$0.47 per kilowatt hour. Alternatives?

I set up shop in Wilmington, CA (near Long Beach port) a few months ago to build machines. Before starting this business I thoroughly researched all of the operational expenses; rent, electric, water, machine payments, ect. I expected to pay 15-20 cents per kWh.

I had to put down a $1,100 electric deposit with LADWP based on the usage of the previous tenant. I thought this was high, but I didn't know what exactly they were doing so I figured it was a one time expense with no alternative.

My electric bills for the last two months have averaged out to about $0.47 per kilowatt hour. The average house in this region uses around 900 kWh per month and my shop is using less than half of that. The average residential rate is around $0.18 per kWh in southern California.

So I'm paying 4-5 times the national average for electricity, and I realized this is literally the highest in the world (except for a few small island nations). I know many forum members here have shops in the LA/soCal area; are you guys also paying this ridiculous rate?

I'd like to know if anyone on this forum has gotten solar panels or any alternative to grid power for their shop. I'm seriously considering buying some solar + big battery system but I need 3 phase 220v. I know the return on investment is a debatable subject, but I think that's for people paying a normal electric rate. Anyone have any ideas or experience with this?

Between this and the tariffs, it seems like much of my business planning was a waste of time.

Businesses usually get charged higher rates for electricity than residential customers, frequently with a minimum. You might see if your provider offers any off-hours discounts (if you don't mind working at night), or other abatements.

If your area offers competitive electrical supply (as in the North East), perhaps another vendor has better rates. Of course, that doesn't always work as planned...

Competitive Electric Supply | Mass.gov

I assume you have 3 phase supply.

Is ther any chance that you have some cases of a very large draw for a relatively short time? The Powerco may be billing you higher rates due to a short term draw that exceeded their limit and triggered that billing.

Then also, does any of your stuff have a particularly bad power factor? You can get dinged at a higher rate for crummy power factor.

Look at your bill and see if it shows any "special conditions" penalty billing.

I have solar for my home and shop, have since 2001, it is long ago paid off and I have no electricity bills. My system is what they call grid tied, meaning I am still connected to the grid, I sell my excess power to the utility during the day and use theirs at night and whenever I need it.
Solar costs are much lower these days and you don't really use that much power. You should be able to get a system installed with good components for between $2.50 to $3.00 a watt, if you are only using 450kwh per month, something like a 4kw system should be more than you would need.
Grid tie is the way to go for several reasons,and since you are still connected to the grid you have all the capacity you need.
You must shop around as there are endless outfits that will not only seriously overcharge you, sell you components you don't need, give you a crappy warranty, and get you into a loan that will in the long run, make it barely worth while.
There is still a federal tax credit of 30% that you can spread out over several years as well.

Generic Default said:

I set up shop in Wilmington, CA (near Long Beach port) a few months ago to build machines. Before starting this business I thoroughly researched all of the operational expenses; rent, electric, water, machine payments, ect. I expected to pay 15-20 cents per kWh.

I had to put down a $1,100 electric deposit with LADWP based on the usage of the previous tenant. I thought this was high, but I didn't know what exactly they were doing so I figured it was a one time expense with no alternative.

My electric bills for the last two months have averaged out to about $0.47 per kilowatt hour. The average house in this region uses around 900 kWh per month and my shop is using less than half of that. The average residential rate is around $0.18 per kWh in southern California.

So I'm paying 4-5 times the national average for electricity, and I realized this is literally the highest in the world (except for a few small island nations). I know many forum members here have shops in the LA/soCal area; are you guys also paying this ridiculous rate?

I'd like to know if anyone on this forum has gotten solar panels or any alternative to grid power for their shop. I'm seriously considering buying some solar + big battery system but I need 3 phase 220v. I know the return on investment is a debatable subject, but I think that's for people paying a normal electric rate. Anyone have any ideas or experience with this?

Between this and the tariffs, it seems like much of my business planning was a waste of time.

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400kWh at 0.47usd/kWh makes 180 usd per month. I wouldn't lose my sleep over that. What is this? part-time retirement hobby shop with one lightbulb?
I use more electricity in our home sauna...

3200 kWh per month last year january at home&garage shop

How much of that 180 usd are the fixed fees?

I think you're reading your bill wrong. .47 / kwh is insane. My power here (SCE) is a rip off at .067.

JST said:

I assume you have 3 phase supply.

Is ther any chance that you have some cases of a very large draw for a relatively short time? The Powerco may be billing you higher rates due to a short term draw that exceeded their limit and triggered that billing.

