Why Demand Charges Are Not Valid

At some point in the last 10 years, most, if not all electric suppliers,
have become unable to deliver full peak demand loads.
Rolling blackouts, brown outs, and general low voltage situations
are costing all of we consumers money.
Power companies are not building new electric plants.
They are not keeping their transmission and distribution systems
up to date. And therefore there are many times when we are not
getting the full power we are paying for.
However if you own a business, you are still paying a "Demand" charge,
which is a premium price you pay to guarantee that ALL of the power
your business needs will be there when you need it.
This simply is not the truth anymore.
And this means we are paying the demand charges for no reason.

I believe, not only should demand metering be eliminated, 
but we are all entitled to a full rebate for how ever long it 
is determined that demand charges were no longer legal.

History of Demand Metering.

Demand metering is based on the principle that the electric 
company must be able to supply the max load a business has 
used in any giving one quarter hour during the billing period.
(Demand is the maximum amount of power drawn through the meter during a specific billing period.)
It was originally justified by the utilities, because they claimed they
had to keep X number of Generators running on what is referred to as
"spinning  reserve", in case everyone needed their peak load at once.
In truth, spinning  reserve allowed the utilities to keep
a few generators on line, and get paid for it. Taking a 
generator off line for only a few hours during low load times 
costs the utility more than it does to keep it running for many reasons,
including, start up time, the complications of putting a generator back on line
and cooling and reheating is very bad for the boilers, turbines, and the generators.
So it could be said that there never really was a good reason for demand metering,  
especially for smaller businesses. 
(Large businesses are a different matter, 
but I feel they are being overcharged as well).

And for many years now, peak loads have been handled by "peaking units"
which are gas fired turbines, that can be brought on line in a matter
of minutes, by remote control, when ever they are needed. Utilities 
also use capacitor banks that can be brought on line remotely to solve
voltage problems. (Although this is the worst type of fix)

Demand charges are illegal, and should be eliminated !

Real Life example of inadequate power.

Our business, Dynamic Recording Studios, keeps very careful track
of our voltage. For the past several years we have had many problems, 
especially in the summer months. 
This summer, 2001, we dropped to 110 volts. Our normal voltage is 120 to 123 volts.
(Keep in mind, if you are running low voltage and a piece of major
equipment cuts in, weather its in you building or you neighbors,
your voltage momentarily goes way lower)

The voltages we were getting were causing our
recording equipment to malfunction, and our Air Conditioning compressors to lock up.
Low voltage causes higher current, overheating, higher demand reads, 
and thermal damage to equipment.
Our utility was not able to rectify this situation, until the temperatures in Rochester
came down. And at one point they were so low on power, they did a voltage cut back
(referred to as a brown out), which made things much worse. We actually had to
cancel a few recording sessions because of the low voltage, but we are 
still paying the excessive DEMAND CHARGES ! 


Update 05/2002

We were forced to run one of our AC units for a few hours just once during
the billing period 04/03/02 to 05/03/02.
This pushed the demand from our normal winter time usage which is 7.92
to 16.08 for an additional charge of $147.94.
----> Demand Charge 16.08 KW at $9.20 / KW = $147.94 <---_

This is NOT a fair price for using the AC for less than 3 hours. 
Especially in light of the fact we had to shut down the AC units 
last summer because the voltage was so low.



Update 08/2002

To: webmaster@rge.com
Subject: Voltage Problem Please forward to correct area. 

At my business, Dynamic Recording Studios, we keep very careful track of our 
voltage. As a recording studio we have not only the usual power requirements of 
a 3000 square foot building, like air conditioning, but a wide variety of 
sophisticated and expensive electronic recording equipment as well. 
For the past several years we have had many voltage problems, especially in the 
summer months, and in the summer of 2001, we dropped to 110 volts while our 
normal voltage is 120 to 123 volts. 
(Keep in mind that if we are receiving low voltage and a piece of major equipment 
cuts in, whether it’s in our building or any other building on the circuit, 
the voltage momentarily goes way lower.) 
The voltages we were getting were causing our recording equipment to 
malfunction, and our air conditioning compressors to lock up. 
Low voltage causes higher current, overheating, higher demand reads, and 
thermal damage to equipment. RG&E was not able to rectify this 
situation until the temperatures in Rochester came down. And at one point 
while the voltage was already too low, the RG&E did a voltage cut back 
(voltage reduction, referred to as a brown out), 
which made things much worse. We actually had to 
cancel recording sessions because of the low voltage, as well as send customers 
home from sessions that had started. 

