Neil from San Diego. I track ratchet reset calendars for all my ongoing clients. The ratchet typically applies the prior 12 months' highest demand. So the month that set the ratchet eventually ages out and stops controlling the minimum billing demand. Has anyone helped clients plan operations specifically around ratchet reset timing?
When the ratchet resets — planning around the demand calendar
Paul from Minneapolis. Yes and it is one of the more practical demand management strategies I offer. Once you identify the month that set the ratchet you know exactly when it ages out. If the client can hold their demand below the ratchet level until that month rolls off the minimum billing demand drops significantly.
Neil again. My client set their ratchet in July two years ago with an HVAC malfunction. That July is aging out in five months. If they can manage their HVAC demand carefully for the next five summers the ratchet level drops to something much more manageable.
Paul again. The risk is a new spike before the old one ages out. If they hit another peak demand above the current ratchet level in the next five months they restart the clock. Worth discussing demand management strategies for those specific months.
Dave from Charlotte. I build a ratchet calendar in a simple spreadsheet for clients with significant ratchet exposure. Column A is the month, column B is the peak demand that month, column C is whether that month's demand is currently controlling the ratchet. Color-coded so the client can see at a glance which months they need to protect.
Dave that spreadsheet sounds like exactly what I should be giving clients. The visual makes it very clear what months they need to manage carefully.