A facility that manufactures fireworks has a large increase inproduction every June, such that their peak electrical demand is101, while in every other month of the year their peak electricaldemand of 50. The local utility informs the client that they willbe changing the rate structure. The demand charges will decreasefrom $7.54/kW to $5.37/kW. But the utility will start imposing aratchet clause at 80% of peak demand. What will be the expectedchange in annual demand costs for the facility? (When entering youranswer, please note that a positive # indicates that the facilitycosts will increase, whereas a negative # indicates that thefacility costs will decrease.)
