Utility Cost

What Compressed Air, Steam, and Refrigeration Actually Cost Per Unit

What actually drives the cost of a cubic foot of air, a pound of steam, and a ton-hour of cooling, and how to build a charge-back rate that survives an audit.

Utility cost is dominated by energy, not equipment. For compressed air, electricity is 70 to 75 percent of lifetime cost, maintenance 10 to 15 percent, and capital only 10 to 15 percent over a ten year life. That ratio flips the usual instinct to shop on purchase price. A 100 hp compressor running 6,000 hours a year at 0.85 load and $0.10/kWh burns 100 x 0.746 x 0.85 x 6,000 x 0.10, about $38,000 a year in power, dwarfing a $30,000 purchase spread over a decade. Cost per unit, not sticker price, is what a defensible number rests on.

Translate compressed air into a rate per 1,000 cubic feet so departments see real money. A well-run plant delivers air at $0.20 to $0.35 per 1,000 cf; a leaky, high-pressure system runs $0.40 to $0.60. The math: specific power near 18 to 22 kW per 100 cfm at 100 psig, so 100 cfm for one hour is 6,000 cf costing about 20 kW x $0.10 = $2.00, or $0.33 per 1,000 cf. Feed leakage rates from the Compressed Air Leak Loss calculator into this rate and a single 1/4 inch leak at 100 psig, roughly 100 cfm, costs $1,700 a year.

Steam cost per 1,000 lb hinges on fuel price, boiler efficiency, and make-up water treatment. The core driver is fuel: at $6 per million Btu for gas and 82 percent boiler efficiency, delivering 1,000 lb of steam at about 1,000 Btu/lb net needs 1.0 million Btu of output, or 1.22 million Btu input, costing $7.30 in fuel alone. Add water, chemicals, blowdown, and labor and delivered steam typically runs $8 to $15 per 1,000 lb. Blowdown at 5 percent throws away 5 percent of that energy plus treated water, so cycles of concentration directly move the rate.

Water treatment is a hidden line that estimators miss. Boiler make-up and cooling tower chemistry, softening, and blowdown add $0.50 to $2.00 per 1,000 gallons treated, and a tower evaporating 3 gpm per 100 tons of cooling consumes real volume. A 500 ton tower loses about 15 gpm to evaporation plus drift and blowdown, near 20 to 25 gpm total, so 8,000 run hours means 10 to 12 million gallons a year. The Utility Water Treatment Cost calculator prices chemical, softening, and sewer components so this stops being a rounding error in the quote.

Chilled water costs per ton-hour and the number moves with weather and load. At 0.6 kW/ton plus 0.15 kW/ton for pumps and tower fans, total plant efficiency near 0.75 kW/ton means one ton-hour costs 0.75 x $0.10 = $0.075, so a 200 ton load for 2,000 hours costs 200 x 2,000 x $0.075 = $30,000. Older 1.2 kW/ton plants double that. The Chiller Load and Refrigeration Tonnage calculators set the ton-hours; multiply by your blended kW/ton and rate to get a charge-back that reflects actual efficiency, not nameplate.

Peak demand charges quietly inflate every utility rate. Many industrial tariffs bill $10 to $25 per kW of monthly peak on top of energy, and a single 15 minute spike sets the whole month. If chillers, compressors, and boiler feed pumps all ramp together on a hot Monday, a 400 kW coincident peak at $18/kW adds $7,200 that month regardless of energy used. The Utility Peak Burden calculator isolates this demand component so a quote separates the $/kWh energy cost from the $/kW demand penalty that staggered start-up can avoid.

Build the quote bottom-up and keep the components visible. Start with metered or calculated consumption, multiply by a delivered unit rate that already folds in generation efficiency and losses, then add treatment, demand charges, and a maintenance allowance of 8 to 12 percent of energy. Pump and circulation power is its own line: the Utility Pump Energy Cost calculator turns gpm, head, and run hours into annual dollars so cooling water distribution is not buried in the chiller number. A defensible rate names every driver rather than hiding behind a single blended figure.

Estimates go wrong in predictable ways. Costing air off compressor nameplate rather than measured specific power overstates or understates by 20 to 40 percent. Ignoring part-load penalty, where a modulating screw compressor at 40 percent output still draws 70 percent power, wrecks air numbers. Forgetting steam distribution and trap losses of 10 to 20 percent understates delivered cost. And pricing at average rate while the tariff bills on peak demand can miss a third of the bill. Anchor every line to a measured or calculated quantity, not a percentage guess, and the quote holds up.

Published 2026-07-01.