Saut, Bonifacio R.

BSME-5
5. The fixed element invested in a 100,000-kw power plant is $15,000,000. Find its
average annual cost per kw, based on straight line depreciation. Estimated
life, 15 yrs; salvage value, 20%; r,5%.

Solution:
Annual Depreciation

( $ 15,000,000(10.20)
)
15

$ 800,000

$ 800,000
Rate 100,000 kw

$ 8 per kw

7. Ten years ago a small steam plant of 2000-kw capacity costing $125 per kw was
erected. The life was estimated at 15 years and the salvage value at 5%. At
present, abandoning the old plant in favor of a new Diesel plant is being
considered. A market has been found for the old engine and boiler equipment
at $15,000. The remainder of the old plant can be utilized in the new and is
given a valuation of $8500. Depreciation has been figured on the straight line
basis. What is the difference between the depreciated book value of the old
plant and its sale value? How would the difference be taken care of in the
reconstruction?

Capital Cost=$ 125 /kW ( 2000 kW )=$ 250000

Salvage Value=( 0.05 ) 250000=$ 12500
D 10=10

( 2500012500
)=$ 158 333.3
15

Book Value ,C 10=250000158333.3=$ 91666.67

Sale Value=15000+85000=235000

Book ValueSaleValue=91666.6723500=$ 68166.67

8. The load duration curve and fuel characteristic for a 45,000 kw plant are given in
Prob. 20, Chapter 2. Other data for the same station are: Initial cost, $135 per
kw; estimated life, 20 years; salvage value, 8% of first cost; interest rate, 5%;
taxes and insurance, 3 %; labor, 45 men; average salary, $175 per month;
maintenance and repairs, $65,000 per annum; oil, waste and supplies,
$20,000 per annum; coal, $8.25 per tonne. Find production cost per kw hour.

Solution:

I nitial C ost =$ 135 ( 45000 )=$ 6,075,00 0

Annual depreciation reserve=

6075000(10.08)
=$ 279,450
20

Interest +insurance=( 0.05+0.035 ) $ 6,075,000=$ 516,375

Labor=$ 175 ( 45 ) ( 12 )=$ 94,500
Maintenance+ repairs=$ 65,000

Oil, wastesupplies=$ 20,000

Average Cost of coal per yr .=

1tonne $ 8.25 24 hrs 365 days

( 25.39lbhr )( 2000
lb )( 1tonne )( 1 day )( 1 yr )
average

$ 917.4275

Annual production cost=

$976,242.4275

Assumption :

Annual load factor=50

Annual production=( 45,000 kW ) ( 0.5 ) ( 8760 hrs )=19,710,000 kWh

Rate=

976,242.4275
=$ 0.0495 /kWh
19,710,000

9. The annual costs expected by a utility system in supplying a certain residential

suburb of 45,000 customers are; Fixed element, $345,000; energy element,
$180,000; customer element, $300,000; return on investment, $200,000.
17, 050,00 kw hr will be registered on customers meters during the year and
their maximum demand on the power plant will be of the order of 5500 kw. Diversity
factor from Table 2-2.

(a) Form a straight line meter rate.

(b) Form a three charge rate, putting of the profit in the energy
element, in fixed element.
(c) Form a room rate in which the customer element is a fixed 4 kw hr per
room. (Assume average home, 6 rooms.) Energy element is uniformly
distributed.

Solution:

Fixed Element
Energy Element
Customer Element
Profit Element
Total

$ 345,000
$ 180,000
$ 300,000
$ 200,000
$ 1,025,000
$ 1,025,000
=$ 0.06 per kw hr
17,050,000 kw hr

a)

Straigh line meter rate=

b)

1
Demand Charge=$ 345,000+ ( $ 200,000 )=$ 395,000
4
5500 kW 4=22,000 kw
Unit demand charge=

$ 395,000 $ 17.95
=
22,000 kw
kw

Therefore demand charge per month = $1.15 per kW of maximum demand

3
Energy Charge=$ 180,000+ ( $ 200,000 ) =$ 330,000
4
Unit energy charge=

$ 330,000
=$ 0.0194 per kw hr
17,050,000 kw hr

Service Charge=$ 300,000

300,000
45,000 cust
service charge per month=
=$ 0.55
12
$

11. The annual costs of operating an electric system are:

Coal, $300,000
Franchise and publicity, $70,000
Station depreciation, $190,000
Station supplies, $30,000
Primary line dep., $190,000
Interest, taxes and insurance: on plant and primary line, $50,000; on secondary lines,
$85,000
Secondary lines dep., $120,000
Plant maintenance: Fixed $1000, variable $2000
Secondary lines maintenance, $50,000
Labor: Generation, $105,000; Distribution, $80,000; Accounting, $150,000
Superintendence and management, $50,000
Dividends to stockholders, $350,000
Annual station output 70 x 106 kw hr, 10% energy loss in transmission; peak load, 20,000
kw; diversity, 3.33; 100,000 customers.
Compute a three charge rate in which one-half of the dividends are in the service charge,
the other half in the demand charge.
Solution:
Fixed Element
Energy Element
Customer Element
Profit Element
Total

