The utility has added a ratchet clause to the rate structure described in Example 2.2 . Specifically, the ratchet clause states that no billing demand shall be considered as less than 70 percent 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 industrial facility considered in Example 2.2 taking into account both a fuel cost adjustment of 0.015 /kWh and a sales tax of 7 percent.

Example 2.2

The utility has added a ratchet clause to the rate structure described in Example 2.1 . Specifically, the ratchet clause states that no billing demand shall be considered as less than the 70 percent 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 industrial facility considered in Example 2.1 taking into account the ratchet clause. Assume that the previous highest demand (during the last 12 months) is 700 kW.

Example 2.1

A utility has the following monthly billing structure for its industrial customers:

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 percent.
i. Calculate the utility bill for an industrial facility with the following energy use characteristics during a specific month:
• Actual demand: 300 kW • Energy consumption: 50,000 kWh • Average monthly power factor: 60 percent ii. Determine the cost savings achieved for the month if the facility power factor is improved to be always above 80 percent.

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a. Customer charge = $450/month b. Demand charge = $20/kW C. Energy charge = $0.03/kWh