Friday, 08/02/02 the voltage dropped to 112 volts at 1 PM. At this time the main HVAC 
compressor for the Studio stopped working. Isaac air conditioning company 
said they were swamped, and it would be a while until they could get here. 
Therefore as the studio was already up to 80 degrees, we had to shut all of 
the equipment down and send our very upset customers home. 
A lineman (Brett) came out and read 117 / 117 / 207, which he said was good! 
Of course it's not good. 
And he was reading it while the HVAC and all equipment were turned off. 

Following is the Isaac tech’s statement: 
Unit would not run, it only had 15v to contactors, not enough to pull them in. 
Unit has low voltage coming to it. Between legs 1 and 2 = 230v. 2+3 = 240v, and 
1+3=225v. Transformer is getting voltage from legs 1 and 2. Switched legs 1 and 
3 to give 240v to transformer. Unit cycled OK. Voltage problem needs to be 
addressed. 

When the voltage goes up again, this move could cause further damage to the
microprocessors that control our Trane Varitrac HVAC system. Especially if we
go to 128 volts again.

Please be aware that I will not tolerate this condition any longer. 

Insufficient power from RG&E is hurting my business. And the fluctuations 
from low to high, (sometimes we reach 128 volts) is damaging our equipment. I 
have an Isaac bill for the service call 8/2 caused by low voltage. 
I lost the income from a recording session that may not be able to be 
re-scheduled, and I still had to pay the recording engineers! Additionally, the 
time I've spent trying to get this recurring problem rectified is valuable and 
pretty much wasted when the result is that a lineman is sent to investigate a 
low voltage problem, doesn't / can't do anything, and leaves.

This must be fixed now. We are paying every month to have service that we are 
not receiving. We are still paying the excessive demand charges, and RG&E 
cannot supply the demand. I would like a written response by August 12th 
detailing how this situation is going to be rectified. 

David R. Kaspersin 
President


Dynamic Recording Studio Independent Label / Dynamic Web Pages 



RG&E responce:

Subject: Low Voltage investigation 
To: drk@dynrec.com 
X-Mailer: Lotus Notes Release 5.0.8  June 18, 2001 
From: John_Bliss@rge.com 
Date: Wed, 14 Aug 2002 06:45:30 -0400 
X-MIMETrack: Serialize by Router on HUBWA10/RG&E(Release 5.0.10 |March 22, 2002) at 08/14/2002 
 06:45:31 AM 


Dave,


I am the Electric System Planner for Greece and have investigated your low
voltage complaint from July.  Base on the charts that the Power Quality
Group has provided me, I have modeled the 4 kV circuit that feeds your
business.  The analysis shows that the voltage drops  under peak load
conditions thereby limiting load growth or contingencies.  When those
conditions exist, we must intervene to protect the system and the customers
it serves.   Based on this information I am having a set of regulators
installed on the circuit to correct the voltages on the latter half of the
circuit, that will affect your service.


I have requested an in service date of August 30. We may need to extend
this based on equipment delivery and manpower availability.  However, we'll
make every attempt to meet that date.  I have requested the Power Quality
Group to contact you once the equipment is installed.


The voltage standard that the utilities follow including RG&E ranges from
114-128 volts based on the ANSI C84.1 Standard.  This is a +/-5% deviation
of nominal.  During our  investigation of your situation, RG&E found the
utility voltage at the service entrance is within these standards.
Specifically, we noted  a 3-volt drop from the service entrance to an
outlet in your facility..  Additionally, the differences in voltage you are
noting between phases are caused by unbalanced loading of the phases.
Since you are the only customer fed from the transformer bank, your
electric load is  the cause of the unbalance.  Balancing your load should
correct the voltage imbalance.


