Rates and the final esoteric concept,
By Loren Howard
Over the past three years, I have written many articles on the topics of rates as a way to continue to help REC members understand their electric bills, what the various charges are, why they are there and why they are part of how REC develops rates. With all the changes in the supply of electricity, it has been necessary to redesign rates to ensure the most equitable recovery of costs. This month’s topic is not an explanation of the various components of charges on your bill, but a review of a concept that is really fundamental to electric infrastructure design and most utility systems design including water, telephone, etc. This concept is coincidence versus noncoincidence.
Imagine the homes in a neighborhood. Normally people go about their lives turning on appliances, lights, etc. in a rather random basis. One home turns on the electric dryer; another turns on the TV, while another turns on the electric stove. The rate at which electricity is being consumed is constantly changing, going faster then slower then faster again. Each home is setting an individual “demand,” the highest rate at which electricity is being used at each home. If you added all the individual demands up, that is noncoincident demand. However, if you measured demand, the highest demand for the neighborhood is less than the sum of the individual demand at each home. That is coincident demand.
In all the studies I have personally performed on the ratio of noncoincidence versus coincidence, the ratio is 3 to 1. Noncoincident electric demand is three times the coincident demand. If every electric consumer in a community turned all their electric devices on at once, it is likely that the circuit coming from the substation would trip. Every utility system, water, telephone, electric, sewer, is not designed to handle a coincident demand equal to the sum of all noncoincident demands. Using the analysis above, REC’s electric system would be at least three times more expensive than it is today.
When REC performs periodic studies of electric consumption and evaluates rates and rate design, coincidence and noncoincidence is an important analysis performed to fairly allocate costs. When REC’s engineering department evaluates how to appropriately size power lines, transformers, circuit breakers and other electric system components, coincidence and noncoincidence are important factors in building the electric system with enough capacity to handle any reasonable demand while not overbuilding and thus incurring unnecessary costs.