CHAPTER 4 PRICING AND TARIFF OF ELECTRICITY Latest PDF

BEKP 4853
ENERGY UTILIZATION &

CONSERVATION
Chapter 4
Pricing & Tariff of Electricity
BEKP 4853 Energy Utilization and Conservation 1

LEARNING OUTCOMES
At the end of this lecture, student should be able to:

1. Explain the principles behind pricing and tariff rate determination.
2. Explain the guidelines of electricity tariff rate and define the typical
rate structures.
3. Calculate the cost of electricity
4. Calculate the maximum and average demand power
5. Define the large power customer (LPC)
6. Demand side management tariff initiative
7. Analyze the penalty & power factor correction in electrical bill
8. Explain the importance of power factor management / correction
strategy (PF/ PQ / THD)

INTRODUCTION
 The Ministry of Energy, Green Technology and Water (KeTTHA)
regulates the electricity tariffs charged by utilities to final consumers in
Peninsular Malaysia and Sabah in pursuance of the Electricity Supply Act
1990.
 Among the principles applied in determining tariff rate is:

– that tariff should reflect the cost of supply,
– provide adequate revenue for the development of the power sector,
– competitiveness among the industries and services,
– affordability of the consumers and social economic objectives of the
Government

INTRODUCTION
 Effective 1st January 2014, the electricity tariff was reviewed
 It is structured to balance between protecting low income group and

sustaining the nation's competitiveness
 The new electricity tariff will be put in place in line with the
Government’s aspiration towards gradually phasing out energy subsidies
through the Subsidy Rationalisation Programme.
 Prior to that, the last review was carried out in 1st June 2011

INTRODUCTION
 The electricity tariff rate are based upon the following guidelines:
• The amount of energy consumed (kWh)
• The maximum demand at which energy is consumed (kW)
• Peak / off-Peak period
• The power factor of the load
• The connected load

ENERGY PRICING STRUCTURE
 Change of fuel price directly impact cost of electricity
 Gas price is fixed to the specific formula, review for every 6 month.
 Coal price is determined by market price.
 Cost of electricity constitute cost for

 Generation 70%
 Delivery 10%
 Distribution 20%

TARIFF
Electricity Tariff Review = Base Tariff + Imbalance Cost Pass-Through (ICPT)

TARIFF
Imbalance Cost Pass-Through (ICPT) Comprises Two Components

TARIFF
82% of Tariff Increase in January 2014 is due to Reduction of Gas Subsidy,
Introduction of LNG at Market Price and Increase in Coal Benchmark Market Price

TARIFF
Frequency of Review & Underlying Assumptions
1
5

TARIFF
IBR Timeline
16

ELECTRICITY SUPPLY PROCESS & COST
RECOVERY
Main Fuel Source Customer
COST & TARIFF
100% of G, T and 75% of D

Cost (New + Existing Infrastructure) 25% of New Distribution
Recovery in from Electricity Bill/Tariff (Maximum Infrastructure Recovered via
General Demand & Energy Charge, Connected Load Connection Charge
Charge, Power Factor etc.)

TNB ELECTRICITY BILL COMPONENTS
Main
Components
MV & HV Only ALL Customer
Other
Components
Notes:
1. CLC =
Connected Load
Charge
2. KWTBB=
Kumpulan Wang
Tenaga Boleh
Baharu
3. CLC, PF and
1% for Late
Payment are
penalty charges

ENERGY PRICING AND COST
 The Electrical power utility divide their customers into categories,

according to their power sectors:
1. Domestic
2. Commercial
3. Industrial
4. Mining
5. Street lighting
6. Agriculture
7. Top-up and Standby services

DEFINITIONS
 “COMMERCIAL SUPPLY”
means the supply of energy from the Company's supply lines to all
commercial premises including office block, shop, go down, restaurant,
school, hotel, boarding house, farms, estate, port, broadcasting and
telecommunication installation, cinemas and entertainment locations,
military and Government installations and hospital, and any supply used
in the construction or building activities, but excluding private dwellings
and industrial premises.

DEFINITIONS
 “INDUSTRIAL SUPPLY”
means supply of energy to industrial operation such as manufacturing,
quarrying, mining, shipbuilding business, and to consumers who utilize
energy for the purpose of pumping water, in whose premises electric
motors and plants are used in connection therewith and the total
wattage of lamps and air-conditionings installed for purpose of office
use shall not exceed twenty per cent (20%) of the total wattage of all
electric equipment installed

DEFINITIONS
 “DOMESTIC SUPPLY”
means supply of energy to premises used only for private dwelling purposes,
provided that no commercial activity is carried out in such premises.
 “CO-GENERATOR”
means a generator who that uses a single primary energy source to sequentially
generate two different forms of useful energy for its own use at an efficiency
rate of more than 70%. Services offered to co-generators are:
 Top-up supply: The additional supply required by a Co-generator who that
does not produce sufficient electricity for its own use.
 Standby supply: The supply that TNB provides to a Co-generator in the
event that the Co-generator does not generate electricity due to plant failure
or planned shutdown for maintenance.

DEFINITIONS
 “OFF-PEAK PERIOD”
means the period between 2200 hours and 0800 hours
(Monday to Sunday)
 “PEAK PERIOD”
means the period between 0800 hours and 2200 hours
(Monday to Sunday)
 “MAXIMUM DEMAND”
the largest number of kilowatt-hours supplied during any thirty minutes period
in a month.

DEFINITIONS
 “MONTH”
means the period between two successive meter readings, meters are
normally read at intervals of approximately thirty days
 “PUBLIC LIGHTING SUPPLY”

means supply of energy to any local authorities in respect of street
lightings and other general lighting purposes

DEFINITIONS
 “CONNECTED LOAD CHARGE (CLC)”

CLC is a mitigating tool to discourage consumers from over declaring
their load requirement. Over declaration will lead to over plant up
and waste of resources and increase in reserve margin. Without CLC,
other consumers have to also pay for the unnecessary higher cost of
electricity due to wastage and this is unfair to those who properly
declare. Other utility who does not have CLC penalty, recover their
demand component or fix cost via imposing contract capacity charge
through their tariff rate based on consumer declaration.

