Food processing plant in Illinois has 1,200kW contract demand with ComEd but actual demand rarely exceeds 900kW. They're paying demand charges on the full 1,200kW every month. Plant manager wants to reduce contract demand but I'm worried about overage penalties. What's ComEd's policy on contract demand adjustments?
Contract demand vs actual demand confusion
ComEd allows one contract demand reduction per year with 30-day notice. But if they exceed the new contract demand even once, the penalty is pretty steep - usually 150% of the excess demand charge. I'd review at least 24 months of data before recommending a reduction. Food processing can have seasonal peaks.
Good point Anita. Looking at their data, they hit 1,150kW during peak production season in summer. Maybe reduce to 1,000kW as a compromise? Still saves them $4,800 annually on demand charges while leaving some cushion for seasonal variation.
That sounds reasonable Ruth. ComEd's overage penalties are no joke - I've seen clients get hit with $8K bills for exceeding contract demand by just 50kW. Better to be conservative and take the guaranteed savings than risk the penalty.