This is embarrassing but I need to share it so maybe someone else can avoid my mistake. Had a manufacturing client in Hartford on CL&P's Large General Service rate. For two solid years I was calculating demand savings based on their monthly peak, completely ignoring the ratchet clause that set billing demand at 80% of the highest demand in the previous 12 months. I was telling them they could save $4,000 annually by reducing their peak demand by 50 kW, when in reality the ratchet meant they wouldn't see any savings unless they dropped below their ratchet level. Client finally questioned why their bills weren't going down despite implementing my recommendations. Had to refund my fees and start over with a proper analysis. Always read the fine print on billing demand calculations - ratchets can completely change the savings equation.
Calculated demand savings wrong for 2 years - ratchet clause nightmare
Ouch Vince, that's a tough lesson. FirstEnergy has similar ratchet clauses that catch people off guard. The key is understanding that billing demand and actual demand are often two completely different things. I always map out the ratchet calculation for at least 24 months of history before I make any demand-related recommendations. It's a pain but prevents exactly this kind of mistake.
Georgia Power has some brutal ratchet clauses too. I learned this lesson the hard way on a textile plant that had a seasonal operation. Their summer peak was setting the billing demand for the entire year. Until I understood that dynamic, all my winter demand reduction recommendations were worthless. Now ratchet analysis is literally the second thing I do after verifying the rate schedule. Thanks for sharing your story - takes guts to admit these kinds of mistakes but it helps everyone.