DEFINITIONS
 “Extra Low Voltage” Refer to voltages < 50V

 “Low Voltage” Refer to voltages from 50V – 1000V
 “Medium Voltage” Refer to voltages from 1kV – 35kV
 “High Voltage” Refer to voltages from 35kV – 230kV
 “Extra High Voltage” Refer to voltages from 230kV – 800kV

TNB Electricity Tariff are available for the following consumers:
• Tariff A – Domestic
• Tariff B – LV Commercial
• Tariff C1 - Medium Voltage General Commercial
• Tariff C2 – Medium Voltage Peak/ Off Peak Commercial
• Tariff D – LV Industrial
• Tariff E1 – MV General Industrial
• Tariff E2 – MV Peak/ Off Peak Industrial
• Tariff E3 – HV Peak/ Off Peak Industrial
• Tariff F1 – LV Mining
• Tariff F2 – MV General Mining
• Tariff F3 – MV Peak/Off Peak Mining
• Tariff H1 – LV Specific Agriculture
• Tariff H2 – MV General Specific Agriculture
• Tariff H3 – MV Peak/Off Peak Agriculture

Rate Structures - Domestic

Rate Structures - Domestic

Rate Structures – LV Commercial
BEKP 4853 Energy Utilization and Conservation

30
Rate Structures – LV Commercial

31
Rate Structures – MV Commercial


Rate Structures – LV Industrial

Rate Structures – LV Industrial




Rate Structures – LV & MV MINING

Rate Structures – Street Lighting,
Neon & Floodlight

Rate Structures – LV & MV AGRICULTURE

RATE STRUCTURES FOR TOP-UP & STANDBY
Tariff rates for Top-up and Standby Services (only for Co-generators)



OTHER APPLICABLE CHARGE
 Power Factor (PF) Charge

 Customer must achieve a minimum Power Factor of 0.85 for
medium and low voltage level and 0.90 for high voltage
level. A penalty shall be imposed if this minimum PF is not
achieved.
 Late Payment Penalty

 A surcharge of 1% per month shall be imposed for customer
who fail to pay their current bill in full within the stipulated
timeframe.
 33% Surcharge for Temporary Supply

 A consumer who applies for temporary supply shall be
charged at the tariff rate appropriate to their category plus
33% surcharge on the monthly bill.

 1.6% as Feed-in-Tariff (FiT) or KWTBB for Renewable Energy.

 In line with the Renewable Energy Act 2011 (RE Act 2011), the
Renewable Energy (RE) fund (KWTBB) is collected through a
surcharge of consumers’ electricity consumption at the rate of 1.6%.
TNB is only the collecting agent of the fund for the Government.
 Connected Load Charge (CLC)

 Applicable for the first 6 years from the date of supply connected.
 Customers must achieved at least 75% of its declared maximum
demand.
 To mitigate risk on non utilization of asset capacity made available
to customer based on their declared load requirement which is not
recoverable from tariff for the above period only.
 A penalty of RM8.50/kW will be charged for every kW shortfall
between the actual maximum demand used compared to the
Reference Maximum Demand (RMD).

 CLC CALCULATION
 Nevertheless, for the first 3 years, the CLC will be based on staggered percentage to assist
consumer during the initial stage of their operation.
 The method in determining Reference Maximum Demand* for calculating CLC are as
follows:
YEAR REFERENCE MAXIMUM DEMAND*
1 0% x 75% x Declared Maximum Demand(CLC exempted for the first year only)
2 50% x 75% x [Declared MD or Highest Recorded MD, whichever is higher]
5 100% x 75% x [Declared MD or Highest Recorded MD, whichever is higher
6 100% x 75% x Declared MD or Highest Recorded MD, whichever is higher]
Note: CLC is applicable when MD recorded < Reference MD.

 A penalty of RM8.50/kW will be charged for every kW shortfall between the Actual
Maximum Demand used compared to the Reference Maximum Demand (RMD).
 CLC is calculated monthly.
 CLC penalty RM8.50 is well below the Maximum Demand rate.

EXAMPLE OF CLC CALCULATION
ACTUAL
MAXIMUM DEMAND
REFERENCE MAXIMUM DEMAND MAXIMUM
YEAR DECLARED CLC PENALTY (RM)
(RMD) DEMAND (AMD)
(ASSUME 10,000KW)
(KW)
1 10,000kW 0% x 75% x 10,000kW = 0kW 100kW Not Applicable
2 10,000kW 50% x 75% x 10,000kW = 3,750kW 5,000kW No penalty. AMD > RMD
CLC = RM8.50 x ( 5,625kW - 5,000kW )

3 10,000kW 75% x 75% x 10,000kW = 5,625kW 5,000kW
= RM5,312.50
Few activities could be carried out by customers that assist in reducing MD charges such as:
 Practicing demand side management such as peak shift i.e. shifting their peak operation/consumption to off
peak period as MD charges is not applicable during off-peak period for customer with peak/off-peak tariff
 Opting for any promotional scheme offered by TNB relating to MD such as Sunday Tariff Rider Scheme
(STR).
 Starts your motor/equipment in stages or during off-peak period

EXAMPLE OF TARIFF C2 CUSTOMER
MD charge contributes about
23% of the total bill amount.
Hence, understanding and
managing MD can save
electricity cost.
Consumption Detail:
MD Peak = 1,811kW
Off-Peak Hours Peak Hours Off- MD Off-Peak = 1,254kW
(10pm-8am) (8am-10pm) Peak
Hours
Peak = 575,453kWh
(10pm Off-Peak = 320,668kWh
-8am)
Electricity Bill Calculation
Tariff C2 - Medium Voltage Peak/Off-Peak Commercial Bill Amount % of Bill

Tariff Usage
(RM) Amount
For each kilowatt of maximum
demand per month during the peak RM/kW 45.1
period
1,811 81,676.10 22.5%
For all kWh during the peak period sen/kWh 36.5 575,453 210,040.35 57.8%
For all kWh during the off-peak 320,668 71,829.63 19.8%
sen/kWh 22.4
period
The minimum monthly charge is RM600.00 Total Bill 363,546.08 100.0%

53
TARIFF BASED ON ENERGY
 The cost of electricity depends, first, upon the amount of energy
(kWh) consumed per month
 However, even if customer uses no energy at all, he has to pay a

minimum service charge, because it costs money to keep him
connected to the line
 As consumption increases, the cost per kWh also increase, usually

on a sliding scale
 Domestic customers pay for the amount of energy (kWh) used

only.

