There is an entire industry growing around commercial power management. Throw in solar and there is a potential for unprecedented control of your business’ use of electrical power. One of the items that the home owner does not need to be concerned with is demand charges.
Peak Demand Electricity
The electrical utility must provide infrastructure to supply power during peak demand hours; transformers, substations and generating stations. These are designed to provide the power needed during high demand cycles but are on standby most of the time. This constitutes a major expense in purchasing the machinery and the maintenance providing effective operation when needed. It may be standby power production but must be operated at high reliability levels during peak power usage and the maintenance is expensive.
Electricity Demand Charges
The way the utilities recoup some of these expenses is ‘demand charges’ for commercial operations. These demand charges subsidize the standby capability of the company. The commercial power meter samples the power usage and the demand charges are based on the highest 15-minute average usage over a given month. If your company utilizes power management effectively and consistently maintains your power usage at or close to that level over the month, the demand charges will generally make a smaller portion of your electrical bill. Your bill is divided by kWh or kilowatt hours used and is charged so much per kWh, say in the 11-14 cents per kWh. But demand charges are more likely based on $8-10 dollars per kWh. You are charged at that rate for every kWh hour over your 15-minute peak consumption.
Peak Power Demand Calculation
Most commercial users pay between 10% demand charges or higher. When it exceeds half your power bill, it is time to rethink how you’re using power as higher usage is a huge expense with little effective value to the commercial enterprise. Since peak usage is averaged across the month and power usage over the peak impacts the power bill disproportionately. Take a manufacturing company. They shut down for the weekends and then fire it up the next Monday. While down they conduct their maintenance and repair over the weekend. For 15 minutes each Monday you burn up over a 25 kWh for machinery startup four times a month for 100 kWh over peak, at $800 (100 kWh * $8.00 per hr.) That is a big bill that contributes nothing to the manufacturing process. The closer to the peak you run without going over the better your bottom line.
Reducing Peak Demand Charges
There are technologies that are becoming attractive to the commercial power consumer. Most businesses run their operations during the day time. Solar is a power source that has matured to the point it becomes a viable option. Coupled with battery storage it allows for the ‘capture’ and storage of electrical power to be eased into the system at high demand, diminishing your peak power rating. Sometimes power management can result in lowering demand charges, but this may entail more than a technological solution. In some cases, procedures and work flow can be modified to decrease peak power use. Technology solutions include buying energy efficient appliances and machinery. Downsize equipment to fit the job allows for more efficient use of your energy consumption. Larger equipment burns more power and effects the efficiency of the job. Invest in a commercial solar power energy system. However, a cloudy day can cause a spike in power consumption and entail the higher demand charges. Commercial investment in a commercial sized energy storage system will aid in keeping peak power usage under your demand charge usage. These are large scale battery clusters and teamed with smart management system can help level the power usage.
Power & Energy Management & More in Arvada, Aurora, Black Hawk, Boulder, Broomfield, Centennial, Central City, Cherry Creek, Cherry Hills, Commerce City, Englewood, Golden, Greenwood Village, Highlands Ranch, Lakewood, Lafayette, Littleton, Parker, Thornton, Westminster, Wheat Ridge & Greater Denver, CO | Jefferson & Gilpin County, Colorado
Chart your usage and have your site monitored for power usage to be able to construct a plan and the most efficient way to tackle the problem. In combination, these tools, techniques and hardware/software combos can save a company thousands of dollars per year. The money will contribute to bottom line pushing in higher into the black. Many of these solutions may pay for themselves in a decade or less. Call Advanced Electrical Solutions Corp for an electricity audit and custom plan to reduce your peak demand charges.
