Description

Many large-scale natural gas consumers are required to select the Maximum Daily Quantity (MDQ) of natural gas theywill be able to consume at a “firm” rate as a part of their naturalgas contract; they are then charged a “capacity” fee that is proportional to the MDQ selection. This charge is analogous to the capacity demand charge that electrical customers may experience, but differs in that the customer selects the value ahead of time instead of being billed on past usage. Selection of the appropriate value of the MDQ represents an interesting mathematical and economic problem that can have significant financial implications for the customer. The work performed inthis study resulted in a savings of ~$600,000 annually (for a6 to 8 million dollar annual bill) for the customer and a betterquantification of risks related to selection of the MDQ. Thisarticle provides a detailed description of the problem and amathematical approach to quantifying the cost and risk tradeofffor a single large-scale natural gas user in the Midwest.

Citation: 2020 Winter Conference, Orlando, FL Technical Papers

Product Details

Published:

2020

Number of Pages:

8

Units of Measure:

Dual

File Size:

1 file , 1.1 MB

Product Code(s):

D-OR-20-003