TNB BILL
Charge according to the amount of energy used = Unit (kWh) x rate

ENERGY CALCULATION
Energy Appliance Power Duration

= X
(kWh) (kW) (hr)
1kW Air-conditioner will consume 1kWh of energy in 1 hour
40W Florescent light will consume 0.4kWh in 10 hour

EXAMPLE 1
Billing of a domestic customer
A homeowner consumes 330kWh during the month of June. Calculate the
electricity bill using the domestic rate.
Tariff A - Domestic Tariff

SOLUTION
First 200 kWh @ 21.8 cents/kWh = RM 43.60

Next 100 kWh @ 33.4 cents/kWh = RM 33.40
Total bill for the month = RM 89.00
This represents an average cost of
RM 89.00/330 = 26.97cents/kWh

EXAMPLE 2
A homeowner consumes 530kWh during the month of June. Calculate
the electricity bill using the domestic rate.

RM 169.68/530 = 32.01cents/kWh

EXAMPLE 3

A homeowner consumes 950kWh during the month of June.
Calculate the electricity bill using the domestic rate.

SOLUTION

RM 353.10/950 = 37.17cents/kWh

TARIFF BASED ON DEMAND
 The monthly cost of electricity supplied to a large customer
depends not only the energy consumed, but also on the “largest
average rate” of usage (kilowatt) supplied.
 In other words, the cost also depends on the highest active power
(kW) drawn from the line.
 This demand is affected by the amount of equipment being

operated at the same time.

Example of TNB Half-Hourly Load Profile Pattern
TNB has to cater for the highest required demand at all time to
ensure sufficient supply to customer

 The demand charge is supposed to compensate the utility for the
added cost of the larger generation, transmission lines,
transformers, etc. needed to handle the peaks
 Demand charges are an excellent incentive to do load leveling, or

so-called peak shaving
 To understand the reason for this dual rate structure, consider the
following example.
 Two factories A and B are respectively connected to a high-voltage

line by transformer TA and TB.


 Factory A operates at full-load, night and day, including Saturdays

and Sundays, constantly drawing 1000kW of active power. At the
end of the month (720h), it has consumed a total energy of
1000kW x 720h = 720 000kWh

 Factory B consumes the same amount of energy, but its load

is continually changing. Thus, power fluctuates between
50kW and 3000kW.

 From observation, the capacity of the transformer and

transmission line supplying factory B will be greater than the
supplying factory A.
 TNB must invest more capital to service factory B; consequently,

it is reasonable that factory B should pay more for its energy.
What is the monthly electricity bill for factory A and

factory B?? Assuming they are paying using tariff E1.

Factory A
720,000 kWh @ 28.8 cents/kWh = RM 207,360.00
Demand 1000kW @ 25.3 RM/kW = RM 25,300.00
Total bill for the month = RM 232,660.00

RM 232,660 / 720,000 = 32.3 cents/kWh

70
Factory B
720,000 kWh @ 28.8 cents/kWh = RM 207,360.00
Demand 3000kW @ 25.3 RM/kW = RM 75,900.00
Total bill for the month = RM 283,260.00

RM 283,260 / 720,000 = 39.34 cents/kWh

32.3 cents/kWh
38.34 cents/kWh
 The steadier the power drawn, the less cost paid for the
energy used !!

KILOWATT MAXIMUM DEMAND (MD)
For any month shall be deemed to be twice the largest number of
kilowatt-hours supplied during any consecutive 30 minutes in that
month.
Largest number of kilowatt-hours
supplied during
Bacaan Tertinggi any jam
kilowatt consecutive
dalam 30
kW minutes
30minit berturutan.
kW Maximum Kiraan bagi kW yang biasa untuk

kW Kehendak
Demand
Maksimum
tempoh setiap jam:
kW = kWj
j
Untuk kiraan kW bagi tempoh 30min:
kW = kWj dalam tempoh 30min

30min
= kWj
½j
jam = kWj × 2
30 minit
Satu Bulan

MD CHARGE CALCULATION
Example: Assume E3 Customer
High Voltage Peak/Off-Peak Industrial

Unit E3
Tariff
For each kilowatt of maximum demand per

RM/kW 35.50
month during the peak period
For all kWh during the peak period sen/kWh 33.70
For all kWh during the off-peak period sen/kWh 20.20
The minimum monthly charge is RM600.00
Peak Period : 8am to 10pm (Monday to Sunday)

Off-Peak :10pm to 8am (Monday to Sunday)

TNB RECORDS HALF-HOURLY READING
our Day/Hour 1-Jan-11 1-Jan-11
2-Jan-11 2-Jan-11
00:30 77,380 77,380
63,410 63,410
01:00 57,720 57,720
53,430 53,430
01:30 68,690 68,690
59,700 59,700
02:00
02:30
76,190
56,760
Maximum Demand,kW
76,190
68,640
56,760
53,320
68,640
53,320
03:00 58,500 58,500
56,390 56,390
03:30
04:00
54,090
55,790
MD Peak
54,090
59,220
55,790
58,460
67,190
59,220
58,460
71,700
04:30
05:00
49,510
64,920 MD Off-Peak
49,510
57,010
64,920
67,870 77,380
57,010
67,870 73,370
05:30 76,320 76,320
56,950 56,950
06:00
06:30
46,330
70,430 Through
46,330
57,750
70,430
69,480 46,330
57,750
69,480 36,200
07:00 59,550 59,550
59,570 59,570
07:30 62,090 62,090
59,950 59,950
08:00 63,230 63,230
65,810 65,810
08:30 46,970 46,970
43,280 43,280
09:00 61,520 61,520
66,640 66,640
09:30 59,550 59,550
36,200 36,200
10:00 52,400 52,400
64,400 64,400
10:30 60,770 60,770
58,600 58,600
11:00 53,100 53,100
60,820 60,820
11:30 51,670 51,670
62,810 62,810
12:00 63,110 63,110
57,700 57,700
12:30 66,120 66,120
59,500 59,500
13:00 53,290 53,290
70,540 70,540
13:30 55,680 55,680
58,850 58,850
14:00 64,110 64,110
63,960 63,960
14:30 51,140 51,140
65,020 65,020
15:00 57,900 57,900
62,610 62,610
15:30 65,950 65,950
61,040 61,040
16:00 57,650 57,650
67,150 67,150
16:30 60,790 60,790
58,220 58,220
17:00 58,910 58,910
57,050 57,050
17:30 64,190 Assume 67,190kW is the highest MD for
64,190
68,120 68,120
18:00 61,150 61,150 61,150
18:30 52,100 the month during peak period.
52,100
55,120 55,120
19:00 63,420 63,420
65,170 65,170
19:30 51,580 51,580
54,010 54,010
20:00 61,450 61,450
71,700 71,700
20:30 53,880 Therefore
53,880
50,550 50,550
21:00 59,810 59,810
64,550 64,550
21:30 67,190 MD charge = 67,190kW x RM35.50/kW
67,190
58,350 58,350
22:00 54,440 54,440
67,740 67,740
22:30 60,780 60,780
68,210 = RM2,385,245 68,210
23:00 59,920 59,920
58,970 58,970
23:30 62,880 62,880
48,110 48,110
24:00 60,600 60,600
73,370 73,370

