Picked up three large irrigation operations near Albuquerque served by PNM. Theyre on commercial demand rates even though their load is purely agricultural pumping ? seasonal, high demand during growing season, essentially zero in winter. PNM offers an agricultural pumping rate Schedule AP that has no ratchet and a lower demand charge but these accounts were never moved to it. The original service applications from 15+ years ago just defaulted to commercial.
Irrigation pumping demand ? agricultural clients on commercial rates
George ? agricultural rate misclassification is extremely common in the Southwest. I found the same thing with CPS Energy accounts near San Antonio. Ranches and farms on general commercial rates when agricultural rates with no ratchet exist. The utilities dont proactively reclassify and the farmers dont know to ask.
George ? I see this in Tucson too. TEP has an AG rate specifically for irrigation and agricultural pumping with significantly lower demand charges. Most of the cotton and pecan operations around here are on standard commercial rates because thats what the original electrician put on the service application twenty years ago.
Michelle and Larry ? whats the typical savings percentage when moving from commercial to agricultural rate? For my PNM accounts the demand charge drops from $10.80 per kW to $6.20 per kW. At 450 kW summer demand thats $2,070 per month savings during irrigation season.
In south Texas, AEP has Rate AGS for agricultural service. No ratchet, lower demand charges, and seasonal billing that reduces minimum charges during non-irrigation months. Moved 6 cotton farm accounts from commercial to AGS last year. Average savings $14,000 per account per year. The audit is straightforward ? verify the load is agricultural, apply for rate change, calculate refund for the lookback period.
Oklahoma has interesting agricultural rate provisions too. OG&E Rate AG has a seasonal on/off provision where the account can be completely disconnected during non-irrigation months with no minimum charge. PSO offers something similar. For purely seasonal irrigation loads this eliminates winter demand and customer charges entirely.
Charles ? seasonal disconnect is ideal for pure irrigation but some of these operations have year-round loads like livestock watering, barn heating, and shop equipment. The seasonal disconnect only works if the entire account is truly seasonal. Otherwise a second meter for the year-round loads might be necessary.
Wrapped up all three PNM accounts. Reclassified to Schedule AP. Combined annual savings of $38,400. PNM agreed to 24-month lookback refund totaling $76,800. Simple rate reclassification ? no engineering analysis, no load reduction, just putting the accounts on the correct tariff. Agricultural clients are underserved by auditors and the savings are consistent.