Chapter 17.6, Problem 40E

Electric power consumption is measured in kilowatt-hours (kWh). The local utility company offers an interrupt program whereby commercial customers that participate receive favorable rates but must agree to cut back consumption if the utility requests them to do so. Timko Products cut back consumption at 12:00 noon Thursday. To assess the savings, the utility must estimate Timko’s usage without the interrupt. The period of interrupted service was from noon to 8:00 P.M. Data on electric power consumption for the previous 72 hours are available.

1. a. Is there a seasonal effect over the 24-hour period?
2. b. Compute seasonal indexes for the six 4-hour periods.
3. c. Use trend adjusted for seasonal indexes to estimate Timko’s normal usage over the period of interrupted service.