Factors in Determining Electrical Power Rates
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CMDFactors in Determining Electrical Power Rates
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CMDFactors in Determining
Electrical Power Rates
EFFECT OF PLANT TYPE ON FIXED
ELEMENTS
Cost of Land
Building
Equipment
Installation of Machine
Design and planning
Energy Element
Sometimes called operating cost is based on the energy output as measured in kw-
hr.
The magnitude of energy cost will be in direct proportion to the number of kw-
hr by the consumer.
Components of energy cost
Cost of fuel
Cost of labor
Cost of water
Maintenance
Tariff
- is the methods of charging a consumer for consuming electric power.
Tariff should satisfy the following
requirements:
It should be easier to understand.
It should provide low rates for high consumption.
It should encourage the consumers having high load
factors.
It should take into account maximum demand charges and
energy charges.
Types of tariffs
Straight line meter tariff
Step meter rate
Two part tariff
EFFECT OF PLANT TYPE ON
CUSTOMER ELEMENTS
Capital cost of secondary distribution system and depreciation cost, taxes and
interest on this capital cost.
Cost of inspection and maintenance of distribution lines and the transformers.
Cost of labor required for meter reading and office work.
Cost of publicity.
Cost of Franchise.
INVESTOR’S PROFIT
The rate of profit varies according to the business conditions prevailing in different
localities. In order to reduce the cost of power generation, investors must adopt the
following economic measures:
By reducing initial investment in the power plant.
By selecting generating units of adequate capacity.
By running the power plant at maximum possible load factor.
By increasing efficiency of fuel burning devices so that cost of fuel used is reduced.
By simplifying the operation of the power plant so that fewer power-operating men
are required.
By installing the power plant as near the load center as possible.
By reducing transmission and distribution losses.