The changes I have outlined both from RG&E's standpoint and yours should
bring the voltage at your business to acceptable levels.

=======================================================================

"Since you are the only customer fed from the transformer bank", 
however is not the case.
Two other buildings, with a total of five business 
and one apartment feed from the transformer that feeds our building.
And one RG&E tech told me the lines feeding the transformer are
very unbalanced. The regulator bank will solve our
problem, for now, BUT continued load growth, without upgradeing
the substation and lines that feed us will eventually bring the
problem back.



Update 10/10/02

The regulator bank was finally installed today.
However, it is not regulating !
Seems the person who was sent to program the controls
was giving the wrong settings.
(As I have said many times, Downsizing Does Not Work !)
Today, 10/24/02 the RG&E announced it is starting lay offs.
The regulators are STILL NOT REGULATING !
(And I have made many calls to the RG&E)
lAY OFFS WILL NOT WORK EITHER !



Update 11/06/02

The regulators finally started regulating today !
For the first time in 7 or 8 years we have normal
voltage at Dynamic Recording.
Of course no one from the RG&E called or e-mailed to let us know !




Things to which out for if you have an equipment failure.

Your  Air Conditioner, Refrigerator, Washer, etc fails during High
Ambient Temperatures. The reason may be it was over worked due
to low voltage. When the repairman arrives, have him check your voltage.
If it is low, that may be the reason it failed.
Normal Voltage is 118 to 123 volts. 
In fact when the voltage returns to normal your appliance may
start working again!

No matter where you live today, it is wise to own a volt meter, 
or a voltage monitoring devise.


More on Demand Metering.

Terms We Use
Following are key terms used by Niagara Mohawk that can help give you a 
good understanding of electric demand: 
Kilowatt (kW)—Rate of using electricity (Demand).
Example: Ten 100-watt lamps consume electricity at the rate of 
1,000 watts, or 1 kilowatt (kW). 

Kilowatt-Hour (kWh)—Electrical energy actually used (Energy).
Example: Ten 100-watt lamps, when on for one hour, consume 
1 kilowatt-hour (kWh) (i.e., 10 lamps x 100 watts x 1 hour = 1 kWh). 

Load Factor—A measure of energy use equal to the ratio of 
total kilowatt-hours (kWh) used in a given time period 
divided by the peak kilowatt (kW) use during that time, 
multiplied by the hours in the time period.
Example: Actual kWh used
                 peak kW x Time 
Load factor expresses how well or poorly a given electric 
system is being utilized. Electricity users strive for a 
better load factor, or the most efficient usage of their 
installed electric equipment. The closer to 1 a given load 
factor, the better the system's efficiency. 

The rock crusher who has high electric demand for small 
periods of time and is not a big overall electricity 
user usually will have a very low, or poor, load factor. 
The energy-efficient process line, which takes advantage 
of electrotechnologies and state-of-the-art controls, 
will likely have a much better load factor. 

While often used to measure monthly billing cycles, 
a load factor's time variable can be any desired length. 

Return to top. 


What Is Demand?
Every electricity consumer's service bill contains 
both consumption and demand charges, which can be 
compared to the overhead costs of doing business. 
Residential customers pay one rate of charges for 
electricity service, covering both consumption of 
electricity and demand. This simple, combined charge 
is possible because there is relatively little 
variation in electricity use from home to home. 
This is not the case among commercial and industrial 
energy users, whose electricity use—both consumption 
and demand—varies greatly. Some need large amounts 
of electricity once in a while; others, almost 
constantly. Complicating this is the fact that 
electricity cannot be stored. It must be generated 
and supplied to each customer as it is called for—
instantly, day or night, in extremely variable quantities. 
Meeting these customers' needs requires keeping a 
vast array of expensive equipment—transformers, 
wires, substations and even generating stations—on 
constant standby. The amount and size of this 
equipment must be large enough to meet peak 
consumption periods (i.e., when the need for 
electricity is highest). 


