Utility shenanigans

[arrow]

Here in the Northeast, most of us are supplied energy by a company called National Grid. This company has instituted what is called a "demand charge" This is a charge that is added to a usage charge. NGrid has convinced state authorities that in order to supply the region enough electricity or natural gas, they have had to build equipment and facilities that are most often in "stand by mode" because it is only used in peak operations. Ngrid feels they should be paid for the construction and upkeep of this equipment when it is not making them money though energy use. So one account of mine used 19 kwhs last month. The electric bill came to $346. About $40 for actual electricity used and fees and then "demand charges" were $305. No matter how little electricity is used, the bill will always include these demand charges. I was wondering if anyone else across the country has put up with this kind of charging from their utility provider.

 

[DocHeb]

Why shouldn't they be paid for this? Everybody expects the light to come on every time the light switch is flipped, 24/365, no matter how high the load being requested by the users. Everyone pays for facilities for peak generation one way or another - yours just happens to be a line item. Pretty soon you will be charged for windmills, and then be charged for the plants that will need to be built to operate when the wind isn't blowing. All courtesy of those who know what is good for us.

 

[Mousefield]

NGrid has convinced state authorities that in order to supply the region enough electricity or natural gas, they have had to build equipment and facilities that are most often in "stand by mode" because it is only used in peak operations. Ngrid feels they should be paid for the construction and upkeep of this equipment when it is not making them money though energy use.

If you and other users don't pay for this stand by equipment who should??? Not sure from were this company would get free? money to build and maintain the stand by infrastructure. It sounds like a guy who complained about not enough planes on the long weekends and they had to wait several hours. Figured "someone" should have hundreds of millions of dollars in planes and thousands of staff just sitting there for peak demand. Not only do you have capital cost but also maintenance, insurance etc. that has to be paid. As an earlier post said, they show it as a line item or they could hide it in the overall charge.

 

[dex3361]

In our area we pay a demand charge for Industrial Power. The charge is based on the Peak KW demand for a 15 minute period. It is the biggest part of the industrial bill. The rate is about $13.00 per KW Demand and then the KW usage is on top of that.

 

[ultrarunner]

More of my neighbors have gone to solar... and so far, all have been pleased.

The only difference I see in providing service is that Utilities are granted a monopoly of sorts and with that comes concessions....

The rural electrification act made power available to many even when it would take many years to recoup the cost if that.

A friend was on a CA Public Utility Commission and he was surprised that many times there was almost no one from the public attending.... he also said, public input does have an impact.

Right now, some CA cities are in the planning stages to take control of utilities in their cities and the Utilities are fighting back...

 

[forgeblast]

Poster is right 300 on a bill is nasty on the old checking account. My max with electric baseboard and a small space heater is about 210, in the dead of winter. If i was paying that much i would look into getting off the grid, or at least panels that would earn some money back. ouch it should be a sliding scale, based on usage.

 

[Cat_Driver]

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[dave1949]

Something doesn't sound right Arrow. Is this for a commercial/industrial account?

My last residential bill was $51.75 for 334 KWH without any demand metering.
Dave.

 

[tallyho8]

We have had demand charges on commercial and industrial accounts for many years. There are none on residential accounts.

I used to take a 3 month winter vacation and close my air conditioning shop during this time. Although I used only about 1 KWH a month for a night light, I was charged about $100 a month for 10 cents worth of electricity.

After awhile, I learned how to reduce my peak demand by limiting the number of air conditioners that I would test run at one time. By cutting my demand in half I was only charged about $50 a month during winter after that for 10 cents worth of electricity.

 

[SPIKER]

They are doing some advertising locally about demand metering and that the big city elec utility is going to start doing this and charging people when demand peak days are higher they will add FINES on top of the higher cost for the power at those times.

I'm on rural coop. so they only want to maintain low rates. but we hear all summer long peak energy alerts, I worked electrician maintenance in factory and we had to cut usage on several times a year on hot days... running around a BIG factory turning off stuff that was running in standby or not directly used when called for, killing 1/2 ights while people working & all...

Mark M

 

[Ken45101]

We had that charging setup where I worked 30 years ago. Of course, it was negotiated with the power company for a low rate. To avoid the high demand charge, we ran the entire facility off of the backup generators from 8-4 every day.

