Working on a complex case with Minnesota Power here in Duluth involving TOU demand charge errors. Large industrial customer on Rate Schedule LGS is getting charged peak demand rates for usage that occurred during clearly defined off-peak hours. The interval data shows their highest demand events happen between 11 PM and 3 AM, which should be off-peak under the published tariff, but MP is applying peak demand charges anyway. This adds up to $6,800 monthly in incorrect charges. Anyone dealt with similar demand window errors?
Minnesota Power TOU billing errors - demand charges during off-peak hours
Clifford, I've seen this type of error with Entergy in Louisiana. Sometimes their billing systems confuse energy TOU windows with demand TOU windows, or apply the wrong rate schedule altogether. You need to verify that MP is using the correct demand window definitions from the LGS tariff. Also check if they're applying ratchet provisions correctly - that can sometimes make off-peak demand charges appear as peak charges on the bill format.
Estelle raises a good point about ratchet provisions. I had a similar case with Duke Energy in Cincinnati where apparent "peak demand errors" were actually billing presentation issues. The customer's actual peak demand occurred during off-peak hours, but the ratchet clause required billing at 75% of the previous 12-month peak regardless of when it occurred. The bill format made it look like off-peak demand was being charged at peak rates. Double-check the tariff language carefully.
Ruth, I considered the ratchet angle but that's not the issue here. The LGS tariff clearly states peak demand hours are 8 AM to 10 PM weekdays, off-peak is all other hours. My customer's maximum demand consistently occurs at 1-2 AM, well outside peak hours. But MP bills show "Peak Demand Charge" line items every month. I've requested detailed billing calculations from MP but they're dragging their feet on providing documentation.
Clifford, if MP won't provide billing calculations voluntarily, file a formal data request with the Minnesota PUC. Utilities have to respond to regulatory data requests within specific timeframes. I've used this approach with Otter Tail Power here in North Dakota when they stonewalled on billing documentation. Once the PUC gets involved, utilities usually become much more cooperative about explaining their billing methodologies.
Kurt's suggestion about PUC involvement is solid. I've found that utilities often have internal billing system errors they don't want to admit publicly. Minnesota Power might be applying an old rate schedule or have their demand window programming wrong. Before escalating to regulators though, try requesting a field audit of the customer's meter and billing setup. Sometimes a utility technician will spot obvious errors that billing department staff miss.
Randy, good point about the field audit approach. I've requested that MP send a technician to verify the meter setup and billing parameters. Also discovered something interesting while reviewing older bills - this demand charge error started in July 2023, coinciding with a meter upgrade. Prior bills show correct off-peak demand charges. Looks like the new meter installation might have triggered incorrect billing system programming. Will update when I hear back from MP's field team.
Clifford, that meter upgrade timing is very telling. I had a similar situation with ComEd in Wisconsin where a smart meter installation corrupted the customer's rate schedule coding in their billing system. The new meter defaulted to a different TOU profile than what the customer was actually supposed to be on. ComEd had to manually reprogram the billing system and recalculate 8 months of bills. The meter upgrade connection makes this case much stronger.
Linda P.'s meter upgrade experience matches what I've seen with PacifiCorp. Smart meter installations often trigger billing system changes that don't get properly verified. The field technician focuses on meter functionality but doesn't always check if the billing parameters transferred correctly. Clifford should ask MP to provide screenshots of the customer's billing profile before and after the July 2023 meter upgrade to identify exactly what changed.
Great suggestion, Clyde. I've requested billing system screenshots from before and after the meter upgrade. MP initially resisted but agreed when I mentioned potential PUC involvement. Should have the documentation within a week. Also learned that several other large customers got new meters around the same time, so this might be a widespread issue. If MP screwed up multiple installations, the total overcharges could be substantial.
Clifford, if other customers had similar meter upgrades and billing issues, you might want to suggest a broader audit to MP or the PUC. Utilities sometimes prefer to address systemic problems proactively rather than deal with individual complaints that expose widespread errors. The industrial customer impact alone could be hundreds of thousands in incorrect charges if multiple large accounts are affected by the same billing system programming error.
Estelle's right about suggesting a broader audit. I had a case with Duke Energy where one billing error led to discovery of similar problems across 40+ commercial accounts. Duke ended up issuing over $200,000 in refunds and implementing new quality control procedures for meter upgrades. If Clifford can document the pattern of errors, MP might be willing to do a voluntary system-wide review rather than wait for regulatory enforcement action.
Update: MP provided the billing system screenshots and confirmed the meter upgrade corrupted my customer's demand window settings. The system defaulted to charging all demand as "peak" regardless of time of occurrence. MP admits similar errors affected 12 other industrial customers from the same meter upgrade batch. They're now calculating refunds for all affected accounts and implementing new verification procedures for future meter installations. Total refunds expected to exceed $150,000.
Clifford, excellent work on this case. That's exactly the kind of systematic error that costs customers huge amounts if left unchecked. The fact that MP admitted the problem and is proactively addressing other affected customers shows they recognize the seriousness. Make sure they pay interest on the refunds and document their new verification procedures. This case should be a model for how to handle utility billing system errors properly.