A small machine shop, with 30 hp of connected load, purchases electricity under the following monthly rates (assume any demand charge is included in this schedule):
First 50 kw-hr per hp of connected load at 8.6¢ per kw-hr
Next 50 kw-hr per hp of connected load at 6.6¢ per kw-hr
Next 150 kw-hr per hp of connected load at 4.0¢ per kw-hr
All electricity over 250 kw-hr per hp of connected load at 3.7¢ per kw-hr
The shop uses 2800 kw-hr per month.
(a) Calculate the monthly bill for this shop. What are the marginal and average costs per kilowatt-hour?
(b) Suppose Jennifer, the proprietor of the shop, has the chance to secure additional business that will require her to operate her existing equipment more hours per day. This will use an extra 1200 kw-hr per month. What is the lowest figure that she might reasonably consider to be the "cost" of this additional energy? What is this per kilowatt-hour?
(c) She contemplates installing certain new machines that will reduce the labor time required on certain operations. These will increase the connected load by 10 hp, but since they will operate only on certain special jobs, will add only 100 kw-hr per month. In a study to determine the economy of installing these new machines, what should be considered as the "cost" of this energy? What is this per kilowatt-hour?