Guys I need some advice here. Manufacturing client in Yonkers on ConEd Schedule 9 just got walloped with an $8,400 demand charge hit from a single HVAC incident. Their normal summer peak runs about 380 kW but last Tuesday morning their building automation system glitched and brought eight 15-ton rooftop units online simultaneously. Demand spiked to 562 kW for exactly one 15-minute interval. ConEd's summer demand charge is $49.77/kW so that 182 kW overage is costing them $9,057 for the year. The client is furious and wants to know how this could happen. Anyone dealt with ConEd on demand charge appeals?
ConEd Schedule 9 nightmare - 15-minute HVAC spike cost $8,400
Larry that's brutal but typical ConEd. I'm in Missouri with Ameren but I've heard ConEd rarely budges on demand charges even for equipment failures. Did you document that it was a BAS malfunction? Sometimes if you can prove it was a system failure beyond normal operation they might consider an adjustment. But honestly, prevention is the only real protection with demand charges this high. What kind of staging controls did they have in place?
ConEd is notoriously tough on demand adjustments Larry. I dealt with them on a similar case in 2021 and they denied the appeal even with clear documentation of equipment failure. The regulatory framework just doesn't give them much flexibility. Your best bet is installing proper demand limiting controls going forward. At $49.77/kW, even a modest 25 kW demand reduction saves over $1,200 annually. The payback on good controls is usually under two years in ConEd territory.
Randy you're right about the controls. This facility had basic time delays but they were set for only 60 seconds between stages. When the BAS reset, it overrode the local controls and tried to bring everything online at once. We're now spec'ing a proper demand controller that can stage up to 16 units with 3-minute delays minimum. The $15,000 installation cost is painful but it's still less than this one demand spike is costing them.
Duke Energy here in Charlotte and we always recommend redundant staging controls for critical applications. Primary control through the BAS but backup time-delay relays at each unit. If the BAS fails or sends simultaneous start signals, the local delays still prevent mass startups. Costs maybe $500 per unit but prevents exactly this scenario. Also consider soft-start kits on the larger units to reduce inrush current even with staging.
WPS up in Wisconsin and I always tell clients that demand charges are like insurance - you pay whether you use it or not. That single 15-minute spike becomes your billing demand for the entire year in most tariffs. It's harsh but that's the reality. Document everything about the BAS failure though. Even if ConEd won't adjust this bill, it might help with insurance claims or equipment warranty issues if the BAS vendor is liable.
Avista territory and we see this exact scenario regularly. The problem is most BAS vendors don't understand electrical demand implications. They program for comfort and efficiency but ignore the 15-minute interval billing. I now require all BAS specifications to include demand limiting logic with maximum kW setpoints. The controls contractor has to prove the system won't exceed the demand limit even during equipment failures or power restoration events.
Larry great point about BAS vendor responsibility. I'm definitely having our controls contractor review their programming standards. This client's BAS was supposed to have load shedding capability but apparently it was never properly configured. The vendor just focused on temperature control and ignored the electrical side. Going forward I'm requiring load management as a deliverable, not just an option. Too expensive to learn these lessons the hard way.
Education is huge here guys. Most facility managers think HVAC controls are just about comfort but they don't realize the financial impact of demand spikes. I always show clients their interval meter data and explain how that single peak affects their entire year's billing. Once they see the dollar impact, they suddenly find budget for proper controls. At ConEd's rates, even small improvements have big paybacks.
Randy exactly right about the education piece. I use ConEd as an example even here in Missouri because their rates are so high it really drives the point home. $49.77/kW means every kilowatt of demand reduction is worth almost $600 per year. When you put it in those terms, spending $15K on proper controls seems pretty reasonable. The challenge is getting facility managers to think long-term instead of just reacting to problems.
Update on this situation - ConEd predictably denied our appeal but we've got the new demand controller installed and commissioned. System is now limiting total HVAC load to 400 kW maximum with intelligent staging of all equipment. Even tested it by simulating a BAS failure and the demand controller held the limit perfectly. Expensive lesson but at least it won't happen again. Thanks for all the input everyone.