A company has contacted you regarding their rate schedule. The company is on the rate schedule defined in Problem 9.11 as service level 3 (secondary service), but are near transmission lines and so can accept service at a higher level (service level 1) if they buy their own transformers. Assuming they consume 300,000 kWh/month and are billed for 1,000 kW each month, how much would they save by owning their own transformers. Ignore any charges other than demand and energy.

Problem 9.11

Service level 3:

(a) Customer charge: \($110/bill/month\)

(b) Energy charge: \($0.028\) applicable to all kWh/month

(c) Demand charge applicable to all kW/month of billing demand:
(i) On-peak season: \($450.00\) for first 75 kW or less, and \($4.90/kW\) for all additional kW (ii) Off-peak season: \($290.00\) for first 75 kW or less, and \($3.30/kW\) for all additional kW