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High Efficiency Lamps

Their Effect on the Cost of Light

to the Central Station

by
S. E. DOANE

Presented before the
National Electric Light Association

May 1910

(Reprinted from Proceedings National Electric Light Association,

Vol. I, May 1910, pp. 152–170)

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Effect of High-Efficiency Lamps on Average Customer. ..

89

Effect of High-Efficiency Lamps on Small Customer.

91

Effect of High-Efficiency Lamps on Large Customer.

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High-Efficiency Lamps

Their Effect on the Cost of Light to the Central Station

By S. E. DOANE

1910

Introduction

In beginning this paper permit me to acknowledge my indebtedness to several central-stations that have freely opened their books to us and to those who have given us their time for consultation and advice, and to Messrs. Merrill, Cooper and Eisenmenger of my staff for working up the material.

It is the purpose of this paper to discuss briefly the effect of the high-efficiency lamp upon the cost of light to the central station as developed by our experience, observation and analysis.

It became obvious to the lamp manufacturer when the new highefficiency lamps came upon the market that there were many problems connected with their use concerning which we should have information. These lamps were so much more efficient than any with which we had had experience that there was no basis from which it was possible to determine just what course to follow in placing the new lamps before the lighting industry and the public.

Under such circumstances our only recourse was to determine the best policy to follow from a careful analysis and study of the conditions under which the lamps were to be employed.

The author of this paper consulted central-station men of much experience from all parts of the country who operate all types of stations. A number of the men of the author's staff have been employed for a period of over two years collecting and working up statistics and data from all available sources.

It is most surprising to find that although a great many papers have been written in the last twenty years on this subject and derived questions, practically the only statistical information which is available for independent discussion is to be found in the reports of the United States census and in the reports of the various state commissions.

These figures are not given in such detail that they can be understood without further detailed knowledge of the business itself, consequently it is through the assistance of the central stations, who have freely opened their books to us and to others expert in the industry, that we are able to make such detailed analysis as we take pleasure in presenting to you today.

Historical Development of Cost Analysis

Among all the papers, articles, discussions, etc., the contributions of two men who have been recognized as pioneers in the discussion of certain fundamental features of the subject stand out by themselves. Practically all of the contributions other than those of these two men have dealt with details of the broad plan of cost analysis proposed by one or the other, or both.

Few of the papers published within the last twenty years have been based upon a fundamental cost analysis, but rather upon the effect on the customer, etc.* It is not possible to give due credit to the numerous authors whose thoughts and opinions we have studied with both pleasure and profit, and I trust you will understand that it is not my purpose or desire in presenting these figures to underrate for a moment the stupendous amount of work which has already been done on this subject.

Dr. John Hopkinson, F. R. S., in the presentation of his presidential address on the “Cost of Electric Supply," delivered before the Junior Engineering Society in London in 1892, succeeded in establishing a broad principle which if it had been recognized to any extent previously, had never before been presented to the public in such an authoritative or conclusive manner that it was recognized and accepted by the industry as a whole. Dr. Hopkinson

*It is rather interesting to trace the relative amount of attention given to the rate question during a number of years by noting the number of references listed on the subject in the Engineer. ing Inder.

From 1892 to 1897 six references were made to articles on rates appearing in American publications. About this time the Wright maximum demand system of charging awakened considerable interest, as we find that in 1898 six references were made to articles on rates, five in the succeeding year, three in 1900 and four in 1901. Then for a period of four years but two references were made each year until 1906, when interest in the question seems to have subsided still more, as but one reference was made. The advent of the high efficiency lamp and the fact that it was becoming a commercial factor may have been the cause for a revival of interest in regard to methods of charging, for in 1907 five references to the subject were made, five in 1908, and four in 1909. The reference to tariffs and rates in foreign magazines shows a similar awakening of interest abroad within the last four or five years, the number of references on the subject from 1892 to and including 1906 being but eleven, while the next three years showed a total of sixteen. Altogether seventy-four references are made, showing that considerable attention has been given to the subject of proper rates, tariffs or charges for the central-station service.

divided cost into fixed and operating classifications, which division is universally recognized and conceded today to be correct.

Mr. Doherty, in 1900, in a paper before this Association, presented the same idea, having worked it up independently, but Mr. Doherty proceeded to further divide the fixed costs, showing that it was not proper to apportion them entirely by the customer's maximum demand.

Inasmuch as Mr. Doherty absolutely and completely recognizes Dr. Hopkinson's division of costs into fixed costs and operating costs, but goes further, in that he separates the fixed cost into two subdivisions, it is obvious that if we attempt our cost analysis on the basis suggested by Mr. Doherty, it is entirely possible for us to view it from the standpoint suggested by Dr. Hopkinson by combining the two divisions of the fixed cost, whereas the contrary is not true; consequently throughout this paper we have proceeded along the lines indicated by Mr. Doherty with the expectation that the paper will be of equal value from either the Hopkinson or the Doherty standpoint.

Premises Adopted for This Analysis

In discussing the effect of the high-efficiency lamp on centralstation costs, let us first agree upon the premises on which we base our analysis and argument.

First. Let us agree that our discussion is limited to the lighting load.

Second. Let us agree that in order to obtain a fair average and to include the yearly mid-winter peak our analaysis must cover a period of at least one year.

Third. Let us agree that the average equipment in the country as a whole must be considered to be not excessive for the maximum demand from the standpoint of a cost analysis.

Fourth. Let us agree that all items of out-go, including dividends, interest, depreciation, obsolescence, and all losses, are as much items of cost as the usual items of coal, labor, etc.

Cost Analysis of a Number of Central Stations

As a basis for the discussion which is to follow, I wish to present the results of a careful cost analysis of a number of central stations, which is summarized in Table I. In this table four separate cases,

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