67,190 is charged
Off-Peak Peak for MD
component Off-Peak
77,380 not
charged for
billing
Maximum Demand,kW Customer saved on Off-Peak MD

MD Peak 67,190 71,700
MD Off-Peak 77,380 73,370
of 10,190kW or RM361,745/month
Through 46,330 36,200 (10,190kW x RM35.50)
1-Jan-11
Day/Hour 2-Jan-11 1-Jan-11 2-Jan-11
00:30
77,380 63,410 77,380 63,410
01:00
57,720 53,430 57,720 53,430
01:30
68,690 59,700 68,690 59,700
02:00
76,190
02:30
56,760
68,640
53,320
Maximum Demand,kW
Maximum Demand,kW
76,190
56,760
68,640
53,320
03:00
58,500 56,390 58,500 56,390
03:30
54,090
04:00
55,790
59,220
58,460
MD Peak MD Peak
54,090
55,790
67,190 71,700
67,190
59,220
58,460
71,700
04:30
49,510
05:00
64,920
57,010
67,870 MD Off-Peak MD Off-Peak 77,380
49,510
64,920 73,370
77,380
57,010
67,870 73,370
05:30
76,320 56,950 76,320 56,950
06:00
46,330
06:30
70,430
57,750
69,480 Through Through
46,330
70,430 46,330 36,200
46,330
57,750
69,480 36,200
07:00
59,550 59,570 59,550 59,570
07:30
62,090 59,950 62,090 59,950
08:00
63,230 65,810 63,230 65,810
08:30
46,970 43,280 46,970 43,280
09:00
61,520 66,640 61,520 66,640
09:30
59,550 36,200 59,550 36,200
10:00
52,400 64,400 52,400 64,400
10:30
60,770 58,600 60,770 58,600
11:00
53,100 60,820 53,100 60,820
11:30
51,670 62,810 51,670 62,810
12:00
63,110 57,700 63,110 57,700
12:30
66,120 59,500 66,120 59,500
13:00
53,290 70,540 53,290 70,540
13:30
55,680 58,850 55,680 58,850
14:00
64,110 63,960 64,110 63,960
14:30
51,140 65,020 51,140 65,020
15:00
57,900 62,610 57,900 62,610
15:30
65,950 61,040 65,950 61,040
16:00
57,650 67,150 57,650 67,150
16:30
60,790
17:00
58,910
58,220
57,050
Assume 71,700kW is the highest MD for
60,790
58,910
58,220
57,050
17:30
64,190
18:00
61,150
68,120
61,150
the month during peak period.
64,190
61,150
68,120
61,150
18:30
52,100 55,120 52,100 55,120
19:00
63,420 65,170 63,420 65,170
19:30
51,580
20:00
61,450
54,010
71,700
Therefore
51,580
61,450
54,010
71,700
20:30
53,880 50,550 53,880 50,550
21:00
59,810 64,550 MD charge = 71,700kW x RM35.50/kW
59,810 64,550
21:30
67,190 58,350 67,190 58,350
22:00
54,440 67,740 54,440 = RM2,545,350
67,740
22:30
60,780 68,210 60,780 68,210
23:00
59,920 58,970 59,920 58,970
23:30
62,880 48,110 62,880 48,110
24:00
60,600 73,370 60,600 73,370

FKE POWER CONSUMPTION GRAPH

DEMAND METER
The graph in Factory A shows a number of power spikes that last

for a very short time.
These spikes correspond to the high power drawn by the motors

when they are started up.
However, the high start-up power does not last long enough to
warrant the installation of correspondingly large equipment by the
utility company.

DEMAND METER
How long does the power surge have to last, in order to be

considered significant?
The answer depends upon several factors. But the period is usually
taken to be 10, 15, or 30 minutes.
For TNB, the averaging period is 30 minutes. It is called

DEMAND INTERVAL

DEMAND METER
 To monitor the power drawn by a plant, a special meter is

installed at the customer’s service entrance.
 It automatically measures the average power measured during

successive demand interval (30 minutes).
 The average power measured during each interval is called the

DEMAND

DEMAND METER
Analog Demand meter

 For analog meter, the meter carries 2 pointers. The first pointer
indicate the current demand pushes up the second pointer.
 The second pointer simply sits at the highest position to which it is

pushed.

DEMAND METER
Digital Demand meter

 Digital Demand meter has internal averaging software that
records the highest average rate of usage over any 30 minute
period.
 At the end of the month, a utility employee takes the maximum

demand reading and resets the pointer to zero.

EXAMPLE
The graph below represents the active power drawn by a large factory
between 7.00 and 9.00 in the morning. The demand meter has a 30
min demand interval. Let us assume that at 7.00 the first pointer reads
2MW while the second pointer indicates 3MW. What are the meter
readings at the following times:
a) 7.30
b) 8.00
c) 8.30
d) 9.00

SOLUTION
a) According to the graph, the average power (or demand) between 7.00
and 7.30 is 2MW. Consequently, pointer 1 continues to indicate 2MW at
7.30am and pointer 2 stays where it was at 3MW.

