PP&L just implemented new commercial rate schedules here in Pennsylvania. Several of my commercial lease clients are seeing unexpected increases in their utility pass-through charges. Anyone else dealing with rate restructuring impacts on existing lease agreements? The new GS-2 schedule has higher demand charges but lower energy rates compared to the old GS-1.
PPL rate schedule changes affecting lease pass-throughs
We had similar issues when Idaho Power changed their commercial schedules last year. The key is checking if your lease has language about rate changes. Most leases I see just say "pass through actual utility costs" so tenants absorb rate increases. Unless there's specific language capping increases, you're probably stuck with the higher bills.
Sylvia, I'm seeing this with Duke Energy here in Cincinnati too. The new riders and rate adjustments are hitting commercial tenants hard. One client's pass-through went up 23% just from the rate change, no increase in usage. Landlords love it because their admin percentage stays the same but dollar amount goes up automatically.