$ 481,000
$ 517,000
$ 475,000
$ 350,000
$ 1,823,000

1
Demand Charge=$ 481,000+ ( $ 350,000 ) =$ 656,000
2
20000 kw 3.33=66600 kw

Unit demand charge=

$ 656,000 $ 9.85
=
66,600 kw
kw

Therefore demand charge per month is $0.82 per kW of maximum demand

Energy charge=

$ 517,000
=0.82 per kw hr
63 10 6 kw hr

1
Service Charge=$ 475,000+ ( $ 350,000 ) =$ 650,000
2
650,000
100,000 cust
service charge per month=
=$ 0.542
12
$

13. Annual costs in a certain power system are:

For fixed costs: Plant, 1,750,000; primary lines, $600,000; secondary lines, $1,250,000.
For operating cost: Plant, $75,000 indirect and $950,000 direct.
For distribution system, $500,000. Direct customer expense, $400,000; profit, 8% of
fixed cost.
Peak load on plant, 45,000 kw; diversity factor, 4; annual plant output, 1.2 x 108 kw hr.
Assume 50,000 customers and 20% transmission loss.
Find the straight line meter rate.
Solution:
Fixed Element
Energy Element
Customer Element
Profit Element
Total

$ 3,600,000
$ 1,025,000
$ 900,000
$ 288,000
$ 5,813,000

Annual Plant Output =( 1.2 108 kw hr ) 0.80=96,000,000 kw hr

Straight Line Meter Rate=

$ 5,813,000
=$ 0.061 per kw hr
96,000,000 kw hr

14. Using data of Prob. 13, construct a Doherty rate, putting profit into the proper elements, in

proportion to the investment.

Solution:
Fixed Element

$ 3,600,000

Energy Element
Customer Element
Profit Element
Total

$ 1,025,000
$ 900,000
$ 288,000
$ 5,813,000

Demand Charge=$ 3,600,000+288,000=$ 3,888,000

45000 kw 4=180000 kw

Unit demand charge=

$ 3,888,000 $ 21.6
=
180,000 kw
kw

Therefore demand charge per month is $ 1.80 per kw of maximum demand

Energy charge=

$ 1,025,000
=$ 0.011 per kw hr
96,000,000 kw hr

Service Charge=$ 900,000

900,000
50,000 cust
Service charge per month=
=$ 1.50
12
$

15. An air preheater installation will cost $12,500. Its life is assumed to be 8 years. Salvage

value is nothing. Annual maintenance and repair is estimated to average $150. Use
compound interest at 6% and find the annual cost of the preheater.
Solution:
0.06
(
)
Sinking Fund Payment $ 12,5000 ( 1+0.06 )8 1

$ 1,262.95
Annual Depreciation Reserve
Annual Maintenance
Annual Cost

1,262.95
150.00
$ 1412.95

17. A 30 mhp condensate pump motor has been burned beyond repair. The plant
superintendent has two replacement alternatives. Manufacturer A offers to replace
the original (which was an A motor) for $510. Manufacturer B offers a cheaper
motor at $400 but can only guarantee 87% efficiency whereas the A motor is
guaranteed for 89%. The installation operates 25% of the time at full load, and 75%
of the time at half load where the two efficiencies become 85% and 84%

respectively. Assume a motor comparison of 5 years, interest rate 8%, equal

maintenance cost. Electric energy is charged for at the rate of 1

per kw hr.

a. Which motor is the more economical buy?

b. At what energy cost do they become equal alternatives?
i= 8%
n=5 years
Motor A

Motor B

0.08
0.08
Annual depreciation reserve=510
=$Annual
86.93 depreciation reserve=400
=$ 68.18
5
( 1+0.08 ) 1
(1+ 0.08 )51

Rate=

Annual Cost
Annual prduction

0.015=

Rate=

Annual Cost
Annual prduction

86.93
68.18
0.015=
Annual production( ( 0.890.25 ) +(0.850.75))
Annual production ( ( 0.250.87 ) + ( 0.840.75 ) )

Annual production=6738.76 kWh

Annual production=5363.23 kWh

Motor A is more economical.

