Rate class for co-working space — not quite office, not quite commercial

Charles from Fargo. New client runs a co-working space with about 80 desks, several private offices, a shared kitchen, and a podcast recording studio. The utility has them on a general office rate. The HVAC and lighting load is standard office but the podcast studio has specialized power conditioning equipment and the shared kitchen has commercial-grade appliances. Is a co-working space a single rate class or is there a mixed-use argument?

Steve from Raleigh. Co-working spaces are genuinely ambiguous from a rate class perspective. Most utilities have not created a specific schedule for them and default to office or light commercial. The question is whether the non-office elements are material enough to argue for a different classification.

The kitchen and studio together represent about 20 percent of the square footage and I estimate maybe 35 percent of the load because of the specialized equipment.

Steve again. At 35 percent of load the non-office use is material. I would look at whether a general commercial rate — as opposed to a specific office rate — has lower demand charges for the mixed load profile. Sometimes the less-specific classification is actually more favorable.

Ted from Spokane. Also ask the client if they have any plans to add a cafe or food service. That would push the classification further toward commercial and might open up a food service rate eligibility that would not apply today.

Ted they have been talking about adding a small coffee bar. If that goes forward the rate class question gets more interesting.

Steve one more time. For now I would document the current mixed use and present the office rate as a potential error with the caveat that the analysis may change if operations expand. Sets up a follow-on engagement naturally.