Was reviewing PPL's 2013 rate filing here in Pennsylvania and almost missed something buried deep in the tariff schedules. On page 127 they're proposing to change how they calculate the demand ratchet for Schedule GS customers. Currently it's 75% of the highest demand in the past 12 months, but they want to change it to 80% of the highest demand in the past 18 months. Seems like a small change but it could add thousands to annual bills for seasonal businesses. Anyone else catch this in their filing?
PPL rate filing has a nasty surprise on page 127
Sylvia, that's exactly the kind of detail that utilities hope nobody notices. FirstEnergy pulled something similar here in Ohio a few years back - they extended their demand ratchet from 11 months to 13 months and hardly anyone objected during the rate case. It's particularly brutal for customers with seasonal peaks like ice cream manufacturers or ski resorts. A customer who hits 500kW demand one summer month could be paying demand charges on 400kW all winter long instead of their actual 200kW winter usage. The math adds up to serious money over time.
Jim's right about the seasonal impact. Down here in Texas we see a lot of customers get hammered by demand ratchets during our brutal summers. AEP Texas has a 75% ratchet over 11 months, which means a business that peaks at 1000kW in July is still paying demand charges on 750kW in December when they might only be using 300kW. I always tell clients to look at installing load control systems or backup generators to shave those summer peaks. Even a small reduction during peak months can save thousands all year long through the ratchet mechanism.