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Determination of Distribution System Wheeling Access Charge

Determination of Distribution System Wheeling Access Charge

Determination of Distribution System Wheeling Access Charge

(OP)
We've got a small utility client that has a possible cogen project (2MW) in their territory. The plan is to sell all the power to another entity (investor-owned utility) but the project will connect to the local utility's distribution feeder. We're trying come up with a reasonable access charge/wheeling rate for power that is sold. This is generally set by tariff on transmission systems, but not at distribution voltage.

Does anyone have any suggestions on how to determine a fair charge for this in a fairly simple manner?

Dave

RE: Determination of Distribution System Wheeling Access Charge

Closing the barn door after the horse is long gone. They'd have a strong case to say there is no cost. And frankly, if they pay enough to cover all the system modifications necessary they'll be saving the Distribution Provider money from here on out.

RE: Determination of Distribution System Wheeling Access Charge

Have you thought about calculating the distribution maintenance cost divided by the number of miles as a basis. Then take MW peak demand divided by cost per mile to determine the cost to deliver one MW one mile, from then you are just renting capacity to the customer.

Maybe a starting point.

We would not do that, our board is to nice, so I have no experence. Just my 2 cents.

I would not give it away, as I can argue that if the line has no value, why don't I remove it.

Besides there is a cost to meter and dispatch which won't be capactured if you follow David advice.

RE: Determination of Distribution System Wheeling Access Charge

My thought was, assuming the generation is on a feeder that serves other load, and has load beyond the interconnection point, that the interconnected generation is actually (not contractually) going to relieve the loading of the line and allow the utility to serve additional load with less additional cost than if the generation wasn't present. Unless it is a very small distribution system, there won't actually be any power flows out of the distribution system onto the transmission system. The utility then doesn't take delivery of some 2MW block of power at some point and that becomes the "wheeled" power from the generation.

RE: Determination of Distribution System Wheeling Access Charge

(OP)
There will be light load conditions, based on historical data, when power would flow out of the feeder, but probably not out of the substation to the transmission system. But there will also surely be O&M costs related to having an interconnected generator on the feeder. Transfer trip will be required.

RE: Determination of Distribution System Wheeling Access Charge

If you think about your average commercial customer, all in the same rate class pay the same basic, energy, and demand rates. No variation is applied for those using more of the system (farther from transmission) or those using less. The billing covers things like maintenance, operating, overhead, profit (if IOU), and the energy and demand charges the small utility pays to its supplier. I would suggest backing the last two out of the most appropriate commercial rate to come up with a fair wheeling rate.

RE: Determination of Distribution System Wheeling Access Charge

Not that I disagree with David, but there is paper work involved with distribution wheeling, and there is an office cost that is larger than the office cost of a typical distribution customer. So although the power injection actually helps the distribution system, it has a higher office cost. The fact that the generation may exceed 20% of the feeder load may require additional protection, and therefor additional subbsation maintenance for the utility, which is again should be charged to the generation customer, and not the remainder of the rate payers.

The issue will be argued what is fair. The answer is not zero or 10 million, but somewhere in between. But you should consiter additional maintenance of protective equipment, and office costs. The issue is how do you tie those to something like a typical rate based on demand and energy.

RE: Determination of Distribution System Wheeling Access Charge

(OP)
Thanks for the comments. The utility is in the middle of a cost-of-service study so we may be able to pull some information on costs out of that work and develop something that is reasonable.

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