Need some advice from the veterans here. Completed an audit for a manufacturing client here in Knoxville (TVA territory) and identified $23,400 in annual savings through rate schedule optimization and demand management recommendations. They implemented everything but now claim there are "no actual savings" because their usage went up due to increased production. My LOA clearly states savings are based on rate analysis, not usage changes. How do you handle this?
Enforcing payment terms - client claiming "no actual savings"
Dale - been there before with Duke Energy clients here in Charlotte. You need language in your agreement that explicitly states savings are calculated using "normalized usage" or "baseline consumption." Production changes are not your problem. Do you have that language?
This is exactly why I include detailed calculation methodology in my engagement agreements. Avista territory here in Spokane - I specify that savings are "the difference between what Client would have paid under previous rate structure versus optimized rate structure, using identical usage patterns." Takes the guesswork out of it.
Dale you might want to prepare a side-by-side billing comparison showing what they would have paid under the old rate vs new rate for the same usage level. Montana-Dakota Utilities clients usually get it when you show them the math that clearly. Sometimes they're genuinely confused, not trying to stiff you.
Nashville here with NES territory. I always include in my agreements that "Client acknowledges that Consultant's recommendations may result in different absolute dollar amounts on monthly bills due to usage variations, but savings are defined as reduced cost per unit of consumption." Covers you completely.
Wayne - my agreement does say "savings calculated based on rate optimization regardless of usage changes" but they're arguing that means nothing if their total bill went up. I think they're just looking for an excuse not to pay. The demand charge alone dropped from $18.50 to $11.20 per kW.
Dale that's a slam dunk case. Entergy territory here in Baton Rouge - demand charge reduction like that is clear, measurable savings regardless of total usage. I'd send them a formal demand letter with the specific tariff calculations showing the per-unit cost reduction. Most clients back down when they see you're serious about collecting.
Had this exact situation with AEP clients here in Charleston. What worked for me was creating a "what if" scenario showing what their bill would have been at current usage levels under the old rate structure. When they saw they saved $1,847 last month alone despite higher usage, they paid up immediately.
This is why I always do a 3-month post-implementation review as part of my service. So Cal Edison territory here - I provide quarterly reports showing cumulative savings vs baseline. Clients can see the value over time and it prevents these payment disputes. Might want to add that to your next agreement.
Thanks everyone. I'm going to prepare the side-by-side comparison Anita suggested and send a formal demand letter. The math is clearly in my favor - they're saving $0.0089 per kWh on energy charges alone. If they still refuse to pay, I'll have to consider small claims court.
Keep us posted Dale. Document everything and make sure you have delivery confirmation on that demand letter. Most clients come around when they realize you're not going to just walk away. The $23,400 annual savings you found is rock solid based on tariff analysis.