#### Transcript Average EP Price to Customers

```Power Factor:
What Is It and
Estimating Its Cost
Presented by:
Marc Tye, P.E.
2004 APPA Business & Financial Conference
September 21, 2004
What Is Power Factor
Apparent Power (kVA)
Reactive Power (kVAr)
Real Power (kW)
Power Factor can be either lagging (inductive) or leading (capacitive).
09142004-91100-297-2
Why Utilities Charge
For Poor Power Factor?
 Low P.F. results in increased system variable costs to
produce real power
 Losses
 Fuel Costs
 Low P.F. results in increased system fixed costs to
transmit/distribute real power
 Generators
 Conductors
 Transformers
 Capacitors
 Reactive power must be produced or absorbed to
maintain transmission voltages within acceptable
09142004-91100-297-3
limits.
Santee Cooper Uses Various
Methods to Charge for Reactive Power
Generation and Transmission Customers
 Reactive cost is included in customers’ average
embedded rates.
 Power factor penalty is charged to customers not
maintaining a 90% P.F.
Transmission Only Customers
 Reactive supply and voltage control is a required
ancillary service.
 Charge based upon the amount of power the
customer is wheeling across the transmission
system.
09142004-91100-297-4
Santee Cooper’s Industrial Power
Factor Requirement
L-96 Excess Reactive Demand Charge:
“The Customer’s Excess Reactive Demand for each Billing
Month shall be the amount, if any, by which the
Customer’s maximum 30-minute integrated reactive
demand, in kilovars (kVAr), during such Billing Month
exceeds 48.5% of the Customer’s Measured Demand, in
kilowatts (kW), for such Billing Month.”
 Equivalent to a minimum of 90% power factor by the
Customer
 Customer can correct to 90% power factor or company
will charge for excess reactive demand
09142004-91100-297-5
Industrial Reactive Demand Charge
Based on
Average Cost of Capacitor Bank
1.
Cost of 69kV, 12,000 kVAr Bank
\$255,678
Annual Costs:
2.
3.
Debt Service
O&M
\$ 49,257
4.
5.
Subtotal
CIFR
\$ 52,257
\$ 4,855
6.
Total
\$ 57,112
7.
8.
Annual Cost per kVAr
Monthly Cost per kVAr
\$
\$
4.76
0.40
(Line 6 / 12,000)
(Line 7 / 12)
9.
\$
0.43
(2 years @ 4%)
\$
0.448
(3.65%)
11. Rounded
\$
0.44
/ kVAR - mo09142004-91100-297-6
\$
(7.5% interest, 7 years)
3,000
(8.5%)
Power Factor Example
13,892 kVA
7,000 kVAr
12,000 kW
Cos
=
12,000
= 86.4%
13,892
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Example of Excess
Reactive Demand Charge
1.
Measured Demand (kW)
12,000
2.
Measured Reactive Demand (kVAr)
7,000
3.
Power Factor
86.4%
4.
Allowed Reactive Demand w/o Charge (kVAr)
5,820
5.
Excess Reactive Demand (kVAr)
1,180
6.
Excess Reactive Demand Charge
\$519.20
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Santee Cooper Open Access
Transmission Tariff
 Reactive supply and voltage control from
generation sources service is a required ancillary
service.
 Ancillary service used to maintain transmission
voltage
 Rate is based on allocated portion of the cost of
exciter and generator for each unit that produces
kVAr’s.
 Rate also includes allocated portion of the power
consumed by the exciter.
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Reactive Power Cost Summary
Generator / Exciter Costs
1. Generator and exciter fixed costs (VAr Related)
\$6,864,834
2.
Production fixed charge rate
3.
Generator and exciter costs charged to VArs
\$ 827,899
4.
Fixed O&M charged to VArs
\$ 224,589
5.
Total
\$1,052,488
Real Power Output Charged to Exciter
6. Exciter power consumption
12.06%
\$ 116,361
7.
Exciter energy consumption
\$ 158,780
8.
Total
\$ 275,141
9.
Total reactive support cost
\$1,327,629
10. Single system coincident peak (kW)
11. Monthly point to point rate (\$ / kW.mo)
3,037,000
\$
0.0364
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Example of Reactive Supply
and Voltage Control Charge
1.
Measured Point to Point Reservation (MW)
100
2.
Monthly Reactive Supply and Voltage Control
Charge (kW)
\$0.0364
3.
Total Monthly Reactive Supply and Voltage
Control Charge
\$3,640
09142004-91100-297-11
```