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Demand Charges — The Hidden Cost (and dirty secret) of EV Charging for Businesses

Discussion in 'Charging Standards and Infrastructure' started by Cottonwood, Jul 5, 2015.

  1. Cottonwood

    Cottonwood Roadster#433, Model S#S37

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    Summary: Demand Charges can dominate the cost of a business offering EV charging, and the true costs can be shocking...

    Most of us are used to looking at our home electricity costs as a pure energy cost that is measured in dollars per kiloWatt-hour ($/kWh). These can vary a lot, with the national average about $0.1264 per kWh, but ranging from $0.0882 to $0.3054 per kWh. Source: EIA - Electricity Data

    Business electric costs in most places are based on energy cost ($/kWh) plus demand charges ($/kW). See What is the demand charge on my business account electricity bill? for a good explanation of demand charges. The justification for demand charges is that a large portion of the cost of producing electricity is the cost of capacity needed for peak demand, and demand charges bill for that peak demand of each account. In the U.S., this is usually measured as the average power used in the peak 15 minute period of a billing cycle and is measured in kW. Demand charges are then billed as Dollars per kiloWatt ($/kW).

    I am helping with putting in EV charging at a Community Center in Boulder, CO, and want to understand the true cost of offering charging to users of the Community Center. Xcel Energy is the electric utility in Boulder and the commercial rate tables are at http://xcelenergy.com/staticfiles/xe/Regulatory/COBusRates.pdf. Use rate SG for a large commercial account. Because there are many surcharges, taxes, fees, etc, on an electric bill, I asked a friend to get a copy of an actual commercial bill at one of the retail buildings he manages. After putting that data into a spreadsheet and matching the bill to better than a percent, I derived the actual, total, energy cost as $0.046942 per kWh and an actual, total, demand charge as $23.66 per kW.

    To get a handle on the cost per charge, cost per kWh for charging, and cost per month, I put a spreadsheet together using those energy and demand charges, based on offering 50 charges a month with each charge using 30 kWh (about 90 rated miles for a Tesla). I then compared two L2 EVSE offerings (208 Volts with 40 and 80 Amps available), a full power CHAdeMO, and for grins, a Supercharger stall. I assumed worst case that the EV charging would directly increment the max kW, Demand of the site. For hotels, this may be on the high side, because most charging is done in the evening, when other demands like air conditioning are lower, but I had to start somewhere. For places like a Community Center, there is a good chance that peak charging will happen at other peak usage times during the day.

    Below are the results. You can see the original spreadsheet and equations at Sample Xcel Electric Bill - Google Sheets

    Xcel Rates for Charging.png

    Most of the rows should be pretty obvious except the last row. Because I am looking at this charging being at a non-profit community center, "Endowment" is a measure of what size endowment would be needed, producing 5% a year, to support the cost of offering free charging.

    Notice that even for the 40 Amp J1772 case, Demand Charges dominate. At higher charger powers, the Demand Charges are huge. Running a CHAdeMO can cost over $1,000 a month and a Supercharger Stall is almost $3,000 a month in Demand Charges!!!

    Even with the proviso that these Demand Charges are worst case, I find these results shocking, and at this point, I do not plan on recommending that anything more than 48 Amp J1772 charging equipment be installed. In fact, I may recommend 30 Amp J1772 for this application. It is an in-town location, unlikely to help any long distance Tesla's. Supporting the Leaf class of EV is good, and why open the community center to a lot of excess costs.

    After doing these calculations, I certainly see why Tesla is working on Energy Storage to clip Demand Charges at Superharger Sites, and push towards the average kW usage. BTW, I have already filled out the business usage form at the Tesla web site for Tesla Energy for Business. No reply yet, but I look forward to seeing what they may offer.

    I would like to be wrong in my calculations, but have not found an error yet. Please help me find a way to save on the electric bill and still offer high power charging!
     
  2. Zarwin

    Zarwin Member

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    Disclaimer: I know next to nothing about commercial demand charges. But a demand charge of $23.66 per kw per month seems very high, even with that low kwh rate. Is there no other option for a lower kw demand and higher kwh charge?

    I know its not the same thing, but I have demand based residential service, which is probably pretty rare. I pay around $0.055 per kwh and $7.50 per kw demand.
     
  3. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

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    Of course the graph doesn't account for the charging locations with battery backup, or that special deals may have been made. Interesting none the less.
     
  4. ItsNotAboutTheMoney

    ItsNotAboutTheMoney Active Member

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    Adding up the demand charges and demand adjustments I got $20.23 for secondary service.
     
