7

8 Grid Demand is $4.03/kW each month, but the kw is calculated differently. As of June 1, 2014, Capacity prices increased 5x. 8

9 9 PJM is the world s largest grid, covering 13 states from the Mid- Atlantic all the way down to North Carolina and over to Illinois PJM schedules the reliable flow of power from generators to consumers and charges customers for the service ComEd joined PJM in May 2004

10 ComEd Commercial Delivery Class Energy (usage): Day: $0.040/kWh Night: $0.040/kWh $0.100/kWh $0.040/kWh Demand: $9.90/kW/Month How big an effect is the Demand Charge?? Energy is 62% less expensive at night

11 Conventional Chiller System Demand Cost /month 1000 tons x 0.8 kw/ton = 800kW 800 kw x $9.90 = $7,920/month Energy Usage for Chiller for Month 1000 tons x 10 Hrs x 75% x 0.8 kw/ton x 22 days/month = 132,000 kwh Approximate Cost for Demand / kwh $7,920/132,000 kwh/month = $0.060/kWh Therefore Daytime Energy = $ $0.06 = $0.10/kWh

12 U$lity Demand is based off of the peak interval (15 or 30 minutes) in a given billing period In this billing period (May 29 June 28), highest 30-minute interval was 1,917kW from 3:30-4:00pm a hot Wednesday in late June 12

13 Introducing the Grid PJM Interconnec?on 13 PJM is the world s largest grid, covering 13 states from the Mid- Atlantic all the way down to North Carolina and over to Illinois PJM schedules the reliable flow of power from generators to consumers and charges customers for the service

14 PJM Capacity Charges are based on a customer s Peak Load Contribu$on (PLC); it is calculated based on the customer s consump$on during the five highest hours of total Grid demand (kw) during the previous year. These are known as the 5CPs the five Coincident Peak Hours 14

15 The 5CPs almost always occur during Summer adernoons 5CP Chart, July 15, 5-6pm July 5, 3-4pm June 8, 4-5pm July 6, 4-5pm Aug. 10, 4-5pm July 16, 4-5pm July 6, 4-5pm July 19, 4-5pm July 7, 4-5pm Aug. 11, 4-5pm July 17, 4-5pm July 16, 4-5pm July 20, 4-5pm July 23, 4-5pm Aug. 17, 4-5pm July 18, 4-5pm July 17, 4-5pm July 21, 4-5pm Aug. 10, 4-5pm Aug. 18, 4-5pm July 19, 2-3pm July 18, 2-3pm July 22, 2-3pm Aug. 11, 4-5pm Aug. 20, 4-5pm Summer 2013 PJM peak load was 158 GW. 15

16 PJM Demand Charges are Ratcheted Ratcheted: Once you set the Demand kw, it stays at that level on your bill for a full year. Note: Some utility Demand Charges are ratcheted, but not ComEd s 16

17 ComEd Very Large Load Delivery Class Demand Charge Cost ($/kw) # of Cooling Months Total Annual ComEd $ $35.34 PJM Capacity* $ $48.36 TOTAL $9.92/kW *Ratcheted $83.70/kW, annually PJM charges nearly double the customer s sensitivity to Demand in the Summer; and then they have to bear that cost all throughout the Winter. 17

18 Results derived by Trace Compared to a 350 ton chiller, Thermal Storage plus a 190 ton chiller yields $15,000 in annual savings Much of the savings comes from the winter months, when they benefit from reduced PJM ratchet costs

19 Many commercial customers use a third-party supplier, like a Hudson Energy, Direct Energy, Constellation, etc. Suppliers often use a blended rate everything combined into one per-kwh rate. This makes it easier for customers, but it obscures one of the two ways they have to save money on their bills! Is this an insurmountable problem? No. When you consult with a client, advise them to insist that starting with their next contract, all charges, per-kw and per-kwh, be listed out line-by-line Suppliers will do this, because they hate losing business. Ask and you shall receive. And if you don t receive, ask somebody else. 19

20 20 Integrys takes PJM Capacity & Transmission and passes them through as per-kwh charges. Ask them, and they ll turn it back into a per-kw charge. Demand makes up 28% of this customer s bill.

21 AEP takes all PJM charges: the Demand Charges (e.g. Capacity, Transmission), and all the other Ancillary Services and O&M, and blends them into one rate. No transparency to the customer. 21

22 Daytime Nighttime $ 3.99/gallon $ 1.59/gallon 22

23 Evan Berger, Director of Energy Solu$ons CALMAC Manufacturing Corp. 23