PART I – Regulatory Parameters for Electric Utility Companies and their clients
- Recorded demand
Maximum integrated (in a month) kW (usually calculated 15-min-intervals) recorded by the local utility meter
- Contracted demand
The value established by contract, designated in kW. It may be a fixed value or a ratchet (a % of the maximum recorded demand, usually in 1 year) – depending on each local utility company. - Billing demand
The highest between the recorded demand and the contracted demand - Demand charge
Typically, the kW demand charges (known also as “wire fees”) account for 20% to 30% of the electric power bill. The balance is the kWh energy consumption. - Demand Flexibility Exchange (DFE)
The proposed internet-based platform, to be sponsored by the local electric utility company, that will allow energy users (that contract kW demand) to exchange their kW contracted differences. - Proposed business
Develop the internet-based platform so that local utility companies will be able to offer value-added services to its customers charged by kW demand as well as improve their bottom-line - Value added services
By enabling customers to trade their contracted demand differences they reduce their costs - Local utility’s bottom-line
By offering this demand flexibility, the local utility improves its “load factor” meaning that they will sell more kWh with the same overall kW infrastructure - Value of the DFE
Each GW of contracted differences exchanged brings USD 250 MM of additional energy sales with the same utility’s CAPEX. - What’s the market size for DFE
Just the USA does have hundreds of GW contracted capacity. Developed nations and emerging ones could easily have more than 1 000 GW of contracted demand. - Where DFE is “appropriate”
Around the globe, because everywhere industrial, commercial, and institutional energy users contract kW demand before their local utility companies