  5. cpa

    cpa Member

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    I am not surprised by your analysis, Cottonwood. Your example is only for one charging station--and two shared Superchargers. Imagine the demand charges at larger SC installations with 8-12 bays (4-6 pair.) Those demand charges would quadruple to sestuple if all were in use simultaneously and pulling the maximum. (And I bet that our demand charges here in the Golden State are higher than in Colorado!)
     
  6. Jim MacInnes

    Jim MacInnes Member

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    Have you contacted your utility and asked about the timing and frequency of the demand charges? These charges are not always applicable and often depend on system peaks. Eg. For our business, we typically have one 15 minute period each month when these charges are applicable. A $23 per kw-mo charge is pretty steep though as you point out. If you can figure out when they occur and shut off the chargers for that period using a contractor then you may be able to avoid that charge. I know this can be a moving target but often the Summer monthly peaks occur around the same time as do the winter peaks at least based on our experience. We have been doing Demand Response for years saving huge amounts of money each time.
     
  7. ItsNotAboutTheMoney

    ItsNotAboutTheMoney Active Member

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    #7 ItsNotAboutTheMoney, Jul 5, 2015
    Last edited: Jul 5, 2015
    Wow, I'd heard that Boulder liked to tax, but I think that the "Clean Air‐Clean Jobs Act Rider (CACJA)" being backdated to Medieval times is a bit excessive. :p

    OK, I've looked at your spreadsheet and:
    - You didn't say when the bill was from, but it doesn't match all the rates in the pdf you linked.
    - The current rate would be higher because
    -- You have no ESA listed (-3.35%)
    "Earning Sharing Adjustment (ESA) credit of (3.35) percent will be applied to all
    base monthly amounts as calculated under each electric rate schedule effective
    August 1, 2014" (Of course, ).
    - But GRSA is now 14.19%.

    So, it certainly looks expensive.

    For reference, Maine's medium secondary rates (20kW to 400kW) are:

    http://www.cmpco.com/MediaLibrary/3/6/Content%20Management/Suppliers%20And%20Partners/PDFs%20and%20Doc/mgss.pdf
    (Full list CMP | Pricing Schedules

    $11.72/kW July August, $10.95/kW other months
    Plus if power factor is less than 90%, $0.92/kVar above 50% of peak kW.
    Buuuuuuut, the energy charges are much higher, varying by month from $0.052/kWh to $0.0945/kWh with January and February 2016 to be determined, and this year were $0.149/kWh and $0.144/kWh.

    So, it seems that if you want to get good value out of a charger, either get high utilization or ensure you're using spare capacity. But we knew that anyway, right?
     
  8. KJD

    KJD Member

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    This kind of boggles the mind when you think about 198 charge stations here in USA that are open for use right now. How much do think Tesla is spending on demand charges nation wide every month ?
     
  9. andrewket

    andrewket 2014 S P85DL, 2016 X P90DL (soon 100)

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    Demand Charges — The Hidden Cost (and dirty secret) of EV Charging for Busine...

    This is exactly why Tesla wants to install permanent storage batteries at the SCs.
     
  10. miimura

    miimura Active Member

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    In PG&E Territory there are clear tiers of commercial usage that force you into different rate schedules, each with different demand charge rules. In the Xcel PDF you linked to, they only clearly say that Schedule C is for 25kW demand or less. What are the rules for Schedule SGL and what does "Low Load Factor" mean? Anyway, my point is that if you can set up a CHAdeMO with an account with more favorable demand charges like Schedule SGL (no Generation Demand Charge) on a separate service and you could finance the fees to set up the separate meter such that the 5 year+ cost was less, it would probably be worth doing that way. Adding a lot of demand charges and little energy charges onto an existing account may not make sense.
     
  11. renim

    renim Member

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    I thought cottonwood's analysis was quite normal, nothing exceptional

    Large users may also have a third monthly access fee to pay, so perhaps a fixed $2k per month access,+ $16 per kW,+ 0.05 per kWh. So the fees are about right.
    Charging is mostly about power fees, very little about energy fees. So its fundamentally different to say a gas station
     
  12. aesculus

    aesculus Still Trying to Figure this All Out

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    If you install a second meter just for your EV and go on TOU EV-B here are the rates:

    Total Energy Rates ($ per kWh) PEAK PART-PEAK OFF-PEAK
    Summer Usage $0.42225 (I) $0.22276 (I) $0.09952 (I)
    Winter Usage $0.28781 (I) $0.17062 (I) $0.10238 (I)
    Total Meter Charge Per Day $0.04928

    Charge after 11pm Weekdays and 7pm weekends for best rate. That's basically 10 cents a kwh which is not bad for California.
     
