The primary goal of Cos Phi's complimentary hydro billing analysis is to help indicate the efficiency of your electrical system through the examination of the demand readings recorded by the utility meter over a historical period of time (usually 12 months). In almost all cases demand billing charges are determined by power factor (PF=kW/kVA), which determines which readings rates are applied to.
Though each utility have their own rates structures the majority tend to follow what's commonly called the 90% billing method. In this type of billing, demand rates are applied to either 100% of the kW reading or 90% of the kVA reading, whichever is greatest.
The point at which the Power Factor falls below 90% (0.9) is also the point where kVA readings become larger than the kW and thus rates are applied to that reading and generating an avoidable cost (or penalty) which can be eliminated by increasing the power factor above the 90% threshold through the application of appropriate correction equipment.
The purposes of our hydro billing analysis:
- To show historical demand usage as seen by the utility meter over a historical period of time (preferably 12 months).
- To determine the electrical systems power factor as seen by the utility meter.
- To calculate avoidable costs that were incurred due to poor power factor during the billing periods covered.
- To determine a baseline correction size (when required) to bring the facility electrical systems power factor above the threshold where extra costs can be avoided. It can also be used to determine a correction size required for any given power factor goal above that threshold (i.e. if a higher power factor is desired).
- To forecast future annual savings potential that can be realized by correcting the power factor based on the most current hydro billing structure and rates.
When investigating whether power factor correction is needed in your facility this is the very first step you should take as it will clearly indicate whether there is a need and quickly allow you to determine a baseline ROI so that you can then decide whether this is a project worthy of your attention immediately or whether it is one you can plan for in the future.
While a calcuable ROI is important when looking at a project there are uncalculable savings that cannot be determined immediately through the application of power factor correction equipment. Such additional savings can be derived from some of the following:
- Increased System Capacity, allowing for increased expansion without the need to upgrade services.
- Reduced unplanned downtime due to power quality issues
- Extended lifespan of equipment due to better power quality (i.e. motors run cooler)
- Lower line costs in the system
All the above have a direct affect on the bottom line and can greatly reduce the initial percieved ROI of a project.