Factory client in Madison, MG&E account. Power outage lasted 6 hours on a Wednesday afternoon ? utility confirmed it was their equipment failure. When power was restored at 8pm the client restarted all production lines simultaneously to make up lost production. That restart created a demand spike 40% above normal peak demand. The spike set a new ratcheted demand that will cost the client approximately $22,000 over the next 11 months. The demand spike was directly caused by the utilitys outage. Any basis for a claim?
Demand charges during utility-caused outages ? should they count?
Roy ? most tariffs exclude utility-caused service interruptions from demand billing adjustments. The tariff language typically says the utility is responsible for reliability but demand charges are based on metered usage regardless of cause. However some state PUCs have ruled that demand spikes directly attributable to utility-caused service restoration should be excluded. Check Wisconsin PSC precedent.
Dorothy ? I checked Wisconsin PSC cases. Found a 2019 ruling where the PSC ordered We Energies to adjust demand billing for a manufacturer whose post-outage restart spike was directly attributable to a utility equipment failure. The ruling was narrow ? it required documented proof that the outage was utility-caused and that the restart spike exceeded what normal operations would have produced.
Interesting precedent. In Connecticut Ive never seen Eversource voluntarily adjust demand for post-outage restart spikes. Their position is that the customer is responsible for their own load management during restart. They actually recommend customers implement staged restart procedures specifically to avoid demand spikes after outages.
Clifford captures the dynamic perfectly. Filed the claim with MG&E citing the Wisconsin PSC precedent. Provided the outage report confirming utility equipment failure, interval data showing the spike was post-restoration not normal operations, and calculated the financial impact. Waiting for response.
Virginia is right about the utility perspective. From the utility side we always told customers to plan for staged restarts. But the reality is that a factory that just lost 6 hours of production is under enormous pressure to restart immediately. Telling them to stage their restart over 2 hours to manage demand is tone-deaf when theyre losing $50,000 per hour in production.
Update: MG&E denied the demand adjustment citing their tariff language. Filed a formal complaint with Wisconsin PSC. The PSC staff review agreed with our position and recommended MG&E adjust the demand billing for the month in question. MG&E complied. Client saved $22,000 in ratcheted charges. Took 5 months but the precedent was there. Not every state will have this but its worth checking PUC rulings in your jurisdiction.