The extreme costs quoted seem out of line, but you'd have to inspect the usage data and see where the peak was coming from and if it was justifed. Or could be eliminated.

The utility here is offer a small rebate to be able to turn off your A/C at peak periods. It makes sense from their standpoint, but we use the A/C only for a few weeks a year and I don't really want them messing around with our unit for a $25 rebate.

Ken

 

[radman1]

In my region, the utility rates are lower than most in the country. (or at least that is what the utility company tells me.:thumbsup I find it funny the electric company spends lots of money for advertising (it is a monopoly) and try to lure more customers with rebates for heat pumps, all electric houses ect. When the price of fuel went up, they begged to increase their rates. I understand that and the rate went up considerable in 2008. Last year was a mild summer, and a/c was used at lot less and they were selling less electricity but fuel costs were much cheaper. Again they begged for a rate increase. Again they got a increase. Now demand and prices are more stable. Do the rates come back down? Nah.

 

[Tig]

On my bill the amount of electricity I use is multiplied to adjust for "transmission losses". This adds 9% to the amount and reconciles what they produce at the plant to what gets billed. So in essence it pays for grow op stolen power as well as Ohms law.
Next we have a debt retirement charge. That pays for business mismanagement and insane severance packages for grossly incompetent, publicly exposed executives.
Next is delivery, yes we bill that separately to allow competition in the sale of the power.
I've probably missed some line items, but at present I use less than $50 of electricity and I pay $150. We do use very little power because we have hunkered down in minimal accommodation while we prepare to renovate. I don't think our power prices are excessive I just find it amusing how one can mismanage an essential utility and then just add line items to invoices to fund this. Imagine your customers accepting this type of transparency.
On the horizon is time of use pricing which will inevitably increase the bottom line on my bill. The bottom line is that it is still the cheapest, most efficient way to get the power I need.

 

[arrow]

If you and other users don't pay for this stand by equipment who should??? Not sure from were this company would get free? money to build and maintain the stand by infrastructure. It sounds like a guy who complained about not enough planes on the long weekends and they had to wait several hours. Figured "someone" should have hundreds of millions of dollars in planes and thousands of staff just sitting there for peak demand. Not only do you have capital cost but also maintenance, insurance etc. that has to be paid. As an earlier post said, they show it as a line item or they could hide it in the overall charge.

The account used 19 kwh. You want me to be ok with being charged $346 for this? Our alledged kwh cost is about 14 cents. So in effect, my actual usage cost came to $2.66. Fees added another $37. Demand came to over $300 on an account that has never exceeded 1800kwh per month and this only happens for 2 months. The rest of the time. The account uses form 0 to 40 kwh. Why should anyone be charged on that one off, 15 minute time frame as opposed to a cost profile based on a longer assessment so it can go down in a more reasonable manner. It establishes in 15 minutes but takes almost 6 months to get down to half that cost. Costs born for overhead is one thing, but this feels like outright abusive charging as a result of a basic monopolistic mindset. Read my original post. Did I for one second question the feasibility of such a charge type? I didn't post this to get a lecture on business economics. I posted this to see where else in the country this was happening to the extent its happening here.

 

[ultrarunner]

The account used 19 kwh. You want me to be ok with being charged $346 for this? Our alledged kwh cost is about 14 cents. So in effect, my actual usage cost came to $2.66. Fees added another $37. Demand came to over $300 on an account that has never exceeded 1800kwh per month and this only happens for 2 months. The rest of the time. The account uses form 0 to 40 kwh. Why should anyone be charged on that one off, 15 minute time frame as opposed to a cost profile based on a longer assessment so it can go down in a more reasonable manner. It establishes in 15 minutes but takes almost 6 months to get down to half that cost. Costs born for overhead is one thing, but this feels like outright abusive charging as a result of a basic monopolistic mindset. I didn't post this to get a lecture on business economics. I posted this to see where else in the country this was happening to the extent its happening here.

It's an example of the way things work... business has no vote and that makes it an easy target to tax and charge... after all, many believe business is evil if it makes a profit...

I believe it will only get worse as time goes on... finding ways to increase revenue with the least controversy is a full time endeavor for many.

Local companies have gone to night shifts and off-peak usage to realize substantial savings... my uncles power utility has its lowest rate from 11 pm to 5 am and this is the time he heats his hot water for the day... it's almost 1/3 the cost of peak.

