Working with a steel foundry that's been on DTE's Schedule D2 firm service at $11.85/kW demand charge. They're considering switching to interruptible Schedule D7 at $8.20/kW but worried about production interruptions. Last year DTE called 12 interruption events averaging 4 hours each. Thoughts on the trade-off?
Interruptible Rate vs Firm Service - Steel Foundry Decision
Donna, steel foundries are tricky for interruptible service because you can't just shut down a furnace mid-melt. If they can't shed load quickly or reschedule production around interruptions, those penalties will eat up any demand charge savings. What's their monthly peak demand running?
Ed, they're pulling about 2,800 kW peak monthly. The penalty for failing to interrupt is $25/kW on the amount they should have shed, so if they miss a 500 kW curtailment that's $12,500. Really makes you think twice about those $3.65/kW savings.
I'd lean toward staying on firm service unless they have a lot of operational flexibility. Steel foundries have some of the least flexible processes in manufacturing. One missed interruption penalty could wipe out 6+ months of demand charge savings.