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Demand

Demand ratchet errors

Billed demand is set by a ratchet that uses the wrong percentage, a peak outside the look-back window, or a peak that should have been excluded.

How often we find it
Found on roughly 1 in 11 demand-metered accounts we audit
Typical impact
5% to 20% of demand charges for the affected months

A demand ratchet sets a floor under billed demand. Instead of billing only the highest demand recorded this month, the tariff bills the greater of that figure or a stated percentage of the highest demand recorded over a look-back period, typically the prior 11 or 12 months. The percentage varies by tariff and by season: 50%, 60%, 75% and 80% are all common, and some schedules apply the ratchet only to summer peaks. Because the ratchet is computed in the utility's billing system from stored history, it fails quietly. A peak can stay in the calculation after it has aged out of the window. The wrong percentage can be applied after a rate change. A one-time spike from equipment testing or a utility-caused outage restart can set the ratchet for a year. And when a meter is replaced, the old meter's peak is sometimes carried over at the wrong multiplier. Each of these produces billed demand above what the tariff allows.

How it happens

  • The billing system keeps a peak in the ratchet calculation after it falls outside the 11 or 12 month window.
  • A tariff revision changed the ratchet percentage or season, but the account still uses the old parameters.
  • A startup spike after a utility outage, or a commissioning test, sets the ratchet when the tariff or a written agreement allows it to be excluded.
  • A meter exchange carries the old peak forward at the wrong multiplier.
  • The ratchet is applied to a schedule or a season the tariff does not ratchet.

How to detect it

  • For each bill, recompute billed demand as the greater of metered demand and the tariff's percentage of the highest demand in the stated window.
  • Confirm the window length and whether it counts the current month, the prior 11 months or the prior 12 months.
  • Check whether the tariff ratchets all months or only summer months, and whether the percentage differs by season.
  • Look for single-interval spikes in the interval data that coincide with outages or meter work.

Evidence the utility will accept

  • Bills for the full look-back period showing metered and billed demand
  • The tariff sheet containing the ratchet provision for the billing period
  • 15-minute interval data around the peak that set the ratchet
  • Utility outage notices or meter exchange records, where the peak followed one

Recovering the overcharge

We file a dispute with a month-by-month recomputation of billed demand, cite the ratchet provision, and request rebilling of every affected month inside the back-billing window. Because a ratchet error persists until the bad peak ages out, a single mistake usually spans 6 to 12 bills. Utilities generally accept these claims once the calculation is shown against their own stored demand history.

Questions we get asked

No. Ratchets are approved tariff provisions that recover the cost of capacity built to serve your peak. The error is a ratchet computed with the wrong percentage, window, season or peak.

Sometimes. Some tariffs and utility practices allow exclusion of demand caused by a utility outage, a utility-requested test or a documented meter fault. Policies differ, so we cite the specific provision or request a waiver with evidence.

Stagger equipment restarts after outages, avoid running all chillers and compressors at once, and watch interval data for spikes. Trace Global flags a new 12-month high as soon as the bill posts.

Find this error in your own bills.

Connect bills for up to 50 meters. Get the findings report in about three weeks. Pay nothing unless money comes back.

from bill access to first findings report
21 daysfrom bill access to first findings report
of filed claims accepted by the utility in full or in part
94%of filed claims accepted by the utility in full or in part