Question 9.7: The utility has added a ratchet clause to the rate structure......
The utility has added a ratchet clause to the rate structure described in Example 9.6. Specifically, the ratchet clause states that no billing demand shall be considered as less than the 70% of the highest on-peak season maximum demand corrected for the power factor previously determined during the 12 months ending with the current month.Calculate the utility bill for the facility considered in Example 9.6 taking into account the ratchet clause. Assume that the previous highest demand (during the last 12 months) is 700 \ kW.
First, the minimum billing demand determined by the ratchet clause is calculated:
Minimum billing demand (ratchet clause)=700 \ kW*0.70=490 \ kW
Since the billing demand based on the power factor clause was found to be 400 \ kW (see Example 9.6), the billing demand for the month is
Billed demand=\max (490,400 \ kW)=490 \ kW
Then, the monthly bill can be calculated using the utility rate structure:
(a) Customer charge = \$450.00
(b) Demand charge = 490 \ kW*\$20/kW=\$9800.00
(c) Energy charge = 50,000 \ kWh*\$0.03/Wh=\$1,500.00
Total monthly charges = (a)+(b)+(c)=\$11,750.00
Thus, the ratchet clause increases the utility bill for the month.