5.4. ERMUSR 09-10-2013 Elk River t
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Tom Sagstetter—Conservation and Key Accounts
John Dietz—Chair Manager
Al Nadeau—Vice Chair
Daryl Thompson—Trustee _
MEETING DATE: AGENDA ITEM NUMBER:
September 10, 2013 5.4
SUBJECT:
Integrity Testing and Demand Bill
BACKGROUND:
In January 2009, the ERMU Commission approved the Integrity Testing Policy that allowed for
large industrial customers to test equipment during off-peak hours and would not receive a
demand charge on the testing demand. The off-peak hours in the policy are from 12 midnight to
6:00 a.m. Monday through Friday, and 12 midnight to 10:00 a.m. on Saturday and Sunday. The
policy also states that the testing dates and times are to be communicated to ERMU staff 24
hours prior to the integrity testing. The Integrity Testing Policy is included for reference.
DISCUSSION:
On May 24th, 2013, a large industrial customer, who is required to follow this policy, performed
integrity testing of equipment that caused the demand to exceed their normal on-peak demand for
the month by 1,459 kW. While the customer did not provide 24 hours of notice of integrity
testing and the testing was outside the off-peak hours outlined in the integrity testing policy, staff
is looking for a discussion on providing relief for the demand charges for testing in May. The
testing period was only 45 minutes, did not occur during the demand billing peak even though it
was not during off-peak hours, and causes no additional cost burden to other rate classes of
customers.
ACTION REQUESTED:
Staff is looking for discussion on an exception to the policy, options for resolution, and desired
direction from the Commission.
ATTACHMENTS:
• Integrity Testing Policy
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ELECTRIC RULES
INTEGRITY TESTING
New large demand customers or existing large demand customers that have installed new
production equipment and conduct tests to determine the integrity of their production
equipment and/or electrical system or Elk River Municipal Utilities (ERMU) electric distribution
system can have a significant financial impact on their power bill especially if all equipment is
energized simultaneously. It can also have a significant financial impact on ERMU's wholesale
power bill if such testing coincides with the hour the monthly billing peak is established. To
discourage the practice of performing integrity testing during on-peak hours, ERMU will offer
new large demand customers or existing large demand customers that have installed new
production equipment an incentive to conduct all integrity testing during off-peak hours. That
incentive will come in the form of an agreement to waive the demand charge associated with
the additional peak created by integrity testing providing the following are observed:
1. The term large demand customer applies to any business or facility that places a demand
of one megawatt (1000 kW) or more on Elk River Municipal Utilities distribution system.
Multiple facilities under a common name or ownership cannot aggregate to meet the
minimum demand required to qualify for this offer.
2. The term off-peak hours refers to the six hours from midnight to 6 AM any weekday, or
the ten hours from midnight to 10 AM any weekend day.
3. 24 hour notice that integrity testing will be conducted will be forwarded to ERMU by
contacting 763-441-2020 to assure there are no extenuating circumstances that such tests
should not be performed on that day. Such permission shall not unreasonably be
withheld.
4. Initial startup refers to equipment and/or facility testing that is typically performed to test
the integrity of the electrical system serving the equipment or facility prior to the business
opening their doors for business to the general public. It also refers to equipment and/or
facility testing that may be performed to test the integrity of the electrical system serving
equipment that has been added to an existing business.
If all integrity testing is performed within the parameters described in items 1 through 4 above,
ERMU will ignore all demand peaks established during those off-peak hours for the purposes of
establishing the customer's monthly billing demand. However, should integrity testing occur
during both on-peak and off-peak hours, no demand peaks and/or resultant billing demand will
be waived for that month.
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