Gene from Aurora IL. Client runs a manufacturing plant with a backup generator. Found they were on a standard commercial rate when they qualified for a standby rate designed for customers with on-site generation capacity. The standby rate has lower demand charges in exchange for the utility being able to curtail service during grid stress events. Client had never been told this option existed. Annual savings of $14,000. Has anyone else found standby or partial requirements rate opportunities?
Standby rate vs. standard rate — client didn't know they had a choice
Carl from Duluth. Yes and this is a real niche. Any customer with significant backup generation is potentially a candidate. The utilities rarely proactively tell customers about these rates because they reduce revenue.
Lou from El Paso. The tricky part is the curtailment risk. Some clients are very uncomfortable with any arrangement that gives the utility the ability to interrupt their service even briefly. I always explain the curtailment terms clearly before recommending the standby rate.
Gene here. My client asked about that specifically. In my territory the curtailment events have averaged fewer than three hours per year over the past decade. When I showed them that data the concern mostly evaporated.
Carl again. Also worth noting that some standby rate structures include a capacity reservation charge that partially offsets the demand savings. Do the full math before recommending, not just the demand component.
Lou again. And confirm that the backup generator is properly registered with the utility. Eligibility for the standby rate sometimes requires formal notification of the generation capacity.
That registration piece is something I nearly missed. The client had the generator but had never filed any paperwork with the utility about it. Got that sorted before we filed the rate class request.