Industrial Customer Load Analysis

In some parts of the United States, utilities, energy marketers, and energy service providers are able to offer large industrial customers a variety of opportunities to reduce their operating costs through energy purchase, delivery, and operating efficiencies. In these parts of the country, the advent of deregulation and direct access, or customer choice of energy suppliers, has heightened the customers’ awareness of their energy use. Those that are eligible are seeking out and contracting with lower price suppliers. However, many customers are also taking advantage of rate options and additional products and services. EES Consulting has a successful track record of evaluating these options for large utility customers as well as assisting utilities in providing these services.

EES Consulting has assisted several BPA customers develop scenarios that illustrate the rate impacts of various new large load quantities on the utility’s existing retail customers. Bonneville’s customer utilities are asking themselves where the line should be drawn with respect to sharing the incremental costs associated with serving new or expanding large loads with the utility’s other retail customers.

Salem Electric

EES Consulting developed a model designed to educate policy makers on the pros and cons of melding the power supply costs of all future customers. In particular, the model illustrated the impact on retail rates of absorbing the costs of market-priced power that would result from the addition of a new large load. The analysis calculated the retail rate impact on existing customers assuming various wholesale market prices and sizes of new large loads. The analysis also provided analysis regarding rate policies that allow the costs of serving new large loads to be melded into the utilities’ overall revenue requirement and thus share with all customers up to a certain energy level. This concept is known as the threshold concept. Incremental power costs below the threshold are shared and incremental power costs above the threshold are directly assigned to the new large load. EES Consulting provided Salem’s decision-makers with results assuming various threshold levels. Results were summarized in multiple presentations.

Lower Valley Energy

EES Consulting provided Lower Valley Energy’s policy makers with the results of a spreadsheet model that calculated the impact on retail customers of melding the incremental power supply costs associated with serving new large loads. The Board was tasked with implementing new rate policy regarding potential new large loads. The balance between economic development and retail rate stability was included as a key variable in the decision-making process. Several options were presented to the Board that ran the spectrum from passing on all of the incremental power costs to new large loads to melding all of the incremental power costs into the retail rates of Lower Valley’s existing customers. EES Consulting helped guide Lower Valley toward a rate policy that will encourage economic development while minimizing existing retail customers’ exposure to dramatic increases in power supply costs.