SOLUTION
b) The average power or demand between 7.30 and 8.00 is equal to the
energy divided by time.
AD = (7MW x 5 min + 2MW x 5 min + 4MW x 20min) = 4.17MW
30 min
During this 30-min interval, both pointers gradually moves to 4.17MW.

SOLUTION
c) The demand between 8.00 and 8.30 is

AD = (7 x 5 + 8 x 5 + 4 x 5 +3 x 5 + 5 x 5 + 1 x 5 ) = 4.67MW
30 min
Thus, at 8.30 both pointers have moved up to 4.67MW.

SOLUTION
d) The demand between 8.30 and 9.00 is

AD = (1 x 5 + 12 x 5 + 1 x 20) = 2.83MW
30 min
During this 30-min interval, pointer 1 drops from 4.67MW to 2.83MW,
but pointer 2 sits at 4.67MW, the previous maximum demand.

DEMAND CONTROLLER
 For industrial and commercial consumers the maximum
demand plays an important role in overall electricity bill.
 Substantial savings can be made by keeping the maximum

demand as low as possible.
 Thus, an alarm can be installed to sound a warning whenever

the demand is about to exceed a pre-established maximum.
 Loads that are not absolutely essential can then be temporary

switched off until the peak has passed.

DEMAND CONTROLLER
 This procedure can be carried out automatically by a demand
controller that connects and disconnects individual loads so
as to stay within the prescribe maximum demand.
 Such a device can easily save thousands of dollars per year

for a medium power customer.

DEMAND SIDE MANAGEMENT TARIFF
INITIATIVE
 “Demand Side Management (DSM)” is the

modification of consumer’s demand of electricity
through various methods such as financial incentives
and consumer education
 Usually the goal of DSM is to encourage the

consumers to use less energy during peak hours or
to move the time of energy use to the off-peak hours -
night

NEED FOR DEMAND SIDE MANAGEMENT

DEMAND SIDE MANAGEMENT (DSM)
 The peak demand of 4,300 MW is there for only 5-6
hours in the evening
 The base demand is 3,000 MW, which is much less

than the peak demand of 4,300 MW
 To meet the extra demand utility has to arrange

additional installed capacity or purchase power at
high rate
 Thus utility will always try to encourage consumers

to:
 Use less energy during Peak hours
 Shift energy use to Off Peak hours

DEMAND SIDE MANAGEMENT (DSM)

BENEFITS OF DSM

TYPE OF DSM:
1. Special Industrial Tariff (SIT) – Who eligible?
 Industrial consumers under tariff categories D, E1, E2 and E3 who

have been in business for at least a year, including industrial
consumers enjoying the Off Peak Tariff Rider (OPTR) and Sunday
Tariff Rider (STR) schemes.
 Industrial consumers whose total annual electricity cost is 5% or

more of the total annual cost of its operations

TYPE OF DSM:
1. Special Industrial Tariff (SIT) (cont..)
 The computation of the 5% threshold shall be as follows:

 Total annual electricity bill (energy and maximum demand
charges) x 100% .
 Total company's annual audited cost of its operations Total
company annual audited cost of its operations includes but is not
limited to:
• Operating costs (which include cost of goods sold, cost of
• production, depreciation, exceptional items, etc.)
• Foreign exchange
• Share of results of associates (if applicable)
• Finance cost
• Extraordinary items

TYPE OF DSM:
2. Off-Peak Tariff Rider (OPTR)
 Offered to all MV commercial and industrial customers who

are currently not enjoying any off-peak tariff usage
 MV general commercial tariff C1
 MV general industrial tariff E1
 MV general special industrial tariff E1s
 Enjoy 20% discount on electricity usage during off-peak
hours (10.00 pm to 8.00 am) everyday

TYPE OF DSM:
You are eligible to enroll in the OPTR scheme if:
 You are an existing TNB customer under the C1, E1, or E1s
tariff.
 Your have been receiving electricity supply from TNB for at least
one (1) month.
 Your latest Load Factor is higher than the average Load Factor
over six (6) months prior to your application.
 You do not have an outstanding amount not more than the total
deposit/bank guarantee paid. Otherwise this outstanding
amount must be settled before applying.

TYPE OF DSM:
3. Sunday Tariff Rider (STR)

 Offered to all medium or high voltage industrial customers
 MV general industrial tariff E1
 MV general special industrial tariff E1s
 MV Peak/Off Peak industrial tariff E2
 MV Peak/Off Peak special industrial tariff E2s
 HV Peak/Off Peak industrial tariff E3
 HV Peak/Off Peak special industrial tariff E3s
 Customers will still pay the same rates on electricity
usage as their current tariff, however MD charges are not
applied to any electricity usage on Sundays

TYPE OF DSM:
You are eligible to enroll in the STR scheme if:
 You are an existing TNB customer under the E1, E1s, E2, E2s,
E3, or E3s tariff.
 You do not have an outstanding amount not more than the total
deposit/bank guarantee paid. Otherwise this
 outstanding amount must be settled before your application can
be considered.

NEW INITIATIVE TARIFF FROM TNB: ETOU
ETOU = ENHANCED TIME OF USE.

TIME OF USE (TOU) VS
ENHANCE TIME OF USE (ETOU)
TOU Tariff
 TOU tariff has 2 time zones (Peak and Off-Peak)

TIME OF USE (TOU) VS
ENHANCE TIME OF USE (ETOU)
ETOU
 ETOU tariff scheme 3 time zones (Peak, Mid-Peak and Off-Peak) on Monday
Friday
 Only 1 time zone (Off-Peak) applied on Saturday, Sunday and Public Holidays.

104
METERING METHODOLOGY FOR LARGE
POWER CONSUMER (LPC)
Definition of Large Power Consumer:
 TNB Commercial Circular No.91 stated that a large power
consumer is one who is supplied via CT metering and includes
domestic, commercial, industrial and mining customers taking
LV, MV and HV.
 LPC Billing components:

 kWh unit consumption
 kW maximum demand charges and satisfying initial MD
declaration
 kVarh units for calculation of the monthly average power
factor

TARIFF BASED ON POWER FACTOR
 Power factor is the ratio of the active power P to the apparent power S.
Power Factor = P/S = cos 
where; θ is the angle between V & I
 Essentially, power factor is a measurement of how effectively electrical power

is being used.
 In an electric power system, a load with low power factor draws more current
than a load with a high power factor, for the same amount of useful power
transferred.

