The industrial facility of Example 2.1 has an option of owning and operating its own service transformer with the advantage of reduced rate structure as described below:

• Customer charge = $650/month

• Demand charge = $15/kW

• Energy charge = $0.025/kWh Calculate the reduction in the utility bill during the month for which the energy use characteristics are given in Example 2.1 . In the savings calculation, do not consider the power factor clause, ratchet clause, sales tax, or fuel cost adjustment.

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