Got a client here in Charlotte with a small retail shop. Piedmont Natural Gas is hitting them with what looks like a demand charge on Schedule SGS-2, but I've never seen this before on accounts under 500 therms/month. Bill shows $47.82 "capacity charge" that wasn't there last winter. Anyone familiar with Piedmont's small commercial tariffs? This doesn't match what I have in my files from 2010.
Piedmont Natural Gas - Weird Demand Charge on Small Commercial Account
Derek - Piedmont revised their SGS tariffs in late 2011. That capacity charge kicks in if they hit peak day usage over a certain threshold, even on smaller accounts. Check if your client had any equipment changes or extended hours during the polar vortex in January. I've seen bakeries and restaurants trip this when they fire up extra ovens during cold snaps. The threshold is pretty low, something like 15 therms on the peak day.
Jim's right about the threshold change. I caught this on a Knoxville Gas account last year - similar deal. What you want to look for is the daily usage data during that billing period. If they spiked above their historical winter peak, boom, you're into demand territory. The capacity charge usually runs about 18 months once triggered unless they formally request a reset.
This is exactly why I tell clients to monitor their daily gas usage during winter months. Connecticut Natural Gas has similar provisions on their GSS schedules. Derek, request the daily interval data from Piedmont - they have to provide it. Look for any day in December-February where usage spiked abnormally. Could be a malfunctioning thermostat, stuck valve, or just poor building envelope during extreme cold.
Thanks everyone. Got the interval data from Piedmont - client hit 18.3 therms on January 23rd when temps dropped to 8°F. Normal winter day for them is 8-10 therms. Turns out their HVAC contractor installed a backup heating system in December and didn't mention it would cycle on during extreme cold. Client had no idea. Now fighting to get the capacity charge waived since it was equipment malfunction.
Good catch Derek! Louisville Gas has a similar "equipment malfunction" clause that can void demand charges if you can prove the spike was due to faulty equipment. Make sure you get documentation from the HVAC contractor about the backup system and when it was supposed to activate vs. when it actually did. Piedmont's pretty reasonable about these situations if you have the paperwork.
Just a heads up - Dominion East Ohio has started implementing similar capacity charges on their small commercial accounts. Saw three clients get hit with this in March. The threshold here is 12 therms peak day usage. These utilities are getting more aggressive about cost recovery through demand-type charges even on smaller accounts.
Update: Derek, did you get that capacity charge reversed? I'm dealing with a similar situation on a Columbia Gas account in Youngstown and could use ammunition for my appeal. Customer had a boiler control malfunction that caused a 22-therm day in February.