Application of Time-Of-Use Rates by an Air Separation Company

Abstract

Because our production process requires large amounts of electricity and since electricity purchases are our only major variable production costs, we in the air separation industry are very sensitive to the cost of power. We can be expected to take advantage of any rate that can help us reduce our electric bills. The favored method is to use interruptible rates which offer the most significant discounts in exchange for less reliable service. Time-of-use rates are another means to cost reduction, but the savings are usually of a lesser magnitude than available through interruptible rates. This paper provides an overview of our evaluation of the time-of-use rales.