Running into a situation where a utility (ComEd) is billing a minimum demand charge of 30 kW even though the customer's actual demand was only 18 kW and their contract demand is 25 kW. I thought minimum demand charges only applied when actual usage was below the contract amount, but this seems to be a separate minimum regardless of contract demand. Anyone seen this before?
Minimum Demand Charges - When Do They Apply?
It's Rate 4M - Medium General Service. Looking at the tariff now and I do see language about "minimum monthly demand of 30 kW or actual demand, whichever is greater." Seems like this overrides everything else.
Carl is right - rate schedule analysis is key here. If the customer consistently runs below 30 kW, they might qualify for a smaller commercial rate without the minimum demand provision. Worth checking Rate 2 or 3 to see if they'd save money overall.
Marcus, some ComEd rate schedules do have minimum demand provisions that override both actual and contract demand. It's usually on smaller commercial rates to ensure minimum cost recovery. What rate schedule is the account on?
Marcus, that's correct. On Rate 4M, the minimum demand charge always applies regardless of actual usage or contract demand. Some customers can save money by switching to a different rate schedule if their usage pattern qualifies.