  13. Zapped

    Zapped Model S - PURE EV

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    In Alberta,CND residential users pay an energy charge $ / kWh + a distribution charge $ / kWh that is regulated by the Alberta Utilities commission. approx. $0.15 / kW total right now.

    Commercial users have an additional "billing demand" charge (peak demand) with a minimum charge starting at 5 kW.
    At our commercial building the 80A 208V EV charge station alone creates an additional 16kW demand. Charging for more than 15 minutes triggers this peak demand charge for the monthly billing cycle (resets at the end of the cycle) and translates into approx. $200.00 premium for the month.
    We have solar to offset this during the day but since it's a 24h public station, anyone charging on low solar output will trigger this additional charge.

    Battery backup would be a perfect solution and pay for itself in short time. The question is the system integration and the control circuitry required to have the battery kick in on a user definable peak demand setting.
     
  14. swaltner

    swaltner Member

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    Yep, demand charges can be a huge expense. While investigating EVSEs for church, I found that half of our $1,000 electric bill in the summer was for the demand charge. This would likely be for cooling the building off on Sunday mornings. That means that EV charging would be additional demand, leading to a larger demand charge. Due to the demand charge, I was looking at 30 Amp units only, enough to to recharge a vehicle in the 1-3 hours it would be parked on a Sunday morning.

    Our local commercial rates in KS are posted at https://www.westarenergy.com/Portals/0/Resources/Documents/Commercial%20Rates%20South.pdf. In their billing examples, the demand charge at $7.55-$12.50 per law comes out to 30-50% of the bill for small, medium, and large customers.
     
  15. mknox

    mknox Well-Known Member

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    A lot of utilities will account for poor power factor in the demand charge as well. Typically, they will bill on the higher of kW or (kVA*0.9).
     
  16. renim

    renim Member

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    #16 renim, Jul 7, 2015
    Last edited: Jul 7, 2015

    some rough maths

    $2k/month + $15/kW + 0.05 per kWh

    SC 10 stalls, 5 x charger at 150kW = 750kW max demand
    200 SCs in USA servicing 50,000 Tesla S, ie 250 cars per SC station

    $2k + $15x750 + $0.005 *250000
    =2000 + 11500 + 12500
    = $25,750
    or $100 per car sold!

    so in a month where the SCs are maxed out, 45% of the cost to Tesla is demand charges, 45% of the cost to Tesla is energy charges, 10% is grid access charge

    perhaps half that on a typical month, demand charges must be optimized by Tesla - ie on site battery or even battery swap

    oouch, whats wrong with these numbers?
     
  17. KJD

    KJD Member

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    Has anyone ever asked Tesla what the monthly electricity bill is?

    Any thoughts on if Renim's numbers are high or low or about right ?
     
  18. Oba

    Oba Member

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    I guess I take exception to the title. There are no secret or hidden charges; they are spelled out quite clearly. Homeowners, however, aren't normally exposed to a commercial power bill. So, familiarity is the real issue.

    Secondly, there are assumptions made that aren't correct in calculations. Most, if not virtually all commercial power demand charges start at a threshold kW, typically 20-50kW.

    Finally, the actual cost of demand charges varies widely around the country, as does electricity costs. Using generic tables of costs is surely going to be a big surprise for somebody!!!

    i recommend calling the commercial power customer service at your utility and have them step you through ALL the rates, including taxes and fees, plus fees for the meter and also for reading the meter, etc, for any vehicle charging installation you might be considering that uses commercial electrical service.

    Dont guess!!! Of course, as folks have figured out, batteries are your friends to mitigate demand charges.
     
  19. Zapped

    Zapped Model S - PURE EV

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    #19 Zapped, Oct 4, 2015
    Last edited: Oct 4, 2015
    You are correct. Shouldn't guess. Commercial demand charges at our building for example start at 4.5 kW minimum and goes up from there.

    Our problem was that we just paid the electrical bill every month without getting in to the details. Government regulated so no negotiating ... a cost of doing business.

    When the solar company sold us the 54 kW system, the math they presented never took into account the demand charge.
    The economics are therefore quite different when comparing commercial to residential.

    Commercial buyer beware. Do your home work. Buy a Power Wall for peek shaving.
     
  20. Robert.Boston

    Robert.Boston Model S VIN P01536

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    There's a reason why many Destination Chargers are stepped down to 40A, and I expect in most cases its to avoid paying the high demand charges that an 80A install could trigger. The owner of the Fore St Garage in Portland, ME has complained to me several times about the exorbitant cost when someone uses the full capacity of the CHAdeMO, which he provides free with parking. Frankly I'm surprised he hasn't limited the kW of the CHAdeMO: since the garage mostly supports commuters in the day and hotel guests in the night, a 25 kW charging rate would more than meet those needs.
     

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