UTILITY TRANSFORMERS

NEW TRANSFORMER PURCHASES BY UTILITIES:

ONE MILLION NEW TRANSFORMERS PER YEAR (about 3 % of

stock)

AVERAGE SIZE IS 40 to 50 KVA

TOTAL EXPENDITURES ARE ON THE ORDER OF $700 MILLION

ANNUALLY

UTILITY TRANSFORMER STOCK TURNS OVER ABOUT EVERY

32 YEARS (AVERAGE TRANSFORMER LIFE)

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MOST UTILITY TRANSFORMER PURCHASES CONSIDER ENERGY

LOSSES IN A CAPITALIZED COST CALCULATION.

TOTAL OWNING COST (TOC) APPROACH

TOC is used to compare the capitalized value of alternative transformer

costs. It includes the transformer 's First Cost (price), and Cost of Losses

(COL).

TOC = FIRST COST +

A * Rate of No Load Losses +

B * Rate of Load Losses

where A = Cost per watt of No-Load Losses;

B = Cost per watt of Load Losses.

Bids by transformer manufacturers can customize losses to minimize TOC

based on the owning cost formula provided by the utility

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THEREFORE TRANSFORMER LOSSES AND PRICES MAY VARY

BECAUSE OF A WIDE RANGE OF UTILITY OWNING COST FORMULAS

(A & B FACTORS) THAT STEM FROM DIFFERING ENERGY COSTS

AND TRANSFORMER LOADING FACTORS

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MAXIMUM TRANSFORMER LOSS STANDARDS CAN EFFECTIVELY

SET A FLOOR FOR EVALUATING ENERGY COSTS ASSOCIATED WITH

TRANSFORMER USE

Depending on where a standard is set, it would rule out high loss

transformers. However, some utilities could be forced to purchase

transformers that while more energy efficient are less cost effective than what

is now purchased.

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For instance, if a standard was set based on $3 per watt of No-Load Loss

and $1 per watt of Load Loss, a Utility with cost of losses of $2 per watt of

No-Load loss and $0.75 per watt of Load loss would have to purchase a

transformer with a higher life cycle cost than would be available without a

standard. The result would be a reduction in energy use but an increase in

the life cycle costs of the transformer as seen from the Utility's perspective.

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THE CANADIAN APPROACH TO REGULATION WAS TO

ASSUME AN EVALUATION FORMULA AND SELECT MAXIMUM

LOAD AND NO-LOAD LOSS STANDARDS BASED ON THE AVERAGE

ENERGY LOSSES ASSOCIATED WITH THE LOWEST TOCs

AS SUBMITTED BY MANUFACTURERS FOR THAT FORMULA

FOR EXAMPLE: At a value of $3 per watt of No-Load Loss and $1 per watt

of Load Loss, the average NEMA low TOC transformer would have 51 watts

of No-Load loss, and 261 watts of Load Loss at rated load. These losses could

be used as standards with the proviso that a transformer could exceed the load

loss standard by 3 watts for every 1 watt that No Load losses are under the

standard. Also the no-load loss standard could be exceeded by 1 watt for every

3 watts that load losses are under the standard.

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PRELIMINARY ESTIMATE BASED ON A TRANSFORMER LOSS

STANDARD FOR 25 KVA TRANSFORMERS AND EXPANDED TO

ESTIMATE OF TOTAL ANNUAL UTILITY PURCHASES

STANDARD FOR 25 KVA TRANSFORMERS--COST OF LOSSES = $479

52% OF UTILITY REPORTED PURCHASES FOR 1993 DID NOT MEET

STANDARD

FIRST YEAR Annual kWh per

(Annual kWh) Transformer

115,108,028 58 Based on average of LL and NLL

67,292,140 34 Based on LL adjustment

162,923,917 81 Based on NLL adjustment

25 YEAR

Cumulative

Annually

2,877,700,712 115,108,028 kWhs (Based on ave . NLL & LL)

0.01 0.00039 Quads of Savings

25 YEARS FOR CUMULATIVE SAVINGS = 0.01 QUADS

(Assumes no growth in Transformer Purchases)

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