 The higher currents increase the energy lost (I2R) in the distribution
system, and require larger wires and other equipment
 Many ac machines like induction motors and transformers, absorb

reactive power to produce their magnetic fields.
 The power factor of these machines is low.
 A low power factor increases the cost of electrical energy supply

Consider 2 factories X and Y that consume the same amount of energy
(kWh) and have the same maximum demand (kW). However, power factor
of X is unity while that of Y is 50%.

 Apparent drawn by factory X:
S = 1000kVA
 Apparent power drawn by factory Y

S = 2000kVA
 Because the line current is proportional to apparent power (S = VI), factory

Y draws twice as much current as factory X.
 The line conductors, transformers, circuit breakers, disconnect switches, and

other devices supplying energy to Y must have twice the rating of those
supplying X.

 The utility company must invest more capital to service factory Y;

consequently it is logical that it should pay more for its energy, even
though it consumes the same amount.
 In practice, the rate structure is designed to automatically increase the

billing whenever the power factor is low.
 Most electrical utilities require that the power factor of their industrial
clients be 90% or more, in order to benefit from the minimum rate.

 When PF is too low, it is usually to the customer’s advantage to improve

it, rather than pay the higher monthly bill.
 This is usually done by installing capacitors at the service entrance to the

plant, on the load side of the metering equipment.
 This capacitors may supply part, or all, of the reactive power required by
the plant.
 Industrial capacitors for power factor correction are made in single-phase

and 3-phase units rated from 5kVAr to 200kVAr.

HOW????
old P
new
Qold Qnew
+ QC
Sold Snew

TNB PF SURCHARGE
 TNB imposes on all industrial & LPC to maintain their power factor to no
less than 0.85
 Failing to maintain the required PF will result on a PENALTY being imposed

on them.
 The penalty is incorporated into the TARIFF structure.
 For all TARIFFs except A and G, the consumers shall use their best
endeavors to obtain highest possible PF in the operation of any of their
electrical installations.

TNB PF SURCHARGE
(1) Below 0.85 and up to 0.75 (0.85>PF≥0.75) lagging, a supplementary

charge of 1.5% of the bill for that month for each 0.01 unit below 0.85
and up to 0.75 lagging PF will be added to the bill for that month, and
(2) Below 0.75 (0.75>PF) lagging, in addition to the charge payable under
(1) above, a supplementary charge of 3% of the bill for that month for
each 0.01 unit below 0.75 lagging PF will be added to the bill for that
month.

EXAMPLE
A LPC called Fujitsu has a monthly PF at 0.6 lagging, and its

monthly consumption (electricity bill) is RM4,800.00.
What will be its monthly PF PENALTY?

SOLUTION
 Based on the tariff,
(1) 0.85 -0.75 = 1.5% x 10 units lagging = 15%
(2) 0.75- 0.60 = 3% x 15 units lagging = 45%
Total extra levied = 60%
Penalty charge = 60% x RM4,800 = RM2,880
Total monthly bill = RM4,800 + RM2,880 = RM7,680

POWER FACTOR CORRECTION
 Power factor correction is economically feasible whenever the decrease in
the annual cost of electricity exceeds the amortized cost of installing the
required capacitors.
 In some cases the customer has no choice but must comply with the
minimum power factor specified by the utility company.
 The power factor may be improved by installing capacitors at the service

entrance to the factory or commercial enterprise.
 It may be desirable to correct the power factor of an individual device, or

machine, if its power factor is particularly low.

EXAMPLE
A factory draws an apparent power of 300kVA at a power

factor of 65% (lagging). Calculate the kVar of the capacitor
bank that must be installed at the service entrance to bring the
overall power factor to:
a) Unity (PF = 1)
b) 85% lagging

SOLUTION
a) Unity power factor
Apparent power absorbed by the plant is
S = 300kVA PF = 65% = 0.65  = cos-10.65 = 49.5o
Active power absorbed by the plant is

P = S cos  = 300 x 0.65 = 195 kW
Reactive power absorbed by the factory is

Q = S sin  = 300 sin 49.5o = 228 kVAr
To raise the power factor to unity, we have to supply all the reactive power
absorbed by the load (228kVAr).
 The three-phase capacitors rating is 228kVAr.

119
SOLUTION
b) 85% lagging
PF = 85% = 0.85  = cos-10.85 = 31.78˚
The new reactive power supplied by the line is

Qnew = P Tan  = 195 Tan 31.78˚ =121kVAr
Because the load still draws 228kVAr but the line now supply only
121kVAr, the difference must come from the capacitors.
The rating of these units is Q = 228 – 121 = 107kVAr

SOLUTION
The demand of commercial and industrial customers varies
greatly throughout the day. As a result, it is common practice
install a variable capacitor unit at the service entrance.
In the case of large customers,
an automatic controller switches
capacitor units in and out so
that the power factor always lies
slightly above 95%.

EXAMPLE
A 600kW induction furnace connected to an 800V single-phase line operates
at a power factor of 0.6 lagging. It is supplied by a 4kV line and a step-down
transformer, shown in figure below
a) Calculate the current in the 4000V line.
b) If a 500kVAr capacitor is installed on the HV side of the

transformer, calculate the new power factor and the new line current.

SOLUTION
 This is an interesting example where individual power factor correction

must be applied. The reason is that the induction furnace is a single-phase
device whereas the plant is certainly energized by a 3-phase line.
 We cannot correct the power factor of single-phase equipment by adding

balanced 3-phase capacitors at the service entrance.

