Energy Bills Analysis

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Energy Bills Analysis
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ENERGY BILLS ANALYSIS

• OUTLINE
• Energy Accounting in Buildings
• Energy Bill Analysis
• - Types of Pricing
• - Utility Daily Peak Loads
• - Why is Load Variation Important
• - Utility Seasonal Peak Loads
• Rate Structures

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ENERGY ACCOUNTING IN BUILDINGS

• OUTLINE
• Energy Use Index (EUI)
• Energy Cost Index (ECI)
• Energy Conversion Units

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Energy Use Index (EUI)

• Basic measure of a facilitys energy performance
• A statement of the number of Btus of energy used
  annually per ft2 of conditioned space
• To compute the EUI
• - Identify all the energy used in the facility
• - Tabulate the total Btu content
• - Determine the total number of ft2 of
  conditioned space
• EUI Total Annual Btu / Total ft2 of AC space
• Typical Office Bldg EUI 100,000 Btu/ft2/year

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Energy Use Index for Commercial Buildings
(Source US DOE)
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Food Sales and Health Care have highest average
EUI 200,000 Btu/ft2/year

• Example An office building has 100,000 ft2 of
  conditioned floor space and uses 1.76 million kWh
  of electricity and 6.5 million ft3 of natural gas
  in 1 year.
• Solution Convert electric gas use into Btus
• 1 kWh of electric energy is 3,412 Btu
• Thus, 1.76 million kWh is 6.0?103 MMBtu
• 1 ft3 of Natural Gas contains 1,000 Btu
• Thus 6.5 million ft3 of Gas is 6.5?103 MMBtu
• EUI 12.5?103 MMBtu / 100,000 ft2 125,000
  Btu/ft2/yr

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This value of 125,000 Btu/ft2/year is larger than
the EUI for an average building of 88,700
Btu/ft2/year, and also larger than the average
EUI for an office building of 106,000 Btu/ft2/year

• The EUI has some fairly obvious limitations
• NOT all Btus are the same
• This gives rise to a more meaningful measure
  of energy efficiency, the Energy Cost Index

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Energy Cost Index

• The EUI is somewhat misleading since all Btus
  are not really equal.
• Electric power is much higher quality energy
  than oil or gas, and it costs about 3 times as
  much per end use Btu.
• The ECI All Costs of E / Total ft2 of all
  conditioned space

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ECI Example

• For the 100,000 ft2 office building looked at
  earlier, the cost of electricity is 123,300/yr,
  and the cost of gas is 32,500/yr
• The ECI is then 155,800 / 100,000 ft2
• 1.56/ft2 /yr
• The ECI is easy to compute and is very useful

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Energy Bills Analysis

• Understanding reasons for present energy costs
  one of the earliest steps of an energy audit
• Determine Rate Struct. for each energy type used
  at the facility

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Types of Pricing
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Utility Daily Peak Loads

• Electric utilities experience widely varying
  loads each day.

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Why is Load Variation Important?

• Part of the time the utility does not need to use
• all of its generating facilities (JIT)
• Part of the time the utility might just not have
• enough generation capacity (Honduras88)
• Electric energy cannot be stored economically so
• the facilities for generating it must be
  available
• at the time the energy is needed.
• (California, Venezuela, Chile 85 Earthquakes)

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Utility Seasonal Peak Loads

• Many utility loads differ significantly from
  season to season due to Heating and AC
• Loads may be low in spring and fall no heating
  or AC required
• Winter loads may be high from heating needs
• Summer loads may be high due to AC needs

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Natural Gas Rates
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Electric Rate Structures

• OUTLINE
• Types of Electric Utilities
• National Utility Statistics
• National Electric Generation Statistics
• Rates in The Energy Crisis
• The Structure of Electric Rates
• Power vs Energy (kW vs kWh)
• The Demand Ratchet
• Electric Bill Calculations (Power Factor)

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InvestorOwned Utilities

• Subject to regulation by the state public utility
  commissions
• Usually the largest utilities, but the smallest
  sized group of utilities
• Examples Baltimore Gas Electric Co., PEPCO,
  Florida Power Light Company, Southern
  California Edison, TECO, etc.

