XYLENE POWER LTD.

CONGESTION FACTOR BENEFITS

By C. Rhodes

CONGESTION FACTORS:
Congestion Factors are mathematical functions applied to interval metering data to make the average cost per electrical kWh less for high load factor customers than for low load factor customers. Congestion factors are also used to increase the average per kWh compensation rate for high capacity factor generators as compared to low capacity factor generators.

Congestion Factors tend to make marginal electricity kWh consumed on-peak about three times as expensive as marginal electricity kWh consumed off-peak. The purpose of Congestion Factors is to encourage an increase the average customer's load factor or average generator's capacity factor by financially enabling behind the meter load management and energy storage.

CONGESTION FACTOR DEVELOPMENT:
The detailed mathematical basis of Congestion Factors is set out in the section titled Electricity Congestion Factor.

FEATURES OF CONGESTION FACTOR WEIGHTED ELECTRICITY RATES IN COMBINATION WITH DIRECTIONAL kWh METERING:

1. Congestion Factor weighted electricity rates can be applied to non-dispatched generators, non-dispatched loads and distribution connections of all sizes for fair allocation of generation and transmission/distribution costs. The required input data is obtained from direction sensitive interval kWh meters.

2. Congestion Factor weighted electricity rates allocate more cost per kWh to low load factor customers than to high load factor customers.

3. Congestion factor weighted electricity rates allocate more revenue per kWh to high capacity factor generators than to low capacity factor generators.

4. The Congestion Factor is unity for a customer that operates at the Load Factor of an average non-dispatched customer.

5. The Congestion Factor is unity for a generator that operates at the Capacity Factor of an average non-dispatched generator.

6. The use of Congestion Factor weighted electricity rates allows simple meter reading and account administration. Electricity bills can easily be settled to the nearest metering interval.

7. Congestion Factor weighted electricity rates mitigate the cost effect of load peaks that randomly occur only one or two days per month but capture the cost effect of load peaks that occur almost every day.

8. Use of Congestion Factor weighted electricity rates instead of monthly peak kVA or monthly peak kW would have the overall effect of slightly shifting the electricity rate burden from high load factor to low load factor customers, which would encourage more energy conservation, energy storage and load management in the commercial sector.

9. Congestion Factor weighted electricity rates in combination with data from directional kWh meters encourage high power factor and low harmonic content.

10. Congestion Factor weighted electricity rates encourage high customer load factor and high generator capacity factor.

GENERAL BENEFITS OF CONGESTION FACTOR WEIGHTED ELECTRICITY RATES IN COMBINATION WITH DIRECTIONAL kWh METERING:

1. Congestion Factor based electricity rates are fair. All non-dispatched customers and all non-dispatched generators are subject to the same common electricity rate. There is no issue of cross subsidization between different customers in the same geographic area.

2. Use of Congestion Factor weighted electricity rates would encourage wind generators to build energy storage at or near the generator site to reduce variations in net power output.

3. A Congestion Factor weighted electricity rate is fair to behind the meter energy storage and co-generation because it mitigates the cost effect of short equipment shutdowns for maintenance or repair.

4. Congestion Factor weighted electricity rates are applicable to non-dispatched generators and loads of all sizes.

5. If a customer presents a constant resistive impedance to the grid, then the calculated daily net energy consumption is the same as the energy in kWh sensed by an induction type kWh meter.

6. If a customer presents a reactive impedance or harmonic distortion to the grid then that customer is allocated a larger fraction of the electricity costs.

7. If a customer presents a low load factor to the grid, that customer will be charged more for both generation and transmission / distribution per kWh transported than is a customer that presents a high load factor to the grid.

8. Directional kWh meters are able to respond to voltage and current harmonics up to at least the 30th harmonic of the power line frequency. Generally power transformers effectively absorb and filter out higher frequency harmonics.

9. The Congestion Factor weighted electricity charges are calculated from directional interval kWh values from interval meter data.

10. The use of Congestion Factor weighted electricity rates in combination with interval kWh metering should encourage installation of behind the meter energy storage and and behind the meter electricity generation to minimize swings in the power transfer rate to and from the grid.

11. The use of Congestion Factor weighted electricity rates in combination with directional interval kWh metering allows transmission/distribution entities to fairly recover their costs from all customers.

12. The use of Congestion Factor weighted electricity rates in combination with interval kWh metering strongly encourages proper use of energy storage while elimiinating power instability problems that are triggered by block Time-Of-Use metering. With congestion factor rates there are no sharp rate block boundaries and the customer has a strong economic incentive to cap his peak demand during the off-peak period at his peak demand during the on-peak period.

13. A further benefit of Congestion Factor weighted electricity rates is that the metering system is highly tolerant to loss of time synchronization between the meters and the central computer system. Hence the data traffic required to ensure time synchronization can be vastly reduced, which lowers the required data bandwidth and hence lowers the system operating cost.

14. Elimination of dependence on rate blocks makes the Congestion Factor system extremely resistant to data hacking both at the meters and in the central computer system.

This web page last updated October 24, 2011.