Cecilia K from Madison, WI. We Energies territory. My client is a banquet hall and event venue. They were put on the Cp-1 TOU rate when the account was set up 8 years ago. The problem is that their load profile is completely wrong for TOU. Most of their electricity use happens on evenings and weekends — events run from 5pm to midnight Friday through Sunday. The Cp-1 on-peak window is weekdays 9am to 9pm. So they are paying peak rates for the small amount of weekday office and cleaning use, and getting the off-peak benefit for their heavy weekend event load. Sounds like a good deal right? Wrong. The Cp-1 demand charge is $14.50/kW vs $9.80/kW on the standard Cg-2 rate. Their weekend demand peaks — lighting rigs, commercial kitchen, HVAC for 300 guests — hit 180 kW. That demand charge differential alone costs them an extra $850/month. They would be better off on the flat commercial rate even without the TOU energy savings.
Client should never have been on TOU in the first place
Cecilia, this is a textbook case of a rate schedule that looks beneficial on paper but is not optimal for the specific load profile. TOU rates are not always cheaper — they are designed for customers who can shift load away from peak periods. A banquet hall that operates primarily during off-peak hours but has high demand peaks actually gets penalized by the higher TOU demand charge. Good catch.
I see this a lot in Wisconsin. We Energies customer service reps sometimes recommend TOU rates without fully analyzing the customer load profile. They look at the energy savings and miss the demand charge impact. For any client with demand over 100 kW, the demand charge component usually dominates the bill and that is where TOU can backfire.
Linda, exactly. I ran a side-by-side comparison for the last 24 months — Cp-1 TOU vs Cg-2 standard. The client would have saved $10,200 per year on Cg-2. Over the 8 years they have been on Cp-1, the total overcharge is roughly $81,600. Obviously we cannot recover all 8 years but even the lookback period should produce a significant refund.
What is the Wisconsin lookback for rate schedule errors? In Colorado, Xcel gives 3 years on classification errors where the utility recommended the rate.
Carl, Wisconsin PSC rules allow a 6-year lookback for utility-caused rate classification errors. If I can show that We Energies recommended Cp-1 at account setup without proper analysis, that is a utility-caused error. Six years at $10,200/year is $61,200.
Cecilia, how are you going to prove We Energies recommended the rate? After 8 years the original account setup notes might be gone.
Ray, the account setup form should be in We Energies records. I submitted a records request through the LOA. If the form shows the utility selected the rate — which is standard practice for new commercial accounts — that establishes it was the utility recommendation, not the customer choice.
Update: We Energies produced the account setup form. The rate schedule field was filled in by the utility rep with Cp-1 and the customer signed the form. No evidence the customer requested TOU or that any load analysis was performed. We Energies agreed to reclassify to Cg-2 effective immediately and rebill 6 years at the Cg-2 rate. Total refund: $58,400. Client almost fell out of his chair.
$58,400 on a rate schedule mismatch — and it would have continued costing $10K/year indefinitely if you had not caught it. This is why every audit should include a rate optimization analysis, not just error checking. Sometimes the rate is technically applied correctly but it is still the wrong rate for the customer.