New client in Evansville is looking at upgrading their electrical service from 480V secondary to 2.4kV primary. Vectren offers primary rates starting at 2.4kV on their Schedule DP rate, and the demand charge discount looks significant - about $3.20 per kW lower than secondary rates. But the client would need to install their own transformer and protective equipment. Has anyone done the math on whether the infrastructure investment pays off at these lower voltage levels?
Evansville primary rates - is 2.4kV service worth it?
The economics get tricky at 2.4kV because the infrastructure costs are still substantial but the rate discounts are smaller than what you'd see at higher voltages. For a typical 500kW facility, you're looking at maybe $30,000 in annual rate savings but $150,000 in transformer and switchgear costs. Payback is usually 5-7 years depending on load factor and future rate escalation. Make sure to factor in ongoing maintenance costs too.
Thanks Greg. This client has about 800kW peak demand so the economics might work better. I'll run the numbers including maintenance and insurance costs. The other consideration is that Vectren has been talking about eliminating their 2.4kV primary rate option, so there's some regulatory risk if they invest in the infrastructure and then get forced back to secondary rates in a few years.