Hi everyone, Pamela W. here from Savannah. I'm struggling to understand Georgia Power's Schedule GS-2 demand charge structure. The tariff shows $12.50 per kW for the first 30 kW, then $8.75 per kW above that. But there's also something called a "ratchet provision" that I can't figure out. My client's August bill shows 45 kW actual demand but they're being charged for 52 kW. Can anyone explain what's happening here?
Georgia Power Schedule GS-2 Demand Charge Confusion
Randy here. The ratchet provision is common in commercial tariffs. Georgia Power's GS-2 schedule uses 80% of the highest demand in the previous 11 months as a minimum billing demand. So if your client hit 65 kW back in February, they're paying for at least 52 kW (80% of 65) every month through January of next year. Check the "Previous 12 Months Demand History" section on page 2 of the bill. This prevents utilities from losing revenue when customers have seasonal load patterns.
George P. in Charleston dealing with similar issues. Randy's spot on about the ratchet. We see this a lot with manufacturing clients who have heavy summer cooling loads. One hot month in July can impact your bills for almost a year. I always tell clients to review their demand management strategies before peak season hits.
That makes perfect sense now! I found the demand history on page 2 - they hit 65.2 kW in March. So they're stuck with the 52.16 kW ratchet until April 2025. Thank you both for clearing that up. This is exactly why I love this forum.
Vernon C. from Tampa. Quick tip - some utilities will waive or reduce ratchet charges if the customer can prove the high demand was due to equipment malfunction. Worth asking about if you have documentation. TECO has done this for us twice.
Carol T. in Houston. Centerpoint has a similar 75% ratchet on their GL schedule. The key is educating clients about demand management BEFORE they get hit with these charges. Installing demand limiting controls can save thousands annually.