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Municipal Utilities

• Owned and operated by municipal governments
• (Nat. Gas, Electricity and Water Not very
  common)
• May be run by an appointed board or commission
• In some states, public utility commissions have
  regulatory authority over some aspects of
  operations
• Some large municipal utilities like Gainesville
  Regional Utility (GRU) Sacramento Municipal
  Utility District (SMUD), many small municipal
  utilities

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Rural Electric Cooperatives CLAY
ELECTRIC Co.

• Chartered under the Rural Electric Administration
  (REA) - subsidized
• Member-owned, and members elect their operating
  directors and board
• May be subject to limited state regulatory
  authority
• Some large RECs such as Clay Electric
  Cooperative (FL) most are small to medium sized

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National StatisticsUtilities vs Electric
Generation
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Early History of Rates

• The earliest rates were very simple 10/mo per
  light-bulb (Edison)
• The first electric meter read in ft3
• Meters were soon changed to display lamp-hours
  and then kWh
• Business was so good that many customers were
  added, and soon caused a night peak load that
  brought on operational problems.

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• The solution was to offer large customers very
  large rates.
• Step rates were adopted to get costs down for
  large users. e.g. customers using less than 100
  kWh, and over 100kWh paid 3/kWh for all kWh used
• A later solution to the peak load problem
  involved charging separately for kWh and kW

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Rate Stability Until The Energy Crisis

• The declining block rate was used to promote use
  of energy
• Customer charges were added
• Everything was great until 1970 !
• 1978 USA PURPA was created to require all
  utilities to examine their rates and rate
  structures, and possibly modify them to encourage
  energy efficiency

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The Structure of Electric Rates

• Electric rate structures vary greatly from
  utility to utility, but they are all common
  features
• Commercial and industrial customers have 3 or 4
  major components to their electric bill
• - customer cost
• - energy cost
• - demand cost
• - other, such as power factor, time of day,
  voltage levels, quality of power
  (interruptible rates), and customer class.

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Key Factors in Electric Energy Use

• There is a big difference between kW kWh
• A kW is a measure of power being used
• A kWh is a measure of energy being used
• Analogy Example Consider your car
• - kW is like the speed that is measured by
  the speedometer
• - kWh is like the distance that is measured
  by the odometer

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How is kW Measured ?

• The electric utility does not measure
  instantaneous values of the kW a facility uses.
  Instead, they always average the values of the kW
  over a short period usually 15, 30 or 60
  minutes
• Two common approaches are used for this averaging
  process to get the metered kW value
• a) The Sliding Window averaging method
• b) The Synchronous averaging method

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Sliding Windows Metering
Highest 15 min. demand sliding window metering
method
kW
Plant Load
Tape recording kWh pulses from meter
800 815 830 845
900 915 930
Sliding 15 min. window
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Synchronous Metering
Highest 15 min. demand sliding window using
Synchronous metering method
Plant Load
800 815 830
845 900 915 930
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Why is this All Important ?

• Understanding the definitions of kW and kWh
• is to understand how electric utilities operate,
  and how they use their facilities
• A key point is that there is presently no
  economic way to store large quantities of
  electric energy. Electricity is truly a JIT
  production process
• Electric use fluctuates during the day, and
  during the season of the year, and causes
  utilities additional expenses compared to
  constant loads

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The Demand Ratchet

• Some utilities want to make sure a customer pays
  a reasonable share of the cost of providing them
  with electrical power. One way they do this is to
  add a demand ratchet to their rate structure
• The demand ratchet is usually set such that the
  customer pays a large percentage of the highest
  demand experienced over the previous 11 months
  even if that peak was reached only once
• Typical demand ratchets range from 60 to 100

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Typical Electric Cost Components

• Energy cost e.g. 0.05/kWh
• Demand cost e.g. 6.50/kW/mo
• Fuel adjustment e.g. 0.005/kWh
• Power factor penalty e.g. 6.50/kVA/mo or
• kWbilled kW ? (0.85/PF)
• Ratchet clause-e.g. Maximum of kW this mo, or
  70 of maximum kW in last 11 months

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Sample Electric Rate Structure 1

