HVACR designers put much effort into specifying systems and equipment that use electrical energy efficiently. To ensure you are making the right decisions when justifying the cost of improvements in system efficiency with savings to be realized on the owner's electric bill, it is important to understand the basics of electric rate structures and how utilities charge customers for electric power. This month, we will review the basics, and in the next column we'll discuss some rate options that can provide savings opportunities for your clients.
Energy charges are applied to each kWh consumed by building equipment. A system that consumes 100 kW and operates 2,400 hours per year at a rate of $0.35/kWh would generate an annual energy cost of $8,400. Under some rate structures, the energy charge may vary with the time of day, the month of the year, or based on incentives that the utility and/or the public regulatory agency wish to promote.