Then also, does any of your stuff have a particularly bad power factor? You can get dinged at a higher rate for crummy power factor.

Look at your bill and see if it shows any "special conditions" penalty billing.

Click to expand...

+1. I don't have much experience with this but I understand it's common to get put into different rate category based on your max peak draw. Pulling 600A for 1 hr and pulling 10A for 60 hr are the same kWhr but the prior is going to bump you into a higher rate. The nature of a machine shop means you can try to lower that peak. Air compressors come to mind as something to watch and/or change.

Most California electric utilities have a tiered system (higher rates for higher usage)and businesses get hit with peak demand charges, that will multiply the whole bill off one spike. When I was in that state, on summer rates with SCE I was paying about $.40 per kwh. There usually are 5 tiers, it is pretty easy to hit tier 5 for even light industrial users and I imagine someone in a studio apartment with one light bulb and a hot plate would be at least tier 2.

Dualkit said:

Most California electric utilities have a tiered system (higher rates for higher usage)and businesses get hit with peak demand charges, that will multiply the whole bill off one spike. When I was in that state, on summer rates with SCE I was paying about $.40 per kwh. There usually are 5 tiers, it is pretty easy to hit tier 5 for even light industrial users and I imagine someone in a studio apartment with one light bulb and a hot plate would be at least tier 2.

Click to expand...

Yabutt...."It's GREEN electricity"....

Dualkit said:

Most California electric utilities have a tiered system (higher rates for higher usage)and businesses get hit with peak demand charges, that will multiply the whole bill off one spike. When I was in that state, on summer rates with SCE I was paying about $.40 per kwh. There usually are 5 tiers, it is pretty easy to hit tier 5 for even light industrial users and I imagine someone in a studio apartment with one light bulb and a hot plate would be at least tier 2.

Click to expand...

digger doug said:

Yabutt...."It's GREEN electricity"....

Click to expand...

I think a lot of SCE high rates in certain areas are due to social programs and all the rebates they give for buying energy efficient air conditioners, etc,etc. They also mark up the green energy they buy from outsiders quite a bit. Also reading an SCE bill takes an accounting degree. I think they try to disguise their high rates anyway they can.

Larry Dickman said:

I think you're reading your bill wrong. .47 / kwh is insane. My power here (SCE) is a rip off at .067.

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Most people don't speak SCE, most utility companies bills are straight forward and don't have a up to 10 different charges on a bill. The bill I get here shows how many KWH, the cost each and the total. I seriously doubt average end cost per KWH from SCE for you is $.067 unless you are getting rebates or reduced rates for a low income user.

I live in Nevada, 50 years ago we had California Edison. They charged $ 1.00 per HP of connected load per month, plus usage. It was very expensive. We changed power companies and went down to hobby shop rate. We take our power at 480 v, 3 oh. We also ran on generators for a few years. Good luck. Jonn

At .47 a KWH, I'm assuming, that is your monthly bill divided by number of KWH. Here in Ohio, for a smaller bill (under 1000 KWH) with a commercial 3 phase service, my bill runs about .33 a KWH. Between the customer charge, demand charge, and various tariffs, it bumps up the actual power cost alot if you're not using alot of power. The cost of the power its self (just the generation service) runs about .07 KWH.

When I first bought my building, the previous owner was using alot of power. The power company continued to bill me the previous owner's demand charge which was really high. A phone call is all it took for them to reset the demand charge to what I was actually using. Funny how they didn't do that when they opened my account.

When you start looking at generating power, its an eye opening experience for what is involved. If you have a modern shop with CNCs, one starts to realize the complexity of securing a high quality, constant, reliable power source that is the life blood of CNCs. As difficult as it may be when you want something to work in a challenging business, you have to put aside the emotional side of things to see even at .47 a KWH, while its a concern, its really not the end of the world if you have a viable business of machining parts when you take your other overhead in account.

Not saying that to put you down, I struggle with having profitable work to pay my overhead, and make a profit, and I'm trying to get better from separating emotion (I love machining) from business (We all need to make money to survive.)

Also, not saying a grid tie solar/wind system is out of the question, some companies have made them work. But its not a magic bullet.

Hope you can get things figured out that things can be a success with your shop!

Dualkit said:

Most people don't speak SCE, most utility companies bills are straight forward and don't have a up to 10 different charges on a bill. The bill I get here shows how many KWH, the cost each and the total. I seriously doubt average end cost per KWH from SCE for you is $.067 unless you are getting rebates or reduced rates for a low income user.

