D - Farming, Sai WHAT ARE YOU PAYING FOR WHEN YOU BUY ELECTRICITY? Dennis E. Buffington Professor Agricultural and Biological Engineering Department When you pay your monthly electricity bill, just what are you paying for? The answer is easy you’re paying for the electricity to pro vide light in your poultry houses and to provide all the power you need for the equipment in your houses. Let’s examine just what you are paying for. • Generation charge. You’re paying for the generation of the electricity, whether the electricity is generated from energy in coal, oil, natural gas, nuclear fusion, flowing water, biogas digesters, or wind. • Transmission charge. The transmission of electricity is the Lancaster Farming ✓Check Out Our Web site www.lancasterfarming.com BM TRUCKS & TRAILERS 1999 city from the generation site to the substation. • Distribution charge. The dis tribution of the electricity begins at the substation where the high voltage electricity is transformed into much lower levels of voltage. Then the electicity is transferred via wires on wooden poles or in underground cables to companies, farms, and communities. The dis tribution charge includes charges for local service to maintain the distribution infrastructure and to restore service after storms and accidents. Also included are ex penses for meter reading, billing, and other customer services. • Demand charge. The demand charge is undoubtedly the least understand charge included on the utility bill. First, let me point out that residential customers do not receive itemized demand charges only commercial and industrial customers need to pay itemized demand charges. The rest of this article will focus on explaining the demand charge and how you can reduce this charge through an ef fective demand management pro gram. The demand charge is based on your peak demand for electricity in a 15-minute or 30-minute inter val within the 720 hours (or so) of the month. Let’s say that your peak demand during the 30-min ute interval of each day of the month is 175 kW (kilowatts). But for just 30 minutes for one day, the demand shoots up to 275 kW. These are not realistic numbers! The demand charge for this scenario will be based on the de mand of 275 kW, even though the average demand is much lower. Since demand charges can be as high as $8 per kW per month, you could pay an extra $BOO that month for the spike in electrical demand for one day. What’s worse, with some utility compan ies, you will actually pay a penalty in succeeding months for that one day when things got out of con trol. But why are you charged so much for a demand charge? The demand charge is levied to assess you for the capacity that the local utility company needs to maintain to serve your needs. For this parti cular example, the utility com pany needed a capacity of 275 kW to serve your electrical needs for one month, even though you need ed that full capacity for just 30 minutes of the month. Some people refer to the de mand charge ($/kW) as a “capa city charge” and the electricity charge (cents/kWh) as an “energy charge.” By implementing an energy conservation program, you can lower your energy charges. By implementing a demand manage ment program, you can lower your demand charges. ftUY. SELL. Tfl ADC Oft At NT THROUGH THE PHONE. 717-626-1164 or 717-394-3047 FAX 717-733-6058 Mon.. Tue*.. Wed . Fri 8 AM to 5 PM Thura 7 AM to 5 PM Ujl CONSTRUCTION EQUIPMENT 1992 Skytrac 6036 Forklift, 4WD, 6000# 36’boom, #6193 Cat 416 Loader Backhoe, 2WD, Cab, Ex., #6lBl 1976 Case 580 C Loader Backhoe, 2WD, Can, Std., #6133 1984 Case 580 E Loader Backhoe, 4WD, Can, Ex., 5000 hrs., #6028 1987 Case 580 K Loader Backhoe, 2WD, Cab, Ex., 7045 hrs., #6172 1987 Case 580 K Loader Backhoe, 4WD, Cab, Ex., #6llB 1988 Case SBOK Loader Backhoe, 4WD, Cab, Ex., #5BBB 1989 Case 580 K Loader Backhoe, 2WD, Cab, Ex., 5650 hrs., #6074 1996 Case 580 L Loader Backhoe, 4WD, Cab, Ex., 1200 hrs., #6194 1996 Case 580SL Loader Backhoe, 4WD, Cab, Ex., 1800 hrs., #6212 1987 CDS 71 5 D Loader