Problem
A small machine shop, with 30 hp of connected load, purchases electricity at the following monthly rates (assume any demand charge is included in this schedule) per hp of connected load:
First 50 kWh at 12.6c per kWh
Next 50 kWh at 10.6c per kWh
Next 150 kWh at 6.0c per kWh
Over 250 kWh at 5.7c per kWh
The shop uses 2800 kWh per month.
(a) Calculate the monthly bill for this shop. What are the marginal and average costs per kilowatt-hour?
(b) Suppose Jennifer, the proprietor of the shop, has the chance to secure additional business that will require her to operate her existing equipment more hours per day. This will use an extra 1200 kWh per month. What is the lowest figure that she might reasonably consider to be the "cost" of this additional energy? What is this per kilowatt-hour?
(c) Jennifer contemplates installing certain new machines that will reduce the labor time required on certain operations. These will increase the connected load by 10 hp, but since they will operate only on certain special jobs, will add only 100 kWh per month. In a study to determine the economy of installing these new machines, what should be considered as the "cost" of this energy? What is this per kilowatt-hour?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.