Tim here from Bismarck. Montana-Dakota got approval for just a 4.8% increase starting next month, which sounds good compared to what I'm reading about other states. But they're adding demand charges to some smaller commercial accounts that never had them before. Anyone else seeing this trend of adding demand charges to previously energy-only rates?
Montana-Dakota Utilities modest increase but new demand charges
Tim - I'm over in Billings with NorthWestern Energy and we saw the same thing last year. They added demand charges to accounts over 25kW that used to be energy-only. The justification is cost recovery accuracy, but it's really about revenue stabilization. Your smaller commercial customers are going to be surprised.
We're seeing this across the Northwest. Avista in Spokane added demand charges to Schedule 25 (General Service) last year. A restaurant client went from $0 demand charges to $180/month just from the new structure. No change in usage, just a different way to calculate the bill.
Nancy's right about the shock factor. The key is educating clients about demand management once these charges hit. Simple things like staggering equipment startup and avoiding simultaneous operation of big loads can save significant money under the new structure.