Wanted to share a significant win with the group. Just settled a major ratchet clause dispute with Duke Energy for a manufacturing client. The issue involved incorrect application of contract demand vs. ratcheted demand over a 3-year period. Duke was billing whichever was higher each month, but the tariff clearly stated it should be contract demand OR 80% of ratcheted demand, whichever is higher - not 100% ratcheted demand. Total recovery: $127,340 plus interest. Sometimes it pays to read the fine print very carefully!
Major Ratchet Dispute Victory - $127K Recovery
Chester, it was actually both. The tariff had specific language about the 80% factor that Duke's billing system wasn't applying correctly. The client had a contract demand of 2,500 kW but their peak usage hit 3,100 kW one summer month. Instead of billing 80% of 3,100 kW (2,480 kW), they kept billing the full 3,100 kW ratchet. Since 2,500 kW contract demand was higher than 2,480 kW, they should have billed the contract amount.
About 8 months total Marcus. Duke initially denied the claim, then offered a partial settlement of $31K. I had to escalate to the state commission before they finally agreed to a full audit of their billing system logic. Persistence definitely paid off here.
Randy, do you know if Duke has corrected this systemwide? Could be affecting other large commercial accounts with similar rate structures.
Great question Larry. As part of the settlement, Duke agreed to review all accounts on similar rate schedules going back 2 years and issue corrections where needed. They estimated it could affect about 200 accounts statewide. Not sure if they've completed that review yet.
Fantastic outcome Randy. Stories like this remind me why we need to question every line item, even on accounts we've been auditing for years. Sometimes the utilities change their billing logic without proper notice.
Wow Randy, that's huge! Can you share more details about how you identified the error? Was it in the tariff language or the billing system implementation?
That's a subtle but important distinction. I've seen similar issues with other utilities where the billing system logic doesn't match the tariff complexity. How long did the dispute process take?
This is exactly why I love this forum. Great detective work Randy! I'm going to pull some of my Duke Energy accounts and double-check their demand billing logic now.