| Electric rates are often complicated and the task of
comparing one rate to another is not easy. For example, some electric rates
have demand charges that are applicable to kilowatt demand while others have
demand charges that are applicable to kilovolt-ampere demand. The demand
under one rate may be determined based on 15 minute intervals while another
rate may indicate a 30 minute basis. Power factor penalties, load
aggregation, minimums, ratchets, supplements, and riders are examples of
other items that may differ from one rate to another.
When more than one rate is available to a customer, a billing analysis should be performed to determine the most favorable rate. The analysis should include the consideration of historical and anticipated changes in the customer's usage characteristics. Changes in operations which may affect the favorableness of the rate options include the addition or deletion of equipment, a change in the number of hours of operations, and changes in the time of day when electricity is consumed. Any energy management or load control efforts should also be considered. An evaluation of alternate rates should consider the potential to negotiate the rate with the provider. Even in non-deregulated areas, many utilities will negotiate rates with its customers. The rates may be negotiated for a number of reasons including job creation, job retention, encouraging a customer to shift load off-peak, retaining load that would otherwise be lost to an alternative power source such as self-generation or municipal power, increases in load, and improvements in customer's operations.
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