Client in Sioux Falls on Xcel Energy getting power factor penalties on Schedule C-23. Problem is they installed capacitor correction 6 months ago and PF is now above 95%. Xcel says penalties are based on 12-month rolling average. That seems excessive.
Xcel Energy power factor penalty dispute
I've seen that before with Xcel. Their PF penalty uses a 12-month rolling average of reactive demand. So even with correction equipment, penalties can continue for up to a year. Check the tariff language carefully.
That doesn't sound right. Most utilities use current month or at most 3-month average. I'd challenge that interpretation. Pull the actual tariff and see what it says about averaging period.
Tariff says "monthly reactive demand" but Xcel is interpreting that as a rolling average. Their justification is that it prevents gaming the system. Filed formal complaint with MPUC.
Similar issue in Pennsylvania with PPL. Commission ruled that "monthly" means current month only, not rolling average. Use that precedent if it helps.
Thanks Nick. MPUC ruled in our favor. Xcel has to use current month reactive demand, not rolling average. Client getting $8,200 refund and corrected billing going forward.
Excellent outcome Diane. Utilities sometimes take liberties with tariff interpretation, especially on technical provisions like power factor. Commission precedents are valuable tools for similar disputes.