evan berger director of energy solutions calmac ...€¦ · calmac mfg. corp. 2014 © 1 evan berger...

CALMAC Mfg. Corp. 2014 ©

1

Evan Berger Director of Energy Solutions

CALMAC Manufacturing Corp. Fair Lawn, NJ

November 2014 [email protected]


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.


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


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.


7

Utility Demand is $5.89/kW

monthly in this bill.


8

Grid Demand is $4.03/kW each month,

but the kW is calculated differently.

As of June 1, 2014, Capacity prices increased 5x.


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


ComEd Commercial Delivery Class Energy (usage):

Day: $0.040/kWh Night: $0.040/kWh

Demand: $9.90/kW/Month How big an effect is the Demand Charge??

Energy is 62% less expensive at night

$0.040/kWh

$0.100/kWh


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 = $0.04 + $0.06 = $0.10/kWh


U$lity Demand is based off of the peak interval

(15 or 30 minutes) in a given billing period

12

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


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


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


The 5CPs almost always occur during Summer aDernoons

15

5CP Chart, 2009-2013

2013 2012 2011 2010 2009

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.


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 $5.89 6 $35.34

PJM Capacity* $4.03 12 $48.36

TOTAL $9.92/kW $83.70/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.


18

•  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

Results derived by Trace700


•  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

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.


22

Daytime

$ 3.99/gallon

Nighttime

$ 1.59/gallon


23

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

[email protected]

evan berger director of energy solutions calmac ...€¦ · calmac mfg. corp. 2014 © 1 evan berger...

Documents