LCEC: Robbing the Cape Blind

LCEC’s non demand rate is much like a residential bill in that...

it has only an energy charge for the electricity consumed during a billing period plus a customer charge to cover the meter reading and billing costs.

On the other hand... demand is measured to determine the amount of the utility’s equipment that is dedicated to serving a specific customer’s peak needs.

When a facility demands twenty or more kW of power at its time of peak use, it becomes a demand rate customer as opposed to a non demand customer.

As opposed to the energy charge being based on the ACTUAL amount of electricity consumed over the entire billing period…

the demand charge is related to the maximum demand for electricity that a customer COULD place on the utility’s system during the customer’s peak use.

This theoretical “demand” is calculated by the total electrical load of the equipment turned on at a facility during the highest fifteen minutes of use in a billing period.

A charge is assigned by LCEC to recover the investment in the under-used utility equipment.

At LCEC, the demand charges range from $6.99 to $12.07 per kW, depending on which of the demand rates is applicable.

The mechanism for insuring recovery of investment is demand ratchet and ratchet charges.

Ratchet charges require that billing demand (as compared to the actual demand) for any month will...

not be less than 70% of the peak demand set by the customer during the previous twelve months.

So, it only takes fifteen minutes to set a demand peak, and using a large amount of energy for fifteen minutes on any one day can affect your billing for the rest of the year.

As is normal, during new systems startup in June 2008, to test electrical capacity handling...

the Everest Water Reclamation plant separately loaded both sides of its “circuits” for several days.

To accommodate the Everest plant redesign, LCEC had provided a newer second service with two meters, in addition to the existing service with meter.

Bare in mind that the plant improvements were designed to (and actually did) DECREASE electrical demand through greater efficiency.

Thus, LCEC did NOT actually have to provide any additional capacity for the new plant design.

However, LCEC assessed the City of Cape Coral with a ratcheting charge for the atypical performance testing.

The Everest plant used 1500kw on each side during the test, but their average usage is only 700kw.

This generated a 70% of 1500kwh (1050 kwh) charge on each side for each month during a twelve month period.

Actual use was only 700kwh, resulting in a (1050 – 700 = 350kwh) 50% over charge on both meters for one year.

Worse yet, LCEC charged CCC, $6.99 per KW for demand on the new meters and $12.07 per KW on the older meters...

resulting in further excess cumulative demand charges for Q409 of $80,000.

If the service provided to the Everest plant was treated as a single bill by LCEC, the actual demand charge would have been $39,000 for the same period.

In other words, CCC is paying 100% more in demand charges for electricity that it NEVER has nor will consume.

This situation has resulted in an additional $10K per month being billed to CCC since June 2008.

Multiply $10K by 14 months you get $140K paid to LCEC by CCC for electricity NEVER USED.

The original intent of the demand charge was to compensate the utility for their investment in the size of service required for the maximum power use.

LCEC is a FOR PROFIT power distribution coop which still charges the city non demand charges for infrastructure...

that was put in to place thirty years ago and has long since been paid for many times over.

2008 Water, Sewer & Reclamation revenue totaled $55 million, while costs were $42 million...

that’s $13 million in profit being spent by the city fathers on bloated fire, police and other cost centers.

LCEC’s ratchet charge scam has resulted in the 2009 water reclamation operations budget running into the red.

To date, LCEC refuses to rectify the situation, hiding behind their co-op and “non producer” distribution only mandate.

Further, why is each CCC facility not extended a consolidated municipal rate for bulk or volume electricity usage citywide?

The City of Cape Coral is no longer a trailer located at the CC Pkwy & Del Prado intersection.

Isn’t it time that the CCC fathers seek legal redress for LCEC’s long time price goughing and also negotiate a blanket non demand rate for city wide operations.

After all, who is LCEC’s largest customer? Not the 52,000 individual Cape Coral customers...

but the City itself, who blindly misappropriates those very taxpayers monies to line the pockets of LCEC and it’s constituents.