Client in Spokane has a 500 kW diesel backup generator for their data center. Avista bills them a standby charge based on the generator capacity even though the generator only runs during outages or monthly testing. The standby charge is $3.50 per kW per month ? thats $1,750 monthly or $21,000 annually just for HAVING a generator. Is this standard?
Demand charges on standby/backup generators ? billable?
Ruth ? standby service charges are common for accounts with backup generation because the utility has to maintain infrastructure capacity to serve the load when the generator isnt running. Xcel in Denver charges standby at about 60% of the standard demand rate. But check whether the standby charge is based on generator nameplate capacity or the actual standby load. If the generator is 500 kW but the actual critical load it supports is only 300 kW the standby charge should be based on 300 kW.
Robert ? great catch. The Avista standby contract specifies 500 kW based on the generator rating. But the actual critical load panel is only 280 kW. The generator is oversized for the load. If I can get the standby charge based on actual critical load instead of generator capacity that saves $770 per month.
In Raleigh, Duke Energy Progress standby service tariff Schedule SBS requires the customer to submit an annual standby load declaration. Many customers never update it after the initial installation and end up paying for capacity they no longer need. Ive found data centers that expanded their on-site generation but never updated the standby declaration downward. They were paying standby charges on load the generator now covers.
William raises another common issue. Any time a client adds or upgrades backup generation, the standby service agreement should be revisited. More generator capacity means less standby load the utility needs to reserve. The standby charge should decrease as backup generation increases. Most clients never think to request that adjustment.
From the utility side ? standby charges are legitimate because the utility must maintain reserve capacity. But the charge should reflect actual standby load, not generator nameplate. I processed dozens of standby service agreements at my utility and we always verified actual critical load with a load study. If Avista used generator nameplate without a load study that may be an overcharge.