Utilities and public service commissions around 
the country have determined that the most equitable 
way to cover the cost of this equipment is to have 
those customers who create this demand and the need 
for power during these peak periods pay for its 
availability. <---------------------------------------------------------
For this reason, utilities spread 
the costs of this extra equipment among all 
commercial and industrial customers as a separate 
charge for demand. 

Defining Demand Customers
Niagara Mohawk installs a demand meter whenever 
a customer’s energy consumption has exceeded 
2,000 kilowatt-hours (kWh) per month for four 
consecutive months. Once demand billing begins, 
it does not end until after the monthly energy 
consumption has been less than 2,000 kWh for 
12 consecutive months. This requirement may not 
be avoided by temporarily terminating service. 
New or existing customers whose connected load 
indicates that the energy consumption will exceed 
2,000 kWh per month will have a demand meter 
installed. The demand charge will be the highest 
average kW measured in a 15-minute interval 
during the billing period, but not less than 
one kW and not less than the demand contracted for. 
Customers who do not create peaks but maintain 
a relatively level demand are known to have a 
high “load factor.” Utility pricing policies a
re designed to pass savings on to these customers. 

Comparing Demand and Consumption
On every demand-billed customer’s energy service bill, 
charges for consumption and demand are separate. 
This exaggerated example illustrates how the two work: 
Suppose you have a commercial building with lighting, 
cooling, machinery, and miscellaneous electric equipment. 
Its fully installed load totals 15 kW. You are not 
using the building and have no employees. On the first 
day of each month, you come into the building and 
turn on all electrical equipment and leave it on 
for 15 minutes. Then you shut everything off again 
and lock up the building until the following month. 
What would your electric bill look like? It would 
show very little consumption; in fact, only 4 kWh, 
at a cost of about 28 cents. (Added to Niagara 
Mohawk's basic service charge of $47.25 per 
30-day period, which includes maintenance of 
electric lines, metering and other costs such 
as meter reading and billing, the total is $47.53.) 

But what about your demand charge? At an average cost 
of $8.32 per kW and the meter reading at 15 kW 
(8.32 x 15), the demand charge would be $124.80* 
(for customers in Service Classification No. 2, Small General Service-Demand). 

Service from March 3 to April 3 
Basic service charge and electrical consumption 4 kWh $7.53 
Electric Demand 15 kW $124.80 
AMOUNT NOW DUE $172.33 


Prices in this example exclude applicable surcharges and taxes. 

Niagara Mohawk customers billed on the demand price 
who provide the transformers required to take service, 

as designated by Niagara Mohawk, have their charges 
reduced by $ .90 per kW billed. 

 Understanding Demand Metering
Much like your car's odometer records accumulate mileage, 
electric meters record consumption (kWh). Electric 
demand meters function like your speedometer—with 
an important difference. 
A demand meter's needle advances as electricity 
consumption increases, just as your speedometer 
needle advances as your speed increases in a car. 
When you stop the car, the needle moves back to zero, 
regardless of the highest miles per hour reached on the trip. 

Unlike a speedometer needle, demand meters record the 
highest average kilowatts reached and maintained 
in a 15-minute interval within the billing period. 

If within one billing cycle your demand reaches 50 kW, 
for example, and stays there for 15 minutes, the meter
 needle remains at 50 kW unless or until your demand 
exceeds that level. If your demand later reaches 
55 kW and stays there for 15 minutes, the needle 
will then stay at 55. The new index point is 
maintained, even when you are using electricity 
at below 55 kW, until the meter reader comes to 
record the demand and resets the meter back to zero. 

For example, suppose you have a 10 kW motor in one
 part of the building and a 15 kW motor in another. 
If you operate both units simultaneously, 
the demand meter will record 25 kW. However, 
if you can use the motors alternately, operating 
the 10 kW unit only when the 15 kW unit is off, 
the maximum demand reading will be only 15 kW. 
The 10 kW saved would save about $83 per month, or $996 per year. 




Click Here to learn how low voltage may be costing you money!.

Who Killed Montana Power?




