Need some help understanding Georgia Power's contract demand provisions. Client has a contract demand of 2,000 kW but their actual billing demand has been running 2,200-2,400 kW. Are they being charged correctly? Schedule PL-1 rate.
Georgia Power - Contract demand vs Billing demand
Marcus, with Georgia Power you typically pay for whichever is higher - contract demand or actual billing demand. So if they're hitting 2,400 kW, they should be paying demand charges on 2,400 kW. However, there may be additional penalties for exceeding contract demand.
Meredith is correct. Georgia Power Schedule PL-1 has an excess demand penalty when you exceed contract demand by more than 5%. Check the tariff for the exact penalty rate - it's usually 150% of the standard demand charge for the excess amount.
Thanks Phil and Meredith. Looking at the bill more carefully, I see they are paying the penalty. $21.50/kW for the first 2,000 kW and $32.25/kW for anything above. Client needs to either reduce load or increase their contract demand.
Marcus, increasing contract demand is usually the easier solution if the higher load is going to be ongoing. The penalty rate makes it expensive to consistently exceed contract demand. Georgia Power is pretty flexible about contract modifications.