ETL 1110-1-181

12 Jan 98

c. First Cost Difference. The difference in first cost values of 2

different chillers is the first cost difference. In Table C3 for

example, the first cost difference of the 0.65 kW/ton chiller verses the

0.70 chiller is equal to ,000 (,400 - ,400).

d. Annual Energy Usage. The chiller capacity times the chiller

efficiency times the EFLH is the annual energy usage. In Table C3 for

example, the annual energy usage of a 200 ton chiller with an efficiency

of 0.70 kW/ton and an EFLH of 1,000 is equal to 140,000 kWh/year (200 x

0.70 x 1,000).

e. Demand Charges. Demand charges are additional charges or fees

that utility companies require most installations to pay in addition to

the energy usage charges. The structure of demand charges in comparison

around the country vary significantly most specifically in price and

length of occurrence. Demand charges can range in price from per kW

up to per kW and can be incurred over an entire year or just certain

months. Demand charges also often include additional rachet clauses

which are typically used to determine an installation's minimum demand

charges. In example 1, no demand charges were included into the

calculations. In example 2 on page C-10, a monthly demand charge of

per kW is used and are shown to occur 12 months out of the year. On

page C-11, the annual demand charge is calculated to be the monthly

demand charge times the number of months times the chiller capacity

times the chiller efficiency. In Table C9 for example, the annual

demand charge incurred by a 200 ton chiller with an efficiency of 0.70

kW/ton which incurs a monthly demand charge of per kW over a 12 month

period is equal to ,400 (8 x 12 x 200 x 0.70).

f. Annual Energy Costs. A chiller's annual energy usage times the

energy cost plus any applicable demand charges is the annual energy

costs. In Table C4 for example, a 200 ton chiller with an efficiency of

0.70 kW/ton operating under energy costs of 0.02 $/kWh has an annual

energy cost of ,800 (140,000 x 0.02).

g. Incremental Savings. The difference in the annual energy costs

between 2 different chillers is the incremental savings. In Table C4

for example, the incremental savings for the chiller with an efficiency

of 0.65 kW/ton verses the chiller with an efficiency of 0.70 kW/ton

(both operate with an energy cost of 0.02 $/kWh) is equal to 0

(,800 - ,600).

h. Discounted Savings. The incremental savings times the

appropriate discount factor is the discounted savings. Discounted

savings can be thought of as a number which represents what the

projected savings of selecting one chiller verses another will be over a

certain length of time. The discount factor (or uniform present worth

factor) used in the calculations was taken from NISTIR 85-3273-10.

NISTIR 85-3273-10 includes energy price indices and discount factors for

performing life-cycle cost analysis of energy conservation projects.

The discount factor was determined based upon the United States average

for commercial applications over a 20 year economic life. In Table C4

for example, the discounted savings for the chiller with an efficiency

of 0.65 kW/ton verses the chiller with an efficiency of 0.70 kW/ton

(both operate with an energy cost of 0.02 $/kWh) is equal to ,618

C-2

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