A universal optimization framework for commercial building loads using DERs from utility tariff perspective with tariff change impacts analysis

To accommodate the changes in the nature and the pattern of electricity consumption with the available resources, utilities have introduced variety of tariffs over the years. This paper develops a comprehensive optimization framework that addresses the challenges associated with the diversity of utility tariffs for commercial loads. Optimization of commercial building net load through Battery Energy Storage System (BESS) and renewable energy resources is modeled and explored for minimizing billing cost for different tariffs. Cost functions are formulated for each possible commercial utility tariff type, engendering the universal cost function format. An algorithm is developed to apply the optimization model and generate the desired optimal outputs (e.g., optimal net load and BESS power, costs and savings, etc.). The results for several building loads and all tariff types are compared and analyzed to present the findings. An impacts analysis is performed to observe how different changes in tariffs affect the optimizations results. Results exhibit that for same building load and renewable generation, the tariff type can have an overwhelming impact on costs and savings. Tariffs without Time of Use (TOU) charges or peak demand charge components offer lower savings opportunity from BESS optimization. Price change sensitivities showed the complicated dynamics among TOU price components on savings and historical trend analysis as an effective tool to predict future savings. Tradeoff between energy and demand charge heavy tariff options are also discussed for user benefit. The recent change in TOU time periods presents limited desired benefits while the modified tariff proposed in this paper exhibit significant improvement in terms of utility operation. •Tariffs of largest utilities in US and California’s are categorized into 6 universal types for addressing diversity.•Convex cost functions formulated for each tariff type to optimize commercial building loads with DERs.•Comparison of optimization results across 6 tariff types for user benefit.•Analyzing impacts of changes in price, time period, and tariff options on optimization results.•Proposed modified tariff reduces California’s “Duck Curve” ramp rate by 31%.