Backhoe, 2WD, Cab, Std., 6000 hrs., #6209 1989 Bobcat 743 Uniloader, Aux. Hyd , Drt. Bkt., Forks, 1900 hrs., #6204 1994 Case 1840 Uniloader, Aux. Hyd., Drt. Bkt., 3000 hrs. #6205 1995 Case 1840 Uniloader, Aux. Hyd., Drt. Bkt., 850 hrs., #6211 1989 Case 1845 C Uniloader, Aux. Hyds., Ut. Bkt., #5182 $12,500 1990 Case 1845 C Uniloader, Hi Flow Hyds., Planer, 1600 hrs., #5675 $16,500 1983 Case WIBB Wheel Loader, 4WD, GP Bkt., #6191 Vernon E. Stup Co. 5859 Urfoana Pike, Frederick, MD 21701 To reduce demand charges, you need to manage your electrical loads so that you avoid the high peaks in your electrical usage. The key is to avoid stacking the large electrical loads on top of each other, thus creating the spikes in electricity usage. The large elec tricity users on poultry farms are lights, ventilation fans, feed grind ers and mixers, pelletizers, feed and egg conveyors, and egg refrig eators. Care must be exercised to ensure that these electricity hogs are not running simultaneously unless necessary for sound man agement of your poultry opera tions. Although you are interested in reducing your demand charges and your total electricity bill, you must place higher emphasis on in creasing your profitability and net cash flow. Therefore, you must fo cus on using the optimum amount of electricity (and other forms of energy) to increase profitability. Managing electrical demand is a 24-hours-per-day, seven-days per-week activity. Therefore, it become prudent to consider devel oping a demand management pro gram that can be easily understood and implemented by others in volved in your poultry operation, or you may consider investing in a computerized demand manage ment control system. Again, the emphasis is on increasing the profitability of your poultry enter prises. With the advent of the deregu- 301-663-3185 ■ M CONSTRUCTION EQUIPMENT 1155 D Case track loader, excellent condition, no leaks, used everyday, $26,000. (570)799-0715. 185 CFM portable diesel screw compressor, engine rebuilt w/warranty, $3BOO. 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(610)856-1213. $18,900 $19,900 $21,500 FORKLIFTS 2,0001015,000 LB. $2,000 & upwards GAS/LP-DIESEL-ELECTRIC Cushion-Pneumatic-Rough Terrain New Komatsu Forklifts Available PA INDUSTRIAL EQUIPMENT (610) 369-9778 $21,500 $23,500 $41,500 $41,900 $14,900 $10,500 $11,500 $15,900 $16,500 lation of electricity generation in Pennsylvania, poultry producers have the opportunity to select the company that is responsible for the generation and the transmis sion of the electricity that they consume. When shopping for electricity suppliers, you obvious ly need to inquire about their charges for generation and trans mission and charges for demand. In this new deregulated en vironment, many suppliers are not charging for demand per se. In stead they may place a higher pice on the electricity that you use for certain hours of the day when electricity is in greatest de mand, generally from 8 a.m. to 6 p.. In that case, you will need to figure out how to shift some of your electrical loads to the cheap er periods of each day. Keep in mind that you will al ways be connected to your local utility company for distribution of electricity and customer services. You need to inquire what the de mand charge is with your local company and what the demand charge will be if you select a dif ferent supplier of electricity. Poultry producers have many challenges to survive in the in creasingly competitive poultry in dustry. A producer can increase the profitability of the poultry operation by learning how to pur chase and use electricity in an op timal manner. 580 Super E Case Back hoe 1983, 3520 hrs., good condition $15,500 814-355-7368. 78 QMC vac truck 6V92,9 speed, 44 rears W/3.000Q pressure vac tank + pump $12,500. 73 12 ton tag-a long rebuilt suspension, electric brakes, good tires $1,500. Ridged + Green L e e pipe tools cut bend & thread to 4’ pipe $1,500. 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Significant historical Pennsylvania newspapers