18. Make a comparative analysis of the production cost per kw hr of the two plants
for which data are given. Annual production= 1 x 10^6 kw hr
Diesel Plant
Engine and generator
$53,000
Swbd. And wiring
$5,600
Miscellaneous
$8,000
Building
$10,500
Steam Plant
Labor, per month
$350
Turbogen. And condenser
$24,000
Fixed charges Boiler and stoker
11%
$20,000
Oil, per liter (0.621
Swbd.g/ml)
and wiring
$5,600
4.1
Miscellaneous
$10,000
Fuel economy
0.49 lb/kw hr
Building
$12,000
Labor, per month
$450
Fixed charges
12%
Coal, per ton
$3.5
19. Using
Fuel economy
1.72 lb/kw hr
data of the
sample in Sec 3-10, form a block meter rate with the fixed element and one-half the
customer element collected in the first 12 kw hr per month per customer. In the
second block, reduce the rate to of the first block for the collection of the energy
element and remainder of the customer element. Assume that of the customers

will average full consumption of the second block. Collect the profit element in the
third and final block.

21. The load duration of a group of residential customers served by a substation is

given by the following data:
Percent of the year
Kilowatts

0
95

10
50

20
40

30
30

40
29

50
29

60
28

70
28

80
22

90
12

100
8

Average efficiency of distribution is 95%. Customers rate is 8 per kw-hr for the first

25 kw-hr, 5 per kw hr for the next kw hr, 3 per kw hr for the next 50 kw hr, and 2 per kw hr
for all remaining energy. What is the average monthly gross income from this group of customers
if 20 of them average taking 300 kw hr per month, 50 of them take 130 kw hr per month, while
the remainder average 70 kw hr per month each? How many customers are there in the whole
group?

22. A customers meter reads 29,543 kw hr on May 1, and 29,598 kw hr on June 1. Find the

amount of his electric bill for May based on the following rates.
a. 7 per kw hr
b. 10 per kw hr for the first 35 kw hr; 5 per kw hr for the next 25 kw hr; 3 per kw hr
for all in excess of 60 kw hr.

Solution:
29,59829543=55 kw

a)

7
55 kw hr=385
kw hr

b)
10
35 kw hr=350
kw hr
5
20 kw hr=100
kw hr
Total=450 =$ 4.50

23. Assume that a customers maximum monthly demand was recorded as 120kw. His energy

consumption for the same period was 40,500 kw hr. His rate is: $2.40 per month per kw
for the first 50 kw of maximum demand; $2.00 per month per kw for the excess of
maximum demand over 50 kw; plus 5 per kw hr for the first 1000 kw hr per month; 3
per kw hr for the next 4000 kw hr per month; and 2 per kw hr for all energy in excess of
5000 kw hr. What is his bill for the month considered?
Solution:
$ 2.40
50 kw=$ 120
kw
$ 2.00
70 kw=$ 170
kw
5
1000 kw hr=5000 =$ 50
kw hr
3
4000 kw hr =12000=$ 120
kw hr
2
40000 kw hr =80000 =$ 800
kw hr
Total=$ 1230

24. A customer having a 7-room house used 55 kw hr during a certain month. What is his

electric bill for that month if his rate is that given as the example of Room rate charge,
Sec 3-9, and there is a 5% discount for payment in 15 days?
Solution:
In one room

55 kw
=7.857 kw
7

10
3 kw hr 7 rooms=210
kw hr
7
3 kw hr 7 rooms=147
kw hr
4
1.857 kw hr 7 rooms=51.9
kw hr
Total=408.9

26. The rate for a commercial customer is $6.00 per kw per month for the first kw of maximum

demand, plus $5.00 per kw per month for the next 6 kw of maximum demand, plus $4.00
per kw per month for all of the maximum demand in excess of 7 kw, plus energy charge
as follows: First 100 kw hr at 4 per kw hr. All remaining energy at 1 per kw hr. What
type of rate is this? How much is the customers bill in a month when he registers 15-kw
maximum demand and consumes 1850 kw hr?
Solution:
$ 6.00
1 kw=$ 6
kw
$ 5.00
6 kw=$ 30
kw
$ 4.00
8 kw=$ 32
kw
4
100 kw hr=400 =$ 4
kw hr
1
1750 kw hr=1750 =$ 17.5
kw hr
Total=$ 89.5