Patricia from Huntsville here - working on a manufacturing tenant in an industrial park where TVA service is provided under Schedule MSB (Medium General Power) but the landlord is charging pass-through rates that look more like Schedule MSD (Large General Power). The difference is about $0.023/kWh which adds up to $18,400/month for this 2.2MW operation. Lease says tenant pays "proportionate share of actual utility costs" but I'm not seeing the math work out. Has anyone dealt with TVA rate schedule disputes in pass-through situations? The landlord claims the entire complex qualifies for MSD pricing but I'm skeptical.
TVA industrial rate pass-through question - Schedule MSB vs MSD
Patricia - Terry from Knoxville and I deal with TVA all the time. MSB vs MSD qualification depends on the entire facility's connected load and demand characteristics, not just one tenant. If the complex has multiple large users totaling over 5,000 kW demand, they might legitimately qualify for MSD rates. But the allocation methodology is crucial. Each tenant should only pay their proportionate share of the actual TVA bill, including any demand ratchet charges. Request copies of the actual TVA bills for the past 12 months to verify the rate schedule and demand patterns.
Kevin from Dayton chiming in - we had a similar situation with AEP where an industrial park landlord was claiming lower rates than they actually qualified for. The key is understanding TVA's minimum bill provisions and power factor requirements. If your tenant has poor power factor, they might be driving up costs for the entire complex. Also check if there are any special contract rates or economic development incentives that affect the master meter billing. The $18,400/month difference suggests something major is off in either the rate schedule or allocation method.
Thanks Terry and Kevin - got the TVA bills and you were absolutely right. The complex does qualify for MSD rates at the master meter level, but the landlord was allocating demand charges incorrectly. They were using a simple kWh ratio instead of actual coincident demand data. My client's peak usage occurs during off-peak hours for the complex, so they were subsidizing other tenants' peak demand charges. Corrected allocation saves them about $12,100/month. Still working through the historical adjustment but this was exactly the kind of detail I needed to look for.