Problem

An energy auditor was only provided with the prior two years of electric utility data for a facility. After studying the data, the energy auditor identified that the peak demand charges were the most significant portion of the utility bill. The monthly actual peak demand (in kW) and the rate structure for the facility are shown in Tables 1 and 2.

1. Calculate the total and monthly billed demand charges for year 2020.
2. Calculate the cost savings if it is proposed to reduce the demand in the off-peak season (November through May) by 100 kW for the next year (year 2021) from that of year 2020.
3. Repeat part (b) if the demand reduction of 100 kW occurred only in the peak season (June through October).
4. Discuss your answers for part (a) and (b).

For this problem, ratchet clause should be applied using 65% of the maximum actual demand corrected for power factor during the prior 11 months, and pf_base = 0.85 and pf_actual = 0.75.

Table 1: The monthly actual peak demand (kW).

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2019	455	505	610	675	755	920	1100	1200	895	650	605	550
2020	495	550	580	600	610	900	1150	1000	900	600	500	515
2021	?	?	?	?	?	?	?	?	?	?	?	?

Table 2: The utility rate structure.

	Off Paeak (Nov - May)	On Peak (Jun - Oct)
No. of Demand Blocks	2	2
Block 1 (kW)	75	75
Block 2 (kW)	>75	>75
Block 1 ($)	210.00	350.00
Block 2 ($/kW)	2.50	3.75