Steel fabrication plant in Indiana running 0.65 load factor on AEP Schedule IS. They're on straight demand billing but wondering if TOU would be better. Most of their production is during off-peak hours. Anyone have rules of thumb for when TOU makes sense over straight demand?
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Load factor analysis for TOU optimization
With 65% load factor and mostly off-peak production, TOU could definitely save money. General rule is if you can keep 70%+ of your kWh in off-peak periods, TOU usually wins. Steel fab is perfect for this since you can often shift production schedules. Run a 12-month analysis comparing both rate structures.
Thanks Isaac. Did a quick calculation and they're using about 75% of energy during off-peak currently. Looks like potential savings of $3,200/month switching to TOU-IS. Plant manager loves the idea of saving money just by adjusting shift schedules.