Determine the per unit (or per kWh) cost of production of electrical energy
Economics on Power Generation
Elements (4)
- Fixed Elements
- Energy Elements
- Customer Elements
- Investors Profit/ROI
Used to start the enterprise
Fixed Elements
Sometimes called running cost, operating expenses to generate power/energy.
Energy Elements
Cost to bring power to users/customers
Customer Elements
Fixed Elements (5)
- Power Plant Lands, Bldg. Structures, Etc
- Primary Distribution Lines, Substations including supports
- Management, Administrative Staff
- Depreciation
- General Maintenance, required whether the plant is operational or not
Energy Elements (4)
- Fuel
- Labor or Operation
- Facilities, Water, Oil
- Maintenance required when the plant is in operation only
Customer Elements (4)
- Secondary Distribution System, including service drops and meters
- Personnel for Lines, meter readers, collection of bills
- Advertisements
- Franchise
Fixed Elements are dependent on ___________.
the size of the enterprise
Energy Elements are dependent on ____________.
the volume/level of generated kW or kWh
Customer Elements are dependent on ___________.
the number of customers
Rate at which electric energy is supplied to a customer
Rate (or Tariff)
Types of Tariff (7)
- Uniform Rate Tariff
- Flat Rate Tariff
- Block Rate Tariff
- Two-part Tariff
- Maximum Demand Tariff
- Power Factor Tariff
- Three-part Tariff
Fixed rate per kWh
Uniform Rate Tariff
Where different types of consumers are charged at different uniform rates.
Flat Rate Tariff
Also called “room rates” when a block of energy is charged at a specified rate and the succeeding blocks of energy are charged at progressive reduced rates.
Block Rate Tariff
Also called “2-charge rate” change on the basis of maximum demand of the energy consumed.
Two-part Tariff
Similar to 2-part Tariff with only difference is that the maximum demand is actually measured installing a maximum demand meter in the premises of the consumer. It is usually applied to large users.
Maximum Demand Tariff
Power factor of consumer’s load is taken into consideration.
Power Factor Tariff
Also called “3-charge rate” or “Doherty Rate”. Total charge is split into three rates.
Three-part Tariff
Its function is to transform electrical solar energy into electricity.
Solar Panels
Average size of solar panels.
5.4x3.25ft
Convert direct current (DC) flowing from your solar panels into alternating current (AC) your home uses.
Solar Inverter
A utility rate structure that requires your utility to purchase the excess solar energy your solar panels produce.
Net Metering
