Walt from Pittsburgh. New client, printing facility, called me because his bill jumped and he could not figure out why. Turned out one hot August two summers ago pushed his peak demand to 340 kW. His tariff had a ratchet clause that billed him at 90 percent of that peak for the next 11 months. He had no idea what a ratchet was. He thought demand charges reset every month. The overcharge was $31,000. Filed the dispute, argued the peak was an anomaly, recovered $18,400. Anyone else finding ratchets this way?
Ratchet clause cost my client $31,000 — he had no idea
Karen from Boise. Yes and the ratchet education moment is always the same. Clients are genuinely shocked that one bad month can follow them for a year. I now explain ratchet clauses on every initial consultation even when there is no evidence of a problem.
Mike D from Raleigh. The one-time anomaly argument is the right play. If you can document what caused the peak the utility sometimes grants relief, especially if the client has a long clean history.
The peak was driven by an air conditioning failure. Two rooftop units went down simultaneously and the backup units ran at full capacity for three days. The HVAC company had service records. That documentation made the argument airtight.
Frank from Albuquerque. Equipment failure documentation is exactly what utilities respond to. I keep telling clients to save every service record. Situations like this are why.
Jim from Scottsdale. Did the client have any awareness that a ratchet was even in his tariff, or did he just sign the service agreement without reading it?