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I guess I mis read the OP. I now assume he's dividing the total bill by the number of KWH used. If I do that, it comes out to $.17 / KWH. He must be getting hit with a big demand charge or something.

Generic Default,

I stumbled upon this looking for what Duke Energy charges for 3 phase business power here.

How To Switch Energy Providers for Your Business

Paul

OP:
How much is Your actual usage ?

If You are paying say 200$, per month, then it is non-material for any business.

The actual real cost/kWh is then obscured by line charges, meter charges, transport charges or any nr of tricks to get a high base minimum charge.

But most-all businesses globally who have any real power, ie more than housing, have a high baseload cost/charge in one way or another.
Say anything above 12-15 kW delivered.

This is typical, although wrong, unfair, and very anti-business. And very short sighted.
Most power companies, globally, are myopic and incompetent and have severe gridlock and NIH or Not-Invented-Here syndrome.
Like most utilities, from telcos to water, to sewage to garbage.

Power actually costs little, and the transport not much.
Typical sourcing costs, via PPE, public data, show power companies pay about 3-4 cents for PV and wind, declining, and about 8 cents for natgas.

10-20 cents for nukes.
Which is criminal overcharging and has nothing to do with the real engineering cost of nukes.
Nukes are cheap, but the paperwork and permits cost 3-4x the real cost.

Transmission costs a bit, maybe 2-4 cents. Varies.

So "real" costs are about 6-8 cents, and a utility like power should run at a slight profit and bank it.
Typical average costs US and global are about 11-12 cents, so most power is sold at fair prices.
About 1-2 cents evaporates into cooked deals, between the 8 cents and the 12 cents.


It would be relatively easy to lower cost of transmission/grid by 50-70%.
Standardising substations, std. permits, std. connectors etc would lower the cost dramatically.
Common purchases for many power companies at once.

It is silly that we pay in effect bribes so that study comissions/permits have cushy committee jobs of zero relevance.
It is silly we do not standardise large electrical equipment.

Generic Default said:

I set up shop in Wilmington, CA (near Long Beach port) a few months ago to build machines. Before starting this business I thoroughly researched all of the operational expenses; rent, electric, water, machine payments, ect. I expected to pay 15-20 cents per kWh.

I had to put down a $1,100 electric deposit with LADWP based on the usage of the previous tenant. I thought this was high, but I didn't know what exactly they were doing so I figured it was a one time expense with no alternative.

My electric bills for the last two months have averaged out to about $0.47 per kilowatt hour. The average house in this region uses around 900 kWh per month and my shop is using less than half of that. The average residential rate is around $0.18 per kWh in southern California.

So I'm paying 4-5 times the national average for electricity, and I realized this is literally the highest in the world (except for a few small island nations). I know many forum members here have shops in the LA/soCal area; are you guys also paying this ridiculous rate?

I'd like to know if anyone on this forum has gotten solar panels or any alternative to grid power for their shop. I'm seriously considering buying some solar + big battery system but I need 3 phase 220v. I know the return on investment is a debatable subject, but I think that's for people paying a normal electric rate. Anyone have any ideas or experience with this?

Between this and the tariffs, it seems like much of my business planning was a waste of time.

Click to expand...

What kind of equipment you make
i am nearby , pay about same just do not use
lot of juice peak hours, and would be fine
some shop owners tell me they do not have a problem
as long they stagger the cycle start on multiple machines
they say at the start the suck most of the juice, some may
chime on if is true

I did some inquiring into getting 3ph into new shop, the upside is they only charge .08 per kwh, but they want a 5k deposit

If you are even contemplating solar, go slow and do your homework as was suggested earlier. I worked in the industry but never bought in. In our area, the electrical power is time-related with evening rates much, much lower. So I would consider starting with the battery storage first, you will need some anyway. This would include inverters and the power handling equipment. Then ‘trickle charge’ at night from the grid, run batteries during the day, no solar. This is a great option if you have short power outages as well. Get that running first. Single phase first if possible? Also check out the potential of newer ideas like Tesla’s Powerwall battery storage system.
Electrical power generating solar systems still have a way to go, even though some advertise a twenty-five-year warranty, the current designs and materials have not been around that long to prove it. Solar panels are modular so that you can add to the system, no need to spend max $ up front.

Read the fine print.
I pay just over .06....But.
I mothballed my shop for a while.
With almost nothing running but the single parking lot light, two computers, surveillance video, occasional inside lights, and fan in the furnace my monthly electric bill still was $400.
Going solar will not solve the add on charges unless you plan to go 100% off the grid.
Bob