In our current economic climate, there is a tendency for companies to clamp down on finance. One area that always remains attractive no matter the financial climate is cutting costs. The greater the savings and the lower the costs to implement, the more attractive the plan.
Electrical metering totalization is just such an area. In short, most if not all electrical bills include a fee for “peak demand” which is the peak usage during any one billing cycle – usually a month. This charge is intended to cover the utilities costs of maintaining a particular sized infrastructure to support the facilities maximum needs. Demand charges vary but for the purpose of this article we’ll use a figure of $13.00 per kilowatt which is fairly common.
Let’s say a facility has two electrical services with two electrical bills each month.
Service #1 has a peak demand of 1,000 kilowatts which @ 13.00 per kilowatt = $13,000.00.
Service #2 has a peak demand of 800 kilowatts which @ 13.00 per kilowatt = $10,400.00.
The total demand charges for both services would be $23,000.00. Note: This demand charge is in addition to the kilowatt-hour charge for the amount of energy used.
By totalizing the two services we are creating one account and one metering system. This can be done by either physically interconnecting the metering systems with new wiring or virtually by the utility combining the meter reads in software. No matter the method the results would be the same. By combining the two meter reads the peak demand will almost always reduce and usually by a significant amount. Here’s how it works using same numbers from the above example.
Service #1 peak demand = 1,000 kilowatts. Service #2 peak demand = 800 kilowatts.
The total peak demand should be 1,800 kilowatts.
But service #1 and service #2 do not peak at the same time and that is the key. With the meters totalized the peak demand becomes the peak of the sum of both meters at any given time through the month. The chart that follows should help illustrate the point.
Time of day | Service #1 (Kilowatt demand) | Service #2 (Kilowatt demand) | Sum of both Services |
9:00 am | 350 | 400 | 750 |
12:00 pm | 1,000 | 250 | 1,250 |
3:00 pm | 650 | 800 | 1,450 |
6:00 pm | 750 | 300 | 1,050 |
Notice that the new peak demand (in bold type) is 1,450. That is a reduction of 350 from the original 1,800 kilowatts. 350 kilowatts @ $13.00 = $4550.00 savings per month. That is $54,600.00 per year. Not a small amount of money. If one could pull this off for $50,000.00 or less that would be less than a one-year payback.
Bear in mind that meter totalization is limited to large multi serviced facilities with large loads. The more diverse the loads the greater the savings.