This March of 2021, PG&E will adjust its Time of Use Periods so the most expensive time of use (or On Peak Period) occurs from 4-9 PM. This can work in a building operator’s favor, since demand costs are lower when tenants are most likely to be in the building. However, this shift also changes legacy operating plans and controls sequences for optimizing demand costs. Why? The period of highest demand for the day (typically, around noon) is less likely to be the costliest demand reading.
Here’s a load curve for a building on an E-19-P rate. Where do you think the priciest demand charge will occur?
Plotted here are 15-minute kW readings from a utility smart meter at a typical office building.
Here are some details about this scenario:
- We’ll assume this week is in the early part of the bill period.
- Due to COVID-19, the building must be deep cleaned each weeknight. For this reason, the operator turns the building back on in the evening.
- We’ll assume the building already set its Max Demand peak prior to this week. That demand charge is important for managing OPEX, but in this scenario, it can’t be changed by any demand management during this week so we’ll ignore it as a fixed cost that’s out of our control.
Understanding demand charges with the Cash Curve
Gridium models utility tariffs so that we can determine a meter’s bill based on its load curve. One benefit of these analytical capabilities is that we can plot the total demand charges over time, together with the load curve. This is like having a magic electric meter that measures cash instead of kilowatts!
The final demand costs at the end of the week are $6,088.
If you guessed that the ~265 kW peak on Monday afternoon increased demand costs the most, give yourself a bonus. On the old TOU rates, large afternoon peaks (typically, the maxima for the day) are the ones you need to avoid in order to control demand costs. In particular, notice how each weekday has a secondary demand spike in the evening, but these did not materially increase demand costs because that demand is outside the peak period.
Demand management under new rules and rates
But what would happen if this building were on a comparable new, TOU-shifted rate, B-19-P? The operator pays significantly more!
The final demand costs at the end of the week are $7,284.
Notice how the most expensive period is now within the grey-band from 4-9 PM. Demand charges during that period are more than four times the cost of other demand charges for the day ($22.95/kW versus $4.78/kW for the part-peak period). Deep cleaning the building in the evening added an additional $1.2k in demand charges, even though demand in the evening was less than the maximum demand for the week.
We’re here to help
Managing demand costs isn’t easy. To summarize, you’ll want to control two separate sources of charges:
- Maximum demand for the bill period, which you’ll manage year-round.
- Demand from 4 PM to shutdown during the Summer to avoid high On Peak demand charges, if you’re on an E-19, E-20, or similar rate.
Gridium provides a demand forecast so you can make the best use of upcoming savings opportunities. Stay tuned for updates: we’re adding capabilities to account for these new pricing dynamics. Upgrading your building is another way to unlock significant savings. Gridium Alpha provides financing for eligible buildings to replace inefficient equipment and better control demand.
