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Electrical Systems: Purchase Transformer

Transformers reduce voltage. Most utilities offer primary rates for customers who own the transformer at the electrical service. The primary rate typically offers a discount over the secondary rate for customers where the utility owns the transformer. In our experience, it usually becomes cost effective for a customer to purchase and maintain a transformer when the customers average electrical demand is about 1,000 kW or more. In general transformers cost about $10 per kVA, plus wiring, disconnects and controls. Two quotes are shown below: Your utility has quoted a price of $30,000 to purchase the two 1,500 kVA transformers. Since your transformers and all switch gear and wiring is in place, we estimate that your cost would be about $30,000. A new 1500 kVa, 12.47kV/480/277 volt transformer could be purchased today for about $15,000. Figure a day with a three man crew to install at about $25/man-hour (includes truck). Examples follow: AR 4554: PURCHASE TRANSFORMERS AND SWITCH TO PRIMARY RATE Resource Electric Fees Maintenance Net Annual Savings CO2 (lb) Dollars $13,000 -$1000 $12,000 Project Cost Simple Payback

$15,000

15 months

Analysis Currently, your electric utility owns and maintains your transformers for your electric operation. Your electric rate schedule depends on who owns and maintains the transformers. If you were to purchase and maintain the transformers, you would move from a "Secondary" to a "Primary" service rate and save about $13,000 per year from lower utility bills. Recommendation We recommend that you contact your utility and inquire about purchasing the transformers. In addition, we recommend that you contact a heavy equipment contractor to find out how much a maintenance contract for the transformers would cost. You could then refine our estimate of savings and make better decision about purchasing the transformers.

Estimated Savings Using last year's electricity consumption data (and assuming a 85% power factor) and published rate schedules for primary and secondary service, we estimate that your annual electricity bill would be about $13,000 per year less if you owned the transformers. Assuming that a maintenance contract could be purchased for $1,000 per year, annual savings would be about $12,000 per year. Consumptio n Consumpti (kWh/perio on Days d) (kWh/day) 31 345,440 11,143 31 307,040 9,905 28 347,360 12,406 31 407,680 13,151 30 454,080 15,136 31 506,400 16,335 30 560,000 18,667 31 489,440 15,788 31 459,200 14,813 30 411,520 13,717 31 400,160 12,908 30 308,640 10,288 13,690
Cost Billed Load Cost (calculated, Deman Facto ($/period primary d (kW) r ) Power Factor rate) Savings 792.0 0.59 $19,060 85% $ 18,536 $524 800.0 0.52 $18,353 85% $ 17,436 $918 960.0 0.54 $21,465 85% $ 20,485 $980 960.0 0.57 $22,751 85% $ 21,684 $1,068 1024.0 0.62 $24,642 85% $ 23,505 $1,137 1136.0 0.60 $27,334 85% $ 26,118 $1,215 1152.0 0.68 $29,083 85% $ 27,409 $1,674 1104.0 0.60 $26,855 85% $ 25,576 $1,278 1040.0 0.59 $25,288 85% $ 24,061 $1,227 1040.0 0.55 $24,239 85% $ 23,090 $1,149 880.0 0.61 $21,737 85% $ 20,611 $1,127 976.0 0.44 $21,074 85% $ 20,094 $980 $281,88 Total 988.7 0.58 1 savings ------> $13,277

Date 1/1/97 2/1/97 3/1/97 4/1/97 5/1/97 6/1/97 7/1/97 8/1/97 9/1/97 10/1/97 11/1/97 12/1/97

Tot/Avg 365 4,996,960

Estimated Implementation Cost We estimate that your transformer capacity is about 1,500 kVA. In general transformers cost about $10 per kVA, plus wiring, disconnects and controls. Since your transformers and all switchgear and wiring is in place, we estimate that your cost would be about $15,000. Estimated Simple Payback Simple Payback = $15,000 cost / $12,000 /yr savings x 12 mo/yr = 15 months AR 3354: CONSIDER PURCHASING ELECTRIC TRANSFORMERS Annual Savings Resource CO2 (lb) Electric Fees Dollars $18,000 Project Cost $30,000 Simple Payback 20 months

Analysis Currently, your electric utility owns and maintains the two transformers for your electric operation. Your electric rate schedule depends on who owns and maintains the transformers. If you were to purchase and maintain the transformers, you would move

from a "Secondary" to a "Primary" service rate and save about $19,000 per year from lower utility bills. Recommendation We recommend that you contact your utility and inquire about purchasing the transformers. In addition, we recommend that you contact a heavy equipment contractor to find out how much a maintenance contract for the transformers would cost. You could then refine our estimate of savings and make better decision about purchasing the transformers. Estimated Savings Using last year's electricity consumption data (and assuming a 90% power factor) and published rate schedules for primary and secondary service, we estimate that your annual electricity bill would be about $19,000 per year less if you owned the transformers. Assuming that a maintenance contract could be purchased for $1,000 per year, annual savings would be about $18,000 per year. Estimated Implementation Cost According to management, your utility has quoted a price of $30,000 to purchase the two 1,500 kVA transformers. In general transformers cost about $10 per kVA, plus wiring, disconnects and controls. Since your transformers and all switch gear and wiring is in place, we estimate that your cost would be about $30,000. Estimated Simple Payback Simple Payback = $30,000 cost / $18,000 /yr savings x 12 mo/yr = 20 months AR 5: CONSIDER PURCHASING ELECTRIC TRANSFORMERS Present $222,017 /yr 0$ Recommended $213,017 /yr $1,000 /yr 0 Annual Savings $9,000 /yr -$1,000 /yr $8,000 /yr $17,000 26 months

Elec. Costs Maintenance Net Implementation Cost Simple Payback

Analysis Currently, your electric utility owns and maintains the two transformers for your electric operation. Your electric rate schedule depends on who owns and maintains the transformers. If you were to purchase and maintain the transformers, you would move from a "Secondary" to a "Primary" service rate and save about $9,000 per year from lower utility bills. Recommendation We recommend that you contact your utility and inquire about purchasing the transformers. In addition, we recommend that you contact a heavy equipment contractor to find out how much a maintenance contract for the transformers would cost. You could

then refine our estimate of savings and make better decision about purchasing the transformers. Estimated Savings Using last year's electricity consumption data (and assuming a 90% power factor) and published rate schedules for primary and secondary service, we estimate that your annual electricity bill would be about $9,000 per year less if you owned the transformers. Assuming that a maintenance contract could be purchased for $1,000 per year, annual savings would be about $8,000 per year. Estimated Implementation Cost Your peak demand during the last year was 928 kW. Assuming some room for growth, and 25% additional capacity for insurance, we estimate that you need about 1,500 kVA of transformer capacity. The cost of tranformers varies widely. The current transformers might be purchased directly from the utility or new ones could be purchased from independent suppliers. In general transformers cost about $10 per kVA, plus $2,000 for wiring, disconnects and controls. Thus, we estimate the cost of purchasing the transformers would be about: [1,500 kVA x $10 /kVA] + $2,000 = $17,000. Estimated Simple Payback SP = $17,000 (first cost) / $8,000 /yr (savings) x 12 mo/yr = 26 months