I have three ski resort clients in Kentucky and West Virginia. Their peak demand hits in November-February when snowmaking equipment runs at full load ? were talking 2,000+ kW peaks. But in the summer when the resort is basically closed and running maybe 150 kW for maintenance, theyre still getting billed at the ratcheted demand from winter. LG&E Rate TTP has an 80% ratchet. So their summer demand charge floor is 1,600 kW even though actual demand is 150 kW. The summer bills are absurd relative to actual usage.
Seasonal businesses getting crushed by winter ratchets in summer
Diane ? this is the textbook case where a seasonal rate or interruptible rate might save the client money. Does LG&E offer a seasonal commercial tariff? Some utilities have provisions where seasonal businesses can request a demand reset or reduced ratchet if they can demonstrate the load is genuinely seasonal.
Same issue in Alaska but in reverse ? fishing operations peak massively in summer and barely operate in winter. Chugach Electric Rate 23 has a seasonal demand provision that allows a 50% ratchet for accounts that can demonstrate seasonal load characteristics. The client has to apply for it and provide 24 months of billing history showing the seasonal pattern.
Charles ? LG&E does have a seasonal provision buried in Rate TTP but the application process is painful. You need 36 months of billing history, documentation of the seasonal nature of the business, and a letter from the customer explaining why the load is seasonal. Ive gotten it approved once. Took 4 months.
In Arkansas, Entergy Arkansas has Rate Schedule LGSL ? Large General Service Low Load Factor ? specifically designed for seasonal and low load factor accounts. The demand charge structure is different and theres no ratchet. If the account qualifies, the savings can be dramatic. I moved a cotton gin from LGS to LGSL and their off-season bills dropped by 40%.
Arthur raises the most important point ? rate reclassification. Before fighting the ratchet, check if there is a tariff specifically designed for the clients load profile. Many utilities have seasonal, interruptible, or low-load-factor tariffs that eliminate or reduce the ratchet problem. The correct rate schedule is always the first thing to verify.
Update: got the LG&E seasonal designation approved for one of my three ski resorts after 5 months of back and forth. Summer demand charges dropped from $19,200 to $4,800 for the June-September period. Working on the other two now. Arthur ? Ill check if Kentucky has an equivalent to that Entergy LGSL rate. Great tip.
Excellent thread. Seasonal businesses are among the most overcharged commercial accounts precisely because standard ratchet provisions dont account for legitimate seasonal load variation. The solutions in order of effectiveness: 1) Rate reclassification to a seasonal or low-load-factor tariff 2) Applying for seasonal demand designation with the utility 3) Negotiating a reduced ratchet percentage 4) As last resort, requesting separate seasonal and non-seasonal metered accounts. Always check for alternative tariffs before fighting the ratchet directly.
This hits close to home. I manage properties for several seasonal businesses in Tallahassee ? waterparks that peak May through September and are basically dormant October through April. Duke Energy Florida GSDT-1 uses a 60% ratchet. Summer peak of 800 kW means winter floor of 480 kW when actual demand is 60 kW. Ive been told theres no seasonal exception.