New to auditing FPL accounts in Jacksonville after years of working JEA accounts. FPL doesnt use a traditional ratchet clause. Instead they bill demand as the higher of current month peak or the average of the two highest monthly peaks in the previous 12 months. This is a fundamentally different mechanism than a percentage ratchet. Has anyone else found this averaging approach harder or easier to work with than a straight ratchet?
Florida FPL demand billing is different from everywhere else
Henry ? Ive audited FPL accounts in Tampa for years. The two-highest-months average is actually more favorable for clients than a straight percentage ratchet in most cases. If a client has one freak spike, a percentage ratchet punishes them at that percentage for 11 months. FPLs method averages that spike with the second highest month which moderates the impact. Unless both highest months are spikes, the floor is lower than an 80% ratchet would produce.
Nancy ? interesting perspective. So the FPL method is actually more favorable? I assumed it was worse because it references two months instead of one. But mathematically youre right ? averaging two peaks is lower than 80% of a single peak in most scenarios.
Brenda ? great point about the scenario-dependent comparison. I need to model both methods side by side for my clients who have locations in both FPL and Duke FL territories. The difference in ratchet mechanisms means identical usage patterns produce different annual demand costs depending on which utility serves the account.
One more FPL quirk to watch for: their General Service Demand tariff GSDT-1 has a different demand calculation during the March-October cooling season versus November-February. During cooling season the demand charge is higher. Make sure youre comparing apples to apples when analyzing seasonal demand patterns on FPL accounts.
I audit Duke Energy Florida accounts in Tallahassee and FPL accounts in south Florida. The difference in demand billing between the two utilities within the same state is significant. Duke FL uses a straight 60% ratchet. FPL uses the two-month average. For a client with one anomalous peak month, FPL billing is more favorable. For a client with consistently high summer demand across multiple months, Duke FLs 60% ratchet might actually produce a lower winter floor.