Just wrapped up a water utility audit for a chemical processing facility here in Delaware and wanted to share some findings. Client was being charged under Artesian Water's Industrial Rate I-2 but their actual usage profile qualified them for the more favorable I-3 rate. Over 4 years, they overpaid $180,000 in demand charges and tier pricing. The kicker is they've been on I-2 for over 15 years and no one ever reviewed the rate classification. Sometimes the biggest savings are hiding in plain sight.
Water bill audit goldmine - found $180k in overcharges at chemical plant
Wow Laura, that's a huge find! I've been focusing mostly on electric audits but clearly need to expand into water bills more. What specific usage thresholds qualified them for the I-3 rate? Here in Wisconsin most of our industrial clients are on Milwaukee Water Works or smaller municipal systems where the rate structures are pretty simple. But those kinds of savings would definitely justify expanding my services.
Glen, the key was their peak demand pattern. I-2 has higher demand charges for peaks above 500 GPM but I-3 was designed for facilities with consistent high-volume usage over 1000 GPM. This client runs 24/7 with steady 1,200-1,400 GPM draw. The demand charge differential was $2.40 per hundred gallons on peaks. Add in the volumetric tier pricing differences and it really added up. Water audits often get overlooked but the math can be just as compelling as electric.
This is exactly why I always request at least 2 years of water bills on any industrial audit. Here in South Texas, SAWS has some really complex rate structures for large users that most customers don't understand. I found a petrochemical facility that was eligible for their Industrial Incentive Rate but had been on standard Industrial for 8 years. Saved them $95,000 annually going forward. Water utilities don't proactively move customers to lower rates any more than electric companies do.
Great work Laura! I've had similar experiences with Pennsylvania American Water. Their industrial tariffs have some obscure provisions for process water users that can result in significant savings. The challenge is that water utility customer service reps often don't understand their own rate schedules as well as electric utility staff do. I've learned to go straight to the regulatory department when I have rate classification questions.
Louisiana has some unique water rate structures due to our industrial base. Sewerage & Water Board of New Orleans has special provisions for facilities that discharge process water to treatment plants vs. those that have their own treatment. The rate differential can be substantial - I've seen savings of $40-60k annually just by properly documenting discharge patterns and getting the right rate classification.
Juan brings up a good point about discharge classification. Here in Alabama, Huntsville Utilities has separate rates for facilities that discharge to sewer vs. those with direct environmental discharge permits. The documentation requirements are extensive but the savings justify the effort. I always recommend clients maintain detailed process flow diagrams and discharge monitoring records to support rate applications.
This thread is gold! I've been missing opportunities by not diving deeper into water bills. West Virginia American Water has some industrial rates I've never fully analyzed. Laura, did you have to provide historical usage data to get them reclassified retroactively, or was it just prospective? The $180k recovery suggests you got retroactive relief which is always the hardest part.
Wanda, getting retroactive relief was the trickiest part. Artesian initially only wanted to apply the new rate going forward. I had to file a formal complaint with Delaware PSC citing their tariff language that says customers should be on the most advantageous rate available. The key was proving the client had always qualified for I-3 based on their usage patterns. Took 6 months but we got full recovery minus a $500 administrative fee.
Oklahoma utilities are generally more cooperative about retroactive rate corrections, probably because our Corporation Commission is pretty customer-friendly. I've had success getting 12-24 months of retroactive adjustments without formal complaints. The key is framing it as correcting a billing error rather than requesting a rate change. Semantics matter when dealing with utility customer service departments.
Susan makes an excellent point about framing. Here in Tennessee, I've found that approaching it as a "tariff compliance review" rather than a "rate change request" gets much better reception from utilities. EPB and Chattanooga Water both have been receptive to this approach. Great thread Laura - this kind of case study is exactly why I love this forum!