Understanding The Electricity Bill. Paul Valenta CALMAC Manufacturing Corp. Fair Lawn, NJ March 13, 2015 CALMAC Mfg. Corp.

Transcription

1 Understanding The Electricity Bill Paul Valenta CALMAC Manufacturing Corp. Fair Lawn, NJ March 13, 2015

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 Demand Charges Definition: any electricity charge that is assessed on a per-kw basis In ComEd, there are two types of Demand Charges: 1. Utility Demand Charges 2. Grid Demand Charges (from PJM) Note: more often 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 presentation 5

6 Sample ComEd Bill Demand makes up 25% of this customer s bill. 6

7 Utility Demand (ComEd) Utility Demand is $4.83/kW monthly in this bill. 7

8 Grid Demand Grid Demand is $0.85/kW monthly in this bill. 8

9 PJM Interconnection 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

10 Grid Demand Prices Spiked from 2013 to 2014, will remain high $4.15/kW $ As of June 1, 2014, Capacity prices increased 4.9x.

11 The Demand Charge Effect ComEd Large Load Delivery Class Energy (usage): Day: $0.042/kWh Night: $0.042/kWh $0.099/kWh $0.042/kWh Demand: $9.50/kW/Month Energy is 57% less expensive at night How big an effect is the Demand Charge??

12 Demand Charge Effect.. Do the Math (Back of the Envelope) Conventional Chiller System Demand Cost /month 1000 tons x 0.8 kw/ton = 800kW 800 kw x $9.50 = $7,600/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 $7,600/132,000 kwh/month = $0.057/kWh Therefore Daytime Energy = $ $0.057= $0.099/kWh

13 Calculating Utility Demand 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 13

14 Calculating GRID Demand Introducing the Grid PJM Interconnection 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

15 1500 Walnut Street Philadelphia 1 st Tower nd Tower Stories 270,000 sq. ft 2008 significant upgrades replacing 2 chillers and including ice storage tanks Average demand 1060 kw Summer Peak 1400 kw

16 2008 HVAC Upgrade Existing chillers were: Unreliable Inefficient 500 tons & 600 tons HVAC system was failing Tenent Retention was a concern Operating costs were a concern Chillers were replaced with two 300 ton chillers 1370 tn hours of ice storage installed Storage was originally justified by demand reduction

17 Results Original retrofit had a two year payback with traditional demand rates in place Energy savings in the summer is about $40,000 / month After deregulation, a demand response provider was part of team, controls were changed and controls were optimized Consumption went from 1.6 m kwh to 1.1 m kwh Demand Response Revenue is between $20,000 and $30,000 annually

18 Calculating GRID Demand PJM Capacity Charges are based on a customer s Peak Load Contribution (PLC); it is calculated based on the customer s consumption 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 18

19 alculating GRID Demand The 5CPs almost always occur during Summer afternoons 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. 19

20 Calculating GRID Demand PJM Transmission Charges are based on the customer s Zonal PLC the customer s demand (kw) during the highest five hours of the utility s demand during the previous year. In 2013, ComEd and PJM hours were almost identical. 20

21 Calculating GRID Demand 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 21

22 Demand Charge Summary ComEd Very Large Load Delivery Class Demand Charge Cost ($/kw) # of Cooling Months Total Annual ComEd $ $33.18 PJM Capacity* $ $49.80 TOTAL $9.68/kW $82.98/kW, annually *Ratcheted 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. 22

23 Ice on Coil Internal Melt Easily Adapts to Chilled Water System

24 Ice on Coil Internal Melt Easily Adapts to Chilled Water System Added: Blending Valve Diverting Valve Ice Tank(s) Controls Heat Transfer Fluid Temperature Control Valves

25 Typical System 25

26 Comparison: Traditional Cooling vs. Load Shifting Results derived by Trace700 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 26

27 Third-Party Suppliers (LSEs) Many commercial customers use a third-party supplier, like a ConEd Solutions, 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. 27

28 Sample Bill: Third Party Supplier 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. 28

29 Sample Bill #2: fully blended rate 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 I bet they never knew what hit them when Capacity prices went up 5x three months later. 29

30 Daytime Nighttime When Would you Fill-up?

31 Questions? Paul Valenta, Vice President of Marketing and Sales CALMAC Manufacturing Corp. 31