• Rate Structure (per month)
• Customer cost . . . . . . . . . . . 21.00/mo
• Energy cost . . . . . . . . . . . . 0.049/kWh
• Demand cost . . . . . . . . . . 6.50/kW/mo
• Taxes . . . . . . . . . . . . . . . . . Total of
  8
• Fuel Adjustment . . . . . . . . . 0.005/kWh

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Bill Calculation Example 1

• A company that manufactures metal wired hoses
  receives service from its electric utility at the
  above general service demand rate structure. The
  electric energy use for this company for one
  month are
• Energy Consumption . . . . . . . . . . . 50,000
  kWh
• Metered Demand . . . . . . . . . . . . . . . . .
  225 kW
• Find the cost of electric bill for the month.

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Solution

• Customer charge 21.0
• Demand 225 kW 6.50/kW 1,462.5
• Energy 50,000kWh0.049/kWh 2,450.0
• FCA 50,000kWh0.005/kWh 250.0
• Sub-Total 4,183.5
• Taxes (Total of 8)
  334.68
• Total
  4,518.18/mo

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Economic Benefit of EMOs

• The company above has an average energy cost of
  (4,518) / (50,000 kWh) 0.090/kWh
• An EMO that reduces peak demand would save the
  company 7.02/kW/mo
• EMOs that save both energy and demand on the
  first shift would save about 0.090/kWh
• EMOs that save electrical energy during the
  off-peak shift would only save 0.049/kWh because
  they are already using off-peak energy and there
  would be no additional demand cost savings.

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Sample Electric Rate Structure 2Secondary
service (service level 5)

• Customer charge . . . . . . . . . . . . . . . .
  151.00/bill/mo
• Demand charge applicable to all kW/mo of billing
  demand
• On-peak season . . . . . . . . . . . . . . .
  13.27/kW
• Off-peak season . . . . . . . . . . . . . . . .
  4.82/kW
• Definition of season
• On-peak season Revenue months of June-October
  of
• any year.
• Off-peak season Revenue months of November of
  any
• year through May
  of succeeding year

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Energy charge First 2 million kWh . . . . . . .
. . . . . 3.528 /kWh All kWh over 2 million . .
. . . . . . . . 3.113 /kWh

• Power Factor clause
• When the customers average power factor is less
• than 80, the Billing Demand shall be determined
  by
• by multiplying the metered demand by 80 and
  divided
• by the actual average power factor in
• Fuel Cost adjustment
• A variable amount is set by the utility to allow
  them
• to recover all their fuel costs
• Ratchet Clause 65 demand ratchet

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Bill Calculation Example 2

• Using the rate structure above (Service
  level Secondary level 5), calculate the July
  bill for the company whose electric use is below
• Month July 2005
• Actual demand . . . . . . . . . . . . . . . . .
  . . . . .. . 250 kW
• Consumption . . . . . . . . . . . . . . . . ..
  . . . . 54,000 kWh
• Previous high billed demand (April 2005) . . . .
  . 500 kW
• Power Factor . . . . . . . . . . . . . . . . . .
  . . . . . . 75
• Sales Tax 6
• Fuel Adjustment 1.15 /kWh (This value is
  calculated by the utility company according to
  the formula in the rate schedule).

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As a first step, calculate the demand

• Power Factor correction
• Adjusted demand (actual demand) (0.8/PF)
• 250 kW (0.80/0.75)
• 266.7 kW
• Minimum billed demand (ratchet clause)
• (500 kW) (0.65)
• 325 kW
• Billed demand max (266.7 kW , 325 kW)
• 325 kW

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• Demand charge (on-peak season)
• (325 kW) (13.27/kW)
• 4,312.75
• Consumption charge
• (54,000 kWh) (0.03528/kWh) 1,905.12
• (fuel adjustment)
• (54,000 kWh) (0.0115 kWh) 621.00
• Total consumption charge 2,526.12
• Customer charge 151.00

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Total charge before sales tax

• 4,312.75 2,526.12 151.00 6,989.87
• Sales Tax
• 6,989.87 (0.06) 419.39
• Total
• 6,989.87 419.39 7,409.26
• Ignoring franchise payment and late charges.