Workshop J
Reducing Your FirstEnergy
Electricity Bill through
Conscious Scheduling &
Demand Management
3:15 p.m. to 4:30 p.m.
Biographical Information
Matthew Brakey, President
Brakey Energy
3309 Glencairn Road, Shaker Heights, Ohio 44122
Phone: 216-570-6964
[email protected]
Matt Brakey is President of Brakey Energy. Brakey Energy provides
commission-free
comprehensive
energy
management
services
to
approximately 90 energy-intensive businesses and institutions that operate in
the state of Ohio. Brakey Energy helps these users lower their energy costs
through energy bill audits, electric generation and natural gas procurement,
peak demand management, energy efficiency analysis, and managing
regulatory issues.
Brakey Energy clients range from large commercial operations, manufacturers,
universities, and institutional users. Representative clients include the world
champion Cleveland Cavaliers, the American League Central-leading
Cleveland Indians, Progressive Casualty Insurance, American Greetings,
Sauder Woodworking, Hexpol Compounding, John Carroll University, and the
Greater Cleveland Regional Transit Authority.
Matt represents Brakey Energy’s clients at meetings of the Industrial Energy
Users of Ohio (IEU-Ohio). Matt is Secretary of IEU-Ohio, which works with
regional, state, and national energy stakeholders with the aim of achieving
reliable electricity at reasonable prices.
Matt was named a Crain’s Cleveland Business’s Forty under 40 award winner
in 2013 for his professional success and civic contributions. Under Matt’s
leadership, Brakey Energy was recently honored as a winner of Case Western
Reserve University’s Weatherhead 100 Upstart Award for 2015. This
prestigious award recognizes Northern Ohio businesses that have enjoyed
outsized five-year growth.
Matt holds a J.D. from the Cleveland-Marshall College of Law at Cleveland
State University, having graduated cum laude, and a B.A. from Miami
University. He lives in Cleveland Heights, Ohio with Carolyn, his wife, and their
twins (born June 9, 2015) Grover and Beatrix.
When he’s not analyzing electric bills or changing diapers, Matt enjoys going for
runs with his two rescue dogs, Gobi and Megawatt.
Workshop J: Reducing Your
FirstEnergy Electric Bill
Through Conscious Scheduling
and Demand Management
September 2016 MEC Conference
Billing Components
 Distribution
 Transmission
 Generation
2
Workshop J
Distribution
3
FirstEnergy Distribution Charges
 Distribution charges on a standard monthly FirstEnergyOhio electric bill are primarily based on kilowatt-hour
(kWh), kilowatt (kW), and/or kilovolt amperes (kVa).
 kWh are a measure of power consumed during the
course of a billing cycle.
 kW and kVa are measures of the the most power
demanded in any given 30-minute window during a
billing cycle.
 kVa factors in power factor, whereas kW does not.
 A 15-minute window is used in Toledo Edison territory.
Examples of FirstEnergy
Distribution Charge Subcomponents
 Customer Charge (each
customer number)
 Demand Charge (kW or kVa)
 Reactive Demand Charge
(rkVa)
 State kWh Tax (kWh)
 Commercial Activities Tax (%)
 Universal Service Rider (kWh)
 Distribution Uncollectable
Charge (kWh)
 Advanced Metering
Infrastructure (each customer
number)
 Line Extension Cost Recovery
Rider (kWh)
 PIPP Uncollectible Rider (kWh)
 Demand Side Management &
Energy Efficiency
 DSE1 (kWh)
 DSE2 (kWh)
 Delivery Capital Recovery
Rider (kW or kVa)
Minimizing Distribution Charges
 The most effective may to minimize FirstEnergy
distribution charges is to minimize kW or kVa peak
demand.
Strategies for Minimizing kW
Demand








