Sacramento Municipal Utility District just implemented their new commercial rate structure and it's a mess. The new Schedule GS-TOU1 has demand charges calculated three different ways depending on usage level and season. Their billing department can't even explain how it works. Anyone else dealing with SMUD confusion?
SMUD's 2011 rate restructure - demand charge nightmares
Jennifer, I'm not in SMUD territory but PG&E did something similar last year. The key is getting copies of the actual billing algorithms they're using, not just the published tariff. Often there's a disconnect between what's approved and what's programmed. Have you requested their calculation methodology?
Dan, I tried that approach but SMUD claims their billing calculations are proprietary. However, I've found at least four accounts where demand charges don't match any possible interpretation of their tariff. Working one account where they're billing $3,200/month in demand charges that should be $1,850 based on the published rate.
This is exactly why I love working municipal utilities. They make these changes without proper testing and create goldmines for auditors. In Ohio, AMP-Ohio did similar restructuring in 2009 and I made $80,000 in audit fees just fixing their demand calculation errors.
Jim's right about munis being opportunity-rich. Here in Dallas we have Oncor for delivery but I work accounts in smaller cities with municipal utilities. They often lack the billing system sophistication of major IOUs. When they restructure rates, errors are almost guaranteed.
Update: SMUD finally admitted to billing system errors on the new GS-TOU1 schedule. They're issuing credits but only going back three months instead of the full implementation period. Fighting for full retroactive adjustments. This affects about 200 commercial accounts by my estimate.
Jennifer, push hard on the retroactive period. In Iowa, MidAmerican tried the same limited lookback when they had similar issues. Threatened regulatory complaint and they agreed to full retrospective adjustments. The key is showing the errors were systematic, not account-specific.
Following this thread with interest. JEA here in Jacksonville is planning major rate restructuring for 2012. Want to be ready for the inevitable billing errors. Jennifer, are you finding more issues with demand calculations or energy charges under SMUD's new structure?
Beth, definitely more problems with demand charges. The new time-of-use windows for demand measurement are confusing their billing system. Energy charges are mostly correct but demand calculations are wrong on about 60% of accounts I've reviewed. Focus your preparation on understanding demand charge methodologies.
Alabama Power went through similar restructuring in 2010. The demand charge complexity created audit opportunities for over a year. Key lesson: get copies of customer bills from the month before implementation and compare calculation methodologies. That's where you'll find the most obvious errors.
Great advice from everyone. Rate restructuring periods are goldmines if you know where to look. Documentation is everything - save copies of old and new tariffs, billing statements before and after changes, and any utility communications about the transition. These become evidence for recovery claims.
Final update on SMUD - got full retroactive adjustments for all affected accounts. Total recovery was $127,000 across eight commercial customers. The key was proving their billing system was systematically misapplying the new demand charge structure. Georgia Power is planning similar changes next year so I'm using this experience to prepare.