Question 9.6: A utility has the following monthly billing structure for th......
A utility has the following monthly billing structure for their commercial customers:
• Customer charge: $450/month
• Demand charge: $20/kW
• Energy charge: $0.03/kWh
A power factor clause states that the billing demand, upon which the demand charge is based, shall be the actual demand for the month corrected for the power factor by multiplying the measured actual demand by 80 and dividing the product by the actual average power factor expressed in percent. The power factor clause applies whenever the average monthly power factor is less than 80%.
(i) Calculate the utility bill for a facility with the following energy use characteristics during a specific month:
(a) Actual demand: 300 \ kW
(b) Energy consumption: 50,000 \ kWh
(c) Average monthly power factor: 60%
(ii) Determine the cost savings achieved for the month if the facility power factor is improved to be always above 80%.
(i) First, the billing demand for the month is determined using the power factor clause since the average power factor is below 80%:
Billed demand = Actual demand*\frac{80}{pf}=300*\frac{80}{60}=400 \ kW
Then, the monthly bill can be calculated using the utility rate structure:
(a) Customer charge=\$450.00
(b) Demand charge=400 \ kW*\$20/kW=\$8000.00
(c) Energy charge=50,000 \ kWh*\$0.03/Wh=\$1,500.00
Total monthly charges =(a)+(b)+(c)=\$9950.00
The actual bill may include other components such as fuel adjustment cost and sales taxes.
(ii) The cost savings from improved power factor are due to a reduction in the billing demand. Indeed, the billing demand for the considered month will be the actual demand (i.e., 300 kW). Thus, a reduction of 100 kW in the billing demand can be achieved resulting in a reduction in demand charges of:
Cost savings=100 \ kW*\$20/kW=\$2000/month
The reader is referred to Chapter 2 for a more detailed description of power factor improvement measures.