SOLUTION
a) Active power absorbed by the furnace is

P = 600kW
Apparent power absorbed by the furnace is

S = P / cos  = 600 / 0.6 = 1000kVA
Current in the 4kV line is

I = S / V = 1000kVA / 4kV = 250A

SOLUTION
b) Reactive power absorbed by the furnace is
Q = √(S2 –P2)= √(10002 –6002) = 800kVAr
Reactive power supplied by the capacitor is Qc = 500 kVAr
Reactive power that the line must supply is

QL = Q – Qc = 800 - 500 = 300kVAr
Active power drawn from the line is PL = 600kW
Apparent power drawn from the line is

SL = √PL2 + QL2 = √6002 + 3002 = 671kVA

SOLUTION
New power factor of the line is
Cos  = PL/SL = 600 / 671 = 0.89
The new line current is

I = SL/V = 671000/4000 = 168A
By installing the single-phase capacitor bank, the line current drops from
250A to 168A, which represents decrease of 33%.

SOLUTION
 Its follows that the wire I2R loss and voltage drop on the supply line will
be greatly reduced.
 Furthermore, the power factor rises from 60% to 89% which will
significantly reduce the monthly electricity bill.
 Finally, the 3-phase line currents are more likely to be reasonably

balanced at the service entrance despite the presence of this large single-
phase load.

EXAMPLE
A paper mill consumes 28 million kilowatt-hours of energy per
month at power factor of 83%. The demand meter registers a
peak demand of 43000kW. Calculate the monthly bill using the
large power rate schedule given as follows:
TARIFF CATEGORY UNIT RATES
2. Tariff E1 - Medium Voltage General Industrial Tariff
For each kilowatt of maximum demand per month RM/kW 25.3
For all kWh sen/kWh 28.8

SOLUTION
Usage: 28,000,000 x RM 0.288 = RM 8,064,000.00
Maximum demand: 43,000 x RM 25.3 = RM 1,087,900.00
Power Factor Penalty:

Power Factor = 0.83
(a) 0.85 -0.83 => 1.5% x 2 = 3.0%
Penalty = 3.0% x RM 8,064,000 = RM 241,920.00
Total Bill = RM 8,064,000.00 + RM 1,087,900.00 + RM 241,920.00

= RM 9,393,820.00

EXAMPLE
Billing for LPC
A small industry operating day and night, 7 days a week,
consumes 560,000kWh and 555,427kVarh per month. The
maximum demand is 1200kW. Calculate the electricity bill using
the tariff given as follows:
TARIFF CATEGORY UNIT RATES
2. Tariff E1 - Medium Voltage General Industrial Tariff

For each kilowatt of maximum demand per month RM/kW 25.3
For all kWh sen/kWh 28.8

SOLUTION
Usage: 560,000 x RM 0.288 = RM 161,280.00
Maximum demand: 1,200 x RM 25.3 = RM 30,360.00
Power Factor Penalty:

Power Factor = 0.71
(a) 0.85 -0.75=> 1.5% x 10 = 15.0%
(b) 0.75 -0.71=> 3.0% x 4 = 12.0%
Penalty = 27.0% x RM 161,280 = RM 43,545.60
Total Bill = RM 161,280.00 + RM 30,360.00 + RM 43,545.60

= RM 235,185.60

IMPORTANCE OF POWER FACTOR
MANAGEMENT
1. The need to control the reactive consumption
 Impact on power utility company
 Higher capital cost
 Higher power purchase from IPP
 Higher line loss
 Wasted fuel
 Lower profit
 Why power utility support PFC?
 Sharply reduce the demand for reactive power
 Reduce losses
 Improve voltage regulation
 Increase capacity without further investment in generation or
distribution

IMPORTANCE OF POWER FACTOR
MANAGEMENT
2. Benefits to customers
 1% to 6% reduction in demand and energy
consumption from power factor management program
 Reduce the electricity bill
 Stabilize incoming line voltage
 Reduce internal line loss and heat buildup
 Increase the operating life of motors
 Increase the available capacity of incoming supply lines
and transformers

MEASURING ELECTRICAL ENERGY
Power utilities use the energy meter to measure the energy

supplied to industry and private homes.
Electric meters are typically calibrated in billing units, the

most common one being the kilowatt hour
One kilowatt-hour (kWh) is exactly equal to 3.6MJ

(1Vx1Ax1000x3600s)

MEASURING ELECTRICAL ENERGY
Meter which measure industrial and residential energy are

called watt-hour meters; they are designed to multiply power
by time.
The electricity bill is usually based upon the number of

kilowatt hours consumed during one month.
Watt-hour meters must be very precise. Induction and digital

watt hour meters are used for residential metering.

UNDERSTAND AND MINIMISING ENERGY
BILL
Example : UTeM Electricity Bill June 2012
Maximum Load Recorded 5,793.00
Reading
ID Number Previous Bill Current Bill Usage Unit
M AC0800010 0.00 388,018.00 388,018.00 kVA
M AC0800010 0.00 5,184.83 5,184.83 kW
M AC0800010 0.00 1,456,533.00 1,456,533.00 kWh
Charge
PRKR Unit Price Cost
Consumption tar.C1U 1,456,533.00 0.312 454,438.30
Consumption MD.C1U 5,184.83 25.90 134,287.16
What is the total bill???

UNDERSTAND AND MINIMISING ENERGY
BILL
Example : UTeM Electricity Bill June 2012
Calculation :
1) Consumption 1,456,533.00 x 0.312 = RM454,438.30
2) MD 5,184.83 x 25.90 = RM134,287.16
3) TNB discount (10%) = RM58,872.55 (-)
4) Power Factor Penalty = RM0.00

PF = kWh/√(kWh2 + kVAr2) = 0.966
Total Bill = RM 529,852.91

POWER QUALITY (PQ) CORRECTION

WHAT IS POWER QUALITY?
 Definitions of the quality of the supplied voltage (what about the current?)
Power quality is generally measured by the shape of the voltage waveforms
supplied at the customer's meter. The voltage waveforms may reduce, increase,
fluctuate or distort due to controllable or uncontrollable circumstances.
 Usually referred in negative contexts – power quality problems
 Measurement
 IEC 61000-4-7 Voltage Flicker
 IEC 61000-4-15 Harmonic Measurement
 IEC 61000-4-30 Measurement Accuracy (“Class A”, “Class S”)
 IEC 62052/3-11, 22, 23 Energy Accuracy (“Class 0.2S”, “Class 0.5S”)

