Client is an auto parts manufacturer in Detroit on DTE Energy running 3 shifts. Their demand is fairly flat — around 1,200 kW all day, every day. But last July the chiller plant malfunctioned and demand spiked to 1,800 kW for one day before they fixed it. The ratchet clause locked in 80% of that spike — 1,440 kW — as the billing demand for the next 11 months. Even though actual demand is back to 1,200 kW, they're paying for 1,440 kW every month. Is there any way to get relief from a one-time spike?
Three-shift operation — demand ratchet is killing us
Some utilities will adjust the ratchet demand if you can prove the spike was caused by an equipment malfunction that has been repaired. It's not guaranteed but it's worth asking. File a written request with DTE explaining that the July spike was a one-time event caused by a chiller malfunction, the equipment has been repaired, and demand has returned to normal levels. Attach the repair documentation and 6+ months of post-repair interval data showing normal demand. The worst they can say is no.
Ray's advice is sound. Also check DTE's tariff for any provision allowing demand adjustment for temporary or abnormal conditions. Some tariffs have explicit language allowing the utility to substitute a "normal" demand reading when the billing demand was caused by equipment failure. If the tariff has this provision, your request is even stronger because you're citing their own rules. Additionally, look at whether the demand spike would have been avoidable if the client had a demand controller or load management system. That's an operational recommendation for the future — not an audit finding per se, but valuable advice.
Found it in the tariff — there's a provision for demand adjustment when the spike was caused by "emergency conditions beyond the customer's reasonable control." Chiller malfunction qualifies. Filing the request with the repair invoice and 8 months of post-repair interval data. If DTE adjusts the ratchet, the savings are about $3,600/month for the remaining months. Thanks everyone.