Stagger equipment starts.
Run additional shifts.
Combine electric meters.
Install a building automation system.
Install real time electric meters to monitor consumption.
Install variable speed drives.
Run onsite generation to shave demand peaks.
Any energy efficiency project that reduces consumption
during your highest monthly peak demand.
Workshop J
Transmission
8
Transmission Service
 Transmission, the service for moving electricity across
high voltage lines, is included as a charge in your
monthly electric bill.
 PJM Interconnection oversees operation of transmission
systems in Ohio.
 PJM bills utilities and suppliers for transmission based
on PJM’s Open Access Transmission Tariff (OATT).
 Customers pay for transmission to utility, retail supplier,
or directly to PJM.
PJM Zones
10
Transmission Charges for Ohio
Investor-Owned Utility Customers
 Customers pay for transmission as a surcharge on their
monthly utility bills.
FirstEnergy
 Non-Market-Based Services
(NMB) Rider
 Based on monthly billing
demand
DP&L
 Transmission Cost Recovery
Rider
 Monthly billing demand
component.
 Monthly kWh usage
component
 Monthly billing reactive demand
component (for voltages over
secondary)
AEP
 Basic Transmission Cost (BTC)
Rider
 Monthly billing demand
component
 Monthly kWh usage
component
Duke
 Base Transmission (BTR) Rider
 Based on monthly billing
demand
NMB Rider Rates
• Rates for FirstEnergy commercial and industrial
customers shown in table below.
• NMB rider rates have approximately doubled over the
past two years.
FE Transmission Pilot Program
 A small-scale transmission pilot program was included in
FirstEnergy’s most recently approved electric security plan.
 Program allows customers to opt out of NMB rider.
 Transmission charges for participating customers are based on
PJM’s Network Integration Transmission Service (NITS) rates
and customer’s 5CP consumption.
 The 5CP is the five hours out of the year where demand on
FirstEnergy-Ohio’s (ATSI Zone) is highest.
 Program participation was narrowly limited.
 The program can be highly advantageous to customers that
operate off-peak, are not weather-sensitive, or have the ability
to curtail during grid peaks.
 Customers pay for transmission directly to PJM or indirectly to
their retail supplier.
Client Savings Example
 This client is now saving an average of $23,000 per
month after enrolling in the transmission pilot program.
2016 ATSI Zone Transmission CPs to
Date
Date
Load (MW)
Hour Ending
Alert Issued
9/7/16*
8/11/16
8/25/16
8/12/16
7/13/16
13,129
12,752
12,701
12,578
12,539
4:00 PM
3:00 PM
4:00 PM
3:00 PM
6:00 PM
Yes
Yes
Yes
Yes
Yes
*Denotes Preliminary Data
Assigned
Probability
65%
80%
25%
80%
90%
Example of Brakey Energy
Transmission CP Alert
Workshop J
Generation
17
Subcomponents of Electric
Generation
 Energy
 The electron.
 Ancillary Services
 Services associated with grid reliability.
 Capacity
 A generator’s ability to generate, or a user’s ability to curtail,
during grid peak times.
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Generation Demand Charges
 There are no electric generation charges in FirstEnergy
territory that are a function of a customer’s billed monthly
kW or kVa.
 However, the capacity subcomponent of generation is
dependent on how a customer consumes power when
the PJM electric grid is peaking.
 The energy component (depending on the terms of the
generation contract) is a function of the hourly spot price
price and a customer’s consumption for any given hour.
Three Core Electric Generation
Products
 Fixed
 A customer pays a fixed price for energy regardless of how much
it consumes, absent limiting contractual provisions.
 Block-and-Index
 A customer pays a fixed price for energy for a MW block of
power.
 Every kW consumed above or below the block is reconciled in
the spot market.
 Index
 The price paid for energy is tied to the hourly spot market.
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What is Capacity?
 Capacity is the amount of electricity available on the grid
at any one time.
 A generator’s ability to produce or a user’s ability to curtail.
 Electricity must be produced and consumed
simultaneously.
 Sufficient capacity during peak demand periods is necessary or
the lights go out.
 Capacity costs in the PJM wholesale market are
determined by a series of auctions.
 The Base Residual Auction (BRA) is primary driver of any given
delivery year’s price.
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Peak Load Contribution (PLC)
 A shopping customer’s Peak Load Contribution (PLC)
determines its allocation of capacity costs.
 The customer’s capacity “speeding ticket.”
 A PLC is determined by a customer’s average usage
during five Coincident Peaks (CPs).
 A CP is one of the five hours of the year when demand
on the PJM electric grid is at its highest.
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2016 Capacity CPs to Date
Date
Load (MW)
Hour Ending
Alert Issued
8/11/16
7/25/16
8/12/16
7/27/16
8/10/16
152,178
150,957
147,778
145,380
144,261
4:00 PM
4:00 PM
3:00 PM
5:00 PM
5:00 PM
Yes
Yes
Yes
Yes
Yes
Assigned
Probability
65%
95%
70%
45%
10%
Brakey Energy Capacity CP Alert
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Day-Ahead Spot Market Energy
Prices
Workshop J
Putting it all Together
26
Actual Client Example
 The client is a foundry on Ohio Edison’s Economic Load Reduction (ELR)
rider.
 ELR customers allowed to competitively source power for the first time beginning
June 2016.
 The client entered into a capacity pass-through block-and-index contract
with a supplier.
 Hedged 3 megawatts (MW) on-peak at $41.92 per MW from July to September
2016.

All power consumed outside of the block was purchased at the hourly day-ahead spot
market price.

If the client consumed less than 3 MW at any given on-peak hour, the difference was
liquidated at the hourly day-ahead spot market price.
 Actively CP managed in response to CP alerts for the first time this past summer.
 The client is enrolled in FirstEnergy’s transmission pilot program.
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Capacity 1CP: Hour Ending 4:00 PM,
August 11, 2016
3MW @ $41.92 Capacity 2CP: Hour Ending 4:00 PM,
July 25, 2016
3MW @ $41.92 Capacity 3CP: Hour Ending 3:00 PM,
August 12, 2016
3MW @ $41.92 Capacity 4CP: Hour Ending 5:00 PM,
July 27, 2016
3MW @ $41.92 Capacity 5CP: Hour Ending 5:00 PM,
August 10, 2016
3MW @ $41.92 ATSI Transmission 1CP: Hour
Ending 4:00 PM, September 7, 2016
3MW @ $41.92 ATSI Transmission 2CP: Hour
Ending 3:00 PM, August 11, 2016
3MW @ $41.92 ATSI Transmission 3CP: Hour
Ending 4:00 PM, August 25, 2016
3MW @ $41.92 ATSI Transmission 4CP: Hour
Ending 3:00 PM, August 12, 2016
3MW @ $41.92 ATSI Transmission 5CP: Hour
Ending 6:00 PM, July 13, 2016
3MW @ $41.92 Estimated Savings Based on
Curtailment Activities