Update 08/14/03 

Just 9 Seconds 

The man leading the investigation into the worst 
blackout in history says, "we will not cover up anything." 
Large parts of the U.S. and areas of Canada were plunged 
into darkness in nine seconds, and some are still without power today. 

Superpower With a Third World Grid 

Amid the blame game, former Energy Secretary Bill Richardson 
who described the United States as a "superpower with a 
Third World electricity grid" argued the problem was due 
to an antiquated infrastructure. 

"We have a huge demand for electricity with computers, technology, 
more people,
 but we have not fulfilled the infrastructure needed 
to deal with that new demand,"
 he told Good Morning America today. 
"In other words, we don't build new transmission lines. The American 
people in many regions don't want them in their backyard." 
The problem, according to Richardson, was essentially because 
almost the entire eastern seaboard was run by the Niagara-Mohawk grid, 
which, "has been overloaded for years." 
Power company officials and government regulators have tried to 
find ways to beef up the Northeast power grid for some time. 
Experts say the Northeast has been short of power supplies needed for hot days
and short of transmission lines to move that power where it's needed. 
"The power outages that we're seeing would suggest that something 
went wrong up in New York state somewhere from Syracuse north to 
the Canadian border," energy writer Bill Paul told ABCNEWS. 
"And what happened was a bunch of safety procedures went into 
play and the lines, the power, started to be cut off what you 
would call down stage. So you had an impact all the way down into Manhattan. 
You had an impact all the way out west into Cleveland and Detroit." 



Rolling blackouts possible

By Frank Bilovsky and Heather Hare 
Staff writer D&C
(August 15, 2003) — 
The Rochester area experienced one blackout 
this morning when the New York Independent System Operator
ordered Rochester Gas & Electric to cut back on a block of power, 
said Dick Marion, RG&E spokesman. 

It lasted for about half an hour and affected the northern
 part of Irondequoit, Webster and portions of the city. 

More blackouts could happen later today if the NYISO
 orders RG&E to once again cut back on blocks of power, 
Marion said. These planned outrages are called “ 
rolling blackouts” by experts. 

Customers are being asked to curtail their use of power 
voluntarily in order to lessen the possibility of ordered blackouts, 
he said. 

“ This is being done statewide,” Marion said.
 “ So to the extent that customers voluntarily cut back on their usage,
 they won’t be forced or involuntarily be cut off with these temporary service interruptions.” 

SO WHY ARE WE STILL PAYING DEMAND CHARGES ???

E-4.3 Need for the Proposed Project
During a long-term outage of the Ginna generation at a load level of 1,435 MW, subsequent loss
of the 345 kV/115 kV 462 MW transformer #5 at Station 80 will cause the Station 80 345
kV/115 kV transformers #1 and #3, and all the three Station 122 345 kV/115 kV transformers to
be at their full capacity. Thus at peak load levels reached in 2001, the system reached its full
capacity under single contingency conditions.

Two of the 345 kV/115 kV transformers (T1 and T3) at Station 80 have reached the ends of their
useful lives and are scheduled to be replaced by larger capacity units by June, 2014. T1 and T3
will each be replaced by 420 MW units, which are 204 MW larger than their current ratings. The
capacity of Station 80 will then increase to 1,629 MW. The three sources (i.e., Station 80, Station
122, and Ginna) will then provide a total capacity of approximately 2,915 MW. Subsequent loss
of Ginna generation decreases the total capability to 2,305 MW. This is approximately the peak
load that is currently forecasted to be served in 2026. Thus, with the T1 and T3 upgrades, in
2026 the system will be at its full capacity under system normal conditions.

During a long-term outage of the Ginna Nuclear Station at a load level of 1,843 MW, subsequent
loss of the 345 kV/115kV, 462 MW transformer #5 at Station 80 will cause the Station 80 345
kV/115kV transformers #1 and #3, and all the three Station 122, 345 kV/115 kV transformers to
be at their full capacity. Thus, at peak load levels forecasted for 2014, the system will be at its
full capacity under single contingency conditions.
As a result of this increased transformer capacity expected to be in service before June 31, 2014,
the forecasted need for the new BPS Station 255 and associated 115 kV transmission lines is
December, 2014.