 

[Duffster]

The account used 19 kwh. You want me to be ok with being charged $346 for this? Our alledged kwh cost is about 14 cents. So in effect, my actual usage cost came to $2.66. Fees added another $37. Demand came to over $300 on an account that has never exceeded 1800kwh per month and this only happens for 2 months. The rest of the time. The account uses form 0 to 40 kwh. Why should anyone be charged on that one off, 15 minute time frame as opposed to a cost profile based on a longer assessment so it can go down in a more reasonable manner. It establishes in 15 minutes but takes almost 6 months to get down to half that cost. Costs born for overhead is one thing, but this feels like outright abusive charging as a result of a basic monopolistic mindset. I didn't post this to get a lecture on business economics. I posted this to see where else in the country this was happening to the extent its happening here.

I am sure you are free to generate your own if you wanted. just saying.

Here they will give you a discount if you can be taken offline at peak times and will give you even more discount if you have a generator that can be brought online at their discretion to help with peak demand.

 

[arrow]

Something doesn't sound right Arrow. Is this for a commercial/industrial account?

My last residential bill was $51.75 for 334 KWH without any demand metering.
Dave.

My sentiments exactly. When I called the utility to see if indeed it was a mistake, I was given the company line of why it wasn't a mistake. It is a commercial account that never exceeded 2000 kwh's in any month (utility criteria) so I do not know why they put a demand meter on an account that to the utilites description of who gets such meters, has no business being demand metered.

 

[arrow]

It's an example of the way things work... business has no vote and that makes it an easy target to tax and charge... after all, many believe business is evil if it makes a profit...

I believe it will only get worse as time goes on... finding ways to increase revenue with the least controversy is a full time endeavor for many.

Local companies have gone to night shifts and off-peak usage to realize substantial savings... my uncles power utility has its lowest rate from 11 pm to 5 am and this is the time he heats his hot water for the day... it's almost 1/3 the cost of peak.

Its getting like the phone company. They say they charge you a certain fee for the product, then a whole bunch of other stuff gets added on. I'm gonna charge you $500 for this brand new Lexus. Oh yeah , there is an additional charge of $42000 to cover fees and overhead. Come on!!! Just charge me the 35 cents or a buck or 2 bucks for the kilowatt. If you want to make more money, build a plant to cover the additional electrical or gas usage and pay for it with the extra revenue generated by the extra use and stop with this legislative crap that the utility has lobbied for in the first place. I was actually told by the talking head from the company, "Oh, its not us, we are dictated by the state to charge this amount"

 

[Gator6x4]

Its getting like the phone company. They say they charge you a certain fee for the product, then a whole bunch of other stuff gets added on. I'm gonna charge you $500 for this brand new Lexus. Oh yeah , there is an additional charge of $42000 to cover fees and overhead. Come on!!! Just charge me the 35 cents or a buck or 2 bucks for the kilowatt. If you want to make more money, build a plant to cover the additional electrical or gas usage and pay for it with the extra revenue generated by the extra use and stop with this legislative crap that the utility has lobbied for in the first place. I was actually told by the talking head from the company, "Oh, its not us, we are dictated by the state to charge this amount"

"Oh, its not us, we are dictated by the state to charge this amount"

You do live in the US don't you. To my knowledge the Federal Governement nor State Governments tell a business how much to charge for a product or service. They regulate some service to prevent such charges as you describe. I remember years ago when we had good telephone service from AT&T. AT&T was regulated. Everyone got to hollering as loud as they could, DE-REGULATE". An executive with AT&T made the statement well there goes good cheap and affordable telephone service and his comments in my opinion have become true. The purchasing public is being ripped every day by our good - good business people.

 

[arrow]

"Oh, its not us, we are dictated by the state to charge this amount"

You do live in the US don't you. To my knowledge the Federal Governement nor State Governments tell a business how much to charge for a product or service. .

Believe me when I tell you. I'll treat anyone with a fair and even hand until the b.s. starts to fly. This was the third person at this company I had spoken to as I simply got handed up when the questioning became too difficult. I certainly wasn't going to give this person a hard time until she gave me that line of absurdity where upon I afforded her "an education" . As for your second sentence, I don't think the government stipulates pricing. Now a days, they just take over the business with our money. As for your first sentence, I'd like to think so. That is all I'll say on the matter lest it become "political"