1. www.myronzucker.com 2008 DTE/ESD Energy Conference and Exhibition Energy Efficiency Implementation Case Study Power Factor Correction Case Study -Power Overview - Power Factor Penalties -Case Study May 6, 2008

2. www.myronzucker.com What is Power Factor Power Factor is a measure of how effectively power is used Active Power Reactive Power Apparent Power Active Power – Performs the work Inductive loads require two types of power to operate: Reactive Power – Maintains the electro-magnetic field Apparent Power – Vector sum of Active and Reactive power

3. θ www.myronzucker.com Active Power Apparent Power Reactive Power Power factor is the ratio of active power to apparent power What is Power Factor Vector summing power kW kVAr kVA kW kVA = pfcos θ = pf kW kVAr = θ arctan 90˚ Power factor is the ratio of kW to kVA

4. www.myronzucker.com What is Power Factor Perfect Power Factor kW kVAr kVA kW kVA = 1cos 0 = 1 kW 0 = 0 arctan kVAr = 0 θ Unity Good Power Factor = 0< 32˚ >.85cos θ >.85 kW kVAr < 32 Poor Power Factor kVAkVAr <.85cos θ <.85 > 32˚ > 32 No Penalty Penalty The Difference

5. www.myronzucker.com Power FactorPenalty.850 and higherNone.800 to.8491%.750 to.7992%.700 to.7493% <.70025% Penalty is applied to all metered quantities Power Factor less than.700 is not permitted and corrective equipment must be installed. 25% penalty applied after two consecutives months below.700 Example of DTE penalty rates (issued January 1994) Power Factor Penalty

6. www.myronzucker.com Power Factor Penalty The Utility CompanyYour Facility The Mechanics of Power = kW = kVAr

7. www.myronzucker.com 400 kW 300 kVAr Power Factor Penalty 500 kVA Power Factor =.80 1% Penalty The Utility Your Facility The Mechanics Without CapacitorsThe Mechanics With Capacitors 100 kVAr 200 kVAr 447 kVA Power Factor =.89 Your Capacitor Bank Catches and stores the kVAr before it gets back on to the utilities grid

8. www.myronzucker.com Charges for 03/22/2008 through 04/19/2008 Power Supply Charges: Power Supply Demand1,080KW@$ 10.93(See 1 Above) 11,804.40 Power Supply Energy: Power Supply Energy653,047KWH@$.0236400Per Total KWH 15,438.03 Off-Peak Discount480,247KWH@$-.0030000-1,440.74 Surcharges: Regulatory Asset Recovery Surcharge653,047KWH@$.0008980Per Total KWH 586.44 Power Supply Cost Recovery Factor653,047KWH@$.0086900Per Total KWH 5,674.98 Sub Total: 32,063.10 Delivery Charges: Service Charge 275.00 Distribution: Distribution Demand -PV1,080KW@$4.55(See A Above) 4,914.00 Distribution Energy -PV653,047KWH@$.0070300Per Total KWH 4,590.92 Surcharges: Nuclear Decommissioning653,047KWH@$.0012340Per Total KWH 805.86 U-14838 Rate Reduction Credit653,047KWH@$-.0020410Per Total KWH-1,332.87 Securitization Bond Charge653,047KWH@$.0036600Per Total KWH 2,390.15 Securitization Bond Tax Charge653,047KWH@$.0012100Per Total KWH 790.19 Choice Implementation Surcharge653,047KWH@$.0005000Per Total KWH 326.52 Sub Total: 12,759.77 Invoice Subtotal 44,822.88 3% Power Factor Penalty Based On 0.746 Power Factor 1,336.44 Power Factor Penalty Example of DTE Utility Bill

9. www.myronzucker.com kWH = 1,235,920 kVAH = 1,656,668 Detail Charges For Service at: xxxxxx Outage Contact Number:xxxxxx Invoice: xxxxxxBilling Period: 03/22/2008 through 04/19/2008Days Billed: 29 Metering Information Meter Number Start Date Start Read Stop Date Stop Read Read Difference Units Multiplier Usage UsedType xxxxxxx03/221,932.0A04/192,129.0A197.05,600.0001,103,200.0P-KVARH xxxxxxx03/222,297.3A04/192,518.0A220.75,600.0001,235,920.0P-KWH Total KVARH1,103,200.0 Total KWH1,235,920.0 kW kVA =.746 kWH = 1,235,920 kVARH = 1,103,200 Example of DTE Utility Bill Power Factor Penalty

