Property management client in Milwaukee has 3 vacant commercial buildings. No tenants, no operations. Just security systems and minimal HVAC to prevent pipe freezing in winter. Each building still paying demand charges based on ratcheted peaks from when they were occupied 18 months ago. Combined demand charges on the three vacant buildings exceed $4,200 per month for facilities drawing less than 15 kW each. How do you address this?
Demand charges on vacant buildings ? still paying full ratchet
Dorothy ? three options in order of aggressiveness: 1) Request temporary service disconnect and reconnect when tenants are secured ? eliminates all charges but takes 2-3 weeks to restore service. 2) Request a billing demand reduction to reflect current load ? many utilities will reset the ratchet for documented vacancy. 3) Downsize the transformer and service entrance to match actual load ? permanent reduction but costly if tenants return.
Sharon ? option 1 is problematic because the buildings need power for fire alarm panels, sprinkler system heat trace, and security cameras. Complete disconnect risks code violations and insurance problems. Option 2 seems most reasonable. Has anyone successfully gotten a ratchet reset for vacant buildings?
Dorothy ? in Milwaukee, We Energies has a vacancy provision in their Cg-7 rate. If the customer provides documentation that the building is vacant (no certificate of occupancy, no active tenants), WE will reduce billing demand to actual metered demand. I used it for an empty warehouse in 2022. Demand charges dropped from $3,100 to $180 per month. Required a signed vacancy affidavit and proof of vacancy.
Dorothy A here ? thank you for that tip. We Energies does have the vacancy provision. Filed for all three buildings with vacancy affidavits and current tenant schedules showing zero occupancy. Two were approved within 3 weeks. Third was denied because it still had one small tenant on month-to-month. Even with two approved the monthly savings is $2,800.
In Tallahassee, vacant building demand charges are a constant issue for my property management clients. Duke Energy Florida does NOT have a formal vacancy provision but Ive had success writing letters to their commercial billing department requesting demand reset based on documented change of building status. Approved about 60% of the time. The key is documentation ? lease termination notices, vacancy dates, current meter readings showing minimal load.
Follow up ? the third building with the small month-to-month tenant has now fully vacated. Filed for vacancy provision. Approved. All three buildings now billing on actual demand. Total monthly savings across the three properties is $4,050. Annual savings of $48,600 for the property management company from demand ratchet resets alone. This should be standard practice for any PM company with vacant properties.