Just finished reviewing Avista's latest rate filing here in Washington and I'm seeing some concerning changes to Schedule 25 demand charges. They're implementing a new three-tier demand structure that's going to significantly impact mid-size commercial customers. The billing determinant calculations are completely different from the current structure. Anyone else in Avista territory seeing issues with the initial implementations?
Avista filing in WA - anyone else seeing the demand charge shenanigans?
Ernest, I'm down in Florida but we saw similar multi-tier demand structures with FPL's recent filing. The key thing to watch is how they're calculating the tier thresholds. In our case, they were using 12-month rolling averages instead of monthly peaks, which created significant billing discrepancies. One client overpaid $22,000 in the first quarter alone because the utility wasn't applying the tier breaks correctly.
We've been tracking similar patterns across multiple utilities this year. The trend toward complex demand structures is creating audit opportunities but also making it harder for customers to self-monitor their bills. MLGW here in Memphis is proposing something similar for 2025. The key is getting your clients to understand these changes before they go into effect, not after they've been overpaying for months.
Randy, exactly. The proactive approach is crucial. I've been reaching out to all my Avista clients with detailed explanations of the new structure. Already found two cases where the utility's preliminary billing runs were incorrect. One manufacturing facility would have been overcharged $15,000 annually if we hadn't caught the error during the test period.
This is why I always recommend clients request detailed billing analysis during rate case proceedings. National Grid in Rhode Island tried to implement a similar tiered structure in 2023 but had to delay it twice because their billing system couldn't handle the complexity. When it finally launched, there were errors on 30% of affected accounts in the first month. Total recovery for my clients was over $180,000.
Anthony, that's a huge recovery rate. What were the most common errors you found? I'm trying to build a comprehensive checklist for the Avista implementation. So far I've got: tier threshold calculations, demand ratchet applications, and transition period credits. Anything else I should be watching for?
Add seasonal demand adjustments and power factor corrections to your list Ernest. Also watch for proper application of existing contract demand arrangements - utilities often mess up grandfathered provisions during major rate restructurings. And don't forget to verify that monthly demand charges are being calculated using the correct tier pricing throughout the billing period, not just at month-end.
Great discussion. One thing I'll add from the FPL experience - make sure to review the demand charge calculations for partial billing periods during implementation. We found several cases where prorated charges weren't being calculated correctly, especially for accounts with mid-month effective dates. Saved one client $8,500 just by catching that error pattern.
Kent makes an excellent point about partial periods. That's often where the biggest errors occur because the billing systems aren't programmed to handle the edge cases properly. I always recommend doing a deep dive on any account that has service changes, rate schedule changes, or billing period adjustments during the first six months of a new rate structure implementation.
Update on the Avista situation: They've pushed back the full implementation to October 2024 due to billing system issues. This actually creates more opportunity for errors during the extended transition period. I've got five clients already seeing preliminary billing discrepancies. The extended timeline means more chances for the utility to make mistakes and more time for us to catch them.
Ernest, that delay is actually a gift. Extended transition periods are audit gold mines. Keep detailed records of all the preliminary billings and test runs. When the final implementation happens, you'll have a complete paper trail to identify any calculation errors or inconsistencies. That documentation has been invaluable in my recovery efforts with other utilities.