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Utility Rate Structures for Data Centers

Utility Rate Structures for Data Centers. Mark Bramfitt, P.E. Bramfitt Consulting. Topics. A crash course on what utilities charge for  Do rate structures really matter given data center load shapes? Rate options: service level, reliability, demand response, and real time pricing.

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Utility Rate Structures for Data Centers

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  1. Utility Rate Structures for Data Centers Mark Bramfitt, P.E. Bramfitt Consulting

  2. Topics • A crash course on what utilities charge for  • Do rate structures really matter given data center load shapes? • Rate options: service level, reliability, demand response, and real time pricing

  3. The Fundamental Relationship Customer Utility

  4. The Real Relationship Accounting Utility

  5. The CIO/Data Center Manager Doesn’t see the utility charges! And by “see”, isn’t responsible within the IT budget

  6. Why Should We Care? • Alignment between utility costs and IT operations can have important financial benefits for the customer and the utility • There are supplemental issues related to capacity and reliability that are important too

  7. Data Centers markbramfitt.com Utility and DC/IT Drivers Utilities Regulatory Compliance Reliability Risk Management Load Growth Competitive Rates Load Management Renewable Resources Energy Efficiency Services Smart Grid Reliability Capacity Low Rates (Opex) Capex Avoidance Carbon Content

  8. But Back To Basics • Utilities have a “cost of service” rate model • Rates are to reflect, as best as possible, the cost of service • A portion of rates are intended to cover fixed costs (capital invested in infrastructure) • The balance covers variable costs (service, cost of generation)

  9. For the Largest Customers Charges to Reflect Infrastructure Costs Charges Reflecting Variable Costs Energy charges block time of use seasonal or real-time basis Peak demand charge • Meter charge • Special facilities/standby • Maximum demand charge • Service voltage (primary/secondary/transmission) • Power factor

  10. And Other… • Public goods charge • Energy efficiency • Low income rate assistance • Demand response rates • “Green” power options • Direct access/unbundled service

  11. Utility Rate Drivers • Align customer use patterns with actual costs • Encourage demand response and energy efficiency • Encourage appropriate load growth (competitive rates)

  12. Do DC Managers Care?

  13. Load Profile Precludes Rate Effects • For very inefficient and very efficient data centers, load profile is essentially at unity load factor • Remember, most operators don’t see direct charges • DCs in commercial office and institutional facilities don’t change this paradigm much

  14. What Does Matter? • Low rates! • Available capacity • Time to serve • Carbon content • Demand-side programs

  15. Components of Low Rates • Economic development “teaser” rate • Direct access (deregulated wholesale) • Discounts for service level • Demand response incentives

  16. Capacity and Time To Serve • For utility scale data centers, absolutely crucial • Microsoft wants to install 1 MW local-serving modular DCs from green field to operation in three months • Great examples are Dominion Power and Silicon Valley Power

  17. Carbon Content • Becoming an issue for some players • If you have low rates and a relatively clean portfolio, great • If not, direct access can mitigate

  18. Demand-side Programs • New construction energy efficiency programs • Incentives for solar, fuel cell, or other on-site generation • Public Goods Charge retention plans

  19. Key Take-Aways • DC Managers nominally indifferent to rate structures • For business attraction, low rates, service availability, and time to serve are crucial • All other attributes are of nominal benefit

  20. Questions? MARK BRAMFITT, P.E. 3055 GOUGH STREET, #100 SAN FRANCISCO, CA 94123 PHONE 415.407.6291 MARK@MARKBRAMFITT.COM information technology  utilities  data centers  energy efficiency  demand response  smart grid  program design  training  strategic engagement impact

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