10. www.myronzucker.com Sizing Power Factor Capacitors

11. www.myronzucker.com Sizing Power Factor Capacitors Billing Status Information 1On-peak Billing Demand1,080KW ESTABLISHED03/22/200811:30 365% High OP Bill Dmd June-Oct prec 11 mths702KW ESTABLISHED09/21/200711:30 6Rate Minimum Demand (Site)50KW ESTABLISHED01/22/199400:00 8Highest Single Billing Demand1,080KW ESTABLISHED03/22/200800:30 ACurrent PV High Monthly Demand1,080KW ESTABLISHED03/22/200800:30 B50% of the Contract Capacity for PV540KW ESTABLISHED05/19/200722:30 CPrimary Voltage Maximum Demand1,080KW ESTABLISHED03/22/200800:30 WCoincidental Max Onpk KW Dmd at Site1,080KW ESTABLISHED03/22/200811:30 Primary Voltage Maximum OnPeak Demand Reactive Demand0KVAR Percent Change56PCT Avg Kilowatthours Used Per Day A year Ago144,406KWH Power Factor (ratio) for all voltage74PCT Total Number of days in the Billing Period29DAYS Excess KVAR for PF less than.80KVAR Contract Capacty for Location1,080KW ESTABLISHED02/20/200700:00 Avg Kilowatthours Used Per Day This Period22,519KWH (KVAR) Coincidental Max Demand at Site0KVAR Avg Kilowatthours Used Per Day This Period22,519 KWH Average kW = 22,519 / 24 = 938 938 * 0.398 = 373 or 375 kVAR required to improve power factor from.75 to.90 kVA = 1,257 kW = 938 kVAr = 837 θ Desired Power Factor (%) 80859095100 Original Power Factor (%) 680.3280.4590.5940.7501.078 690.2990.4290.5650.7201.049 700.2700.4000.5360.6921.020 710.2420.3720.5080.6630.992 720.2140.3440.4800.6350.964 730.1860.3160.4520.6080.936 740.1590.2890.4250.5800.909 750.1320.2620.3980.5530.882 760.1050.2350.3710.5260.855 770.0790.2090.3440.5000.829 780.0520.1830.3180.4740.802 790.0260.1560.2920.4470.776 800.0000.1300.2660.4210.750

12. www.myronzucker.com Information Required to Size and Locate Capacitors 12 months of electrical utility bills Electrical layout of facility –Motor location and sizes –Transformer sizes Variable Frequency / Speed Drives Harmonic study Sizing Power Factor Capacitors

13. www.myronzucker.com Case Study Oaks Correctional Facility Manistee, Michigan 4 housing units; 4 large buildings which include food services, health care, recreation, maintenance, warehouse storage, administrative offices. HVAC, compressors, lighting, hydraulic motors Poor power factor $650 average power factor penalty/month

14. www.myronzucker.com Case Study Oaks Correctional Facility Solution for Oaks Correctional Facility 320 kVAr was calculated for facility to reach the target power factor 30 kVAr installed at the switchgear in each of the 4 housing units 50 kVAr capacitor installed at the switchgear in each large building Total cost of capacitors: $6000 Penalty eliminated plus rebate of $200/month = $850 savings/month Payback of less than one year achieved, even considering installation costs.

15. www.myronzucker.com Benefits of Improving Power Factor Elimination of Power Factor Penalties Where applicable Increase Capacity in Electrical System Reduction of I 2 R Losses When capacitors are located close to inductive load Up to 4% savings for that load Improves Voltage on System

16. www.myronzucker.com Capacitor Tolerances –United States: IEEE 18-2002 Capability –Line to Neutral 110% Continuous –Line to Line120% Continuous –Current180% Continuous –Var Output135% Continuous –Europe: CE Standards call for 8 hour period Remember that these standards are Recommendations, not Code, and can therefore be ignored by manufacturers Power Factor Capacitors

17. www.myronzucker.com Electric Power Research Institute (EPRI) “You can only save energy that is wasted” Infrastructure (system) losses generally 1-4% Includes I 2 R losses (Line Losses) Beware of large energy saving claims where capacitor are used Claims of large savings on your “losses” is NOT equal to large savings on your entire energy bill. A claim of 15% savings on energy “losses” at a facility with 2% line losses would total at most a.3% savings on the entire energy bill. (e.g. 15% x 2% = 0.3%) Power Factor Capacitors