POWER QUALITY STANDARD
 IEC 61000-2-1: Definition of Electromagnetic Compatibility (EMC) EMC is concerned with the possible degradation of
the performance of electrical and electronic equipment's due to the disturbances present in the electromagnetic
environment, in which the equipment operates
 IEC 61000-2-4: Compatibility levels in industrial plants for low frequency conducted disturbance
 IEC 61000-2-12: Electromagnetic compatibility (EMC) - Part 2-12: Environment - Compatibility levels for low-frequency
conducted disturbances and signaling in public medium-voltage power supply systems
 IEC 61000-3-6: Assessment of emission limits for distorting loads in MV and HV power systems.
 IEC 61000-3-7: Assessment of emission limits for fluctuating loads in MV and HV power systems.
 MS 1760:2004: Guide on voltage dips and short interruptions on Public Power Supply System. The original standard is the
IEC/TR 161000-2-8
 IEC 61000-4-11: Immunity test for voltage dips, short interruptions and voltage variation for equipment less than 16 Amp
 IEC 61000-4-34: Immunity test for voltage dips, short interruptions and voltage variation for equipment more than 16
Amp
 Engineering Recommendation P28 : Planning limits for voltage fluctuations caused by industrial, commercial and
residential equipment in the United Kingdom.
 Engineering Recommendation G5/4 : Planning levels for harmonic voltage distortion & connection of non-linear
equipment to Transmission and Distribution Systems in the United Kingdom.
 SEMI F47: Specification for semiconductor processing equipment voltage sag immunity
 SEMI F49 : Guide for semiconductor factory system voltage sag immunity

POWER QUALITY PARAMETERS
Frequency
Voltage Variations
Voltage Flicker
Voltage Dip

Interruptions
Temporary Overvoltage
Transients

Unbalance
Harmonics
Interharmonics
HARMONICS
+ =
sin( 5 x ) sin( 5 x )
f ( x )  sin( x ) f ( x)  f ( x )  sin( x ) 
5 5

IEEE1159-EN50160 LEVELS

THD-TOTAL HARMONIC DISTORTION
100 ( V 2  V 3  .....  V n )
2 2 2
THD(V)  (%)
V 1
  ..... 
2 2 2
THD(I) 
100 ( I 2 I
3 I n
)
(%)
I 1
IN, VN – Individual Harmonics of order N

TDD - TOTAL DEMAND DISTORTION
  ..... 
2 2 2
TDD(I) 
100 ( I 2 I 3 I n
)
(%)
I max demand

SHOULD WE CARE ABOUT POWER QUALITY?
Comprehensive Research in Europe in 1400 sites at 8 countries reports that
20% experience the following:
 Computer lockouts (20%)
 Light flickering (22%)
 Electronic card failures (18%)
 Power Factor correction system failures (17%)
 Failures in high load switching (16%)
 Neutral conductor overheating (12%)
 Unexpected breaker operation (11%)
 Power meters inaccurate readings (6%)
And of course excess losses and downtime

CAUSES AND SOLUTIONS

THANK YOU

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BEKP 4853

ENERGY UTILIZATION &

BEKP 4853 Energy Utilization and Conservation 1

At the end of this lecture, student should be able to:

BEKP 4853 Energy Utilization and Conservation 2

 Among the principles applied in determining tariff rate is:

BEKP 4853 Energy Utilization and Conservation 3

 Effective 1st January 2014, the electricity tariff was reviewed

 It is structured to balance between protecting low income group and

BEKP 4853 Energy Utilization and Conservation 4

BEKP 4853 Energy Utilization and Conservation 5

 Cost of electricity constitute cost for

BEKP 4853 Energy Utilization and Conservation 6

BEKP 4853 Energy Utilization and Conservation 10

BEKP 4853 Energy Utilization and Conservation 11

BEKP 4853 Energy Utilization and Conservation 14

BEKP 4853 Energy Utilization and Conservation 15

BEKP 4853 Energy Utilization and Conservation 16

COST & TARIFF

100% of G, T and 75% of D

BEKP 4853 Energy Utilization and Conservation 17

MV & HV Only ALL Customer

BEKP 4853 Energy Utilization and Conservation 18

 The Electrical power utility divide their customers into categories,

BEKP 4853 Energy Utilization and Conservation 19

BEKP 4853 Energy Utilization and Conservation 20

BEKP 4853 Energy Utilization and Conservation 21

BEKP 4853 Energy Utilization and Conservation 22

BEKP 4853 Energy Utilization and Conservation 23

 “PUBLIC LIGHTING SUPPLY”

BEKP 4853 Energy Utilization and Conservation 24

 “CONNECTED LOAD CHARGE (CLC)”

BEKP 4853 Energy Utilization and Conservation 25

 “Extra Low Voltage” Refer to voltages < 50V

BEKP 4853 Energy Utilization and Conservation 26

BEKP 4853 Energy Utilization and Conservation 27

Rate Structures - Domestic

BEKP 4853 Energy Utilization and Conservation 28

Rate Structures - Domestic

BEKP 4853 Energy Utilization and Conservation 29

BEKP 4853 Energy Utilization and Conservation

BEKP 4853 Energy Utilization and Conservation

BEKP 4853 Energy Utilization and Conservation 32

BEKP 4853 Energy Utilization and Conservation 33

BEKP 4853 Energy Utilization and Conservation 34

BEKP 4853 Energy Utilization and Conservation 39

BEKP 4853 Energy Utilization and Conservation 40

BEKP 4853 Energy Utilization and Conservation 41

BEKP 4853 Energy Utilization and Conservation 42

BEKP 4853 Energy Utilization and Conservation 43

BEKP 4853 Energy Utilization and Conservation 44

BEKP 4853 Energy Utilization and Conservation 45

BEKP 4853 Energy Utilization and Conservation 46

BEKP 4853 Energy Utilization and Conservation 47

BEKP 4853 Energy Utilization and Conservation 48

 Power Factor (PF) Charge

 Late Payment Penalty

 33% Surcharge for Temporary Supply

BEKP 4853 Energy Utilization and Conservation 49

 1.6% as Feed-in-Tariff (FiT) or KWTBB for Renewable Energy.

 Connected Load Charge (CLC)

BEKP 4853 Energy Utilization and Conservation 50