Which Maryland rule is this hypothetical calculation using?
This example selects an invented hotel account under SMECO’s General Service Medium schedule. There is no client, meter record, equipment project, or invoice. Assume the utility has verified the account’s classification and that the quoted determinants apply to it. SMECO Schedule GSM, effective August 1, 2026 and reviewed October 12, 2026, states availability for the specified commercial and industrial loads with peak demand at least 25 kW but below 50 kW, subject to its rules.
The same dated schedule establishes billing demand as the greater of current highest 15-minute integrated demand and 50% of the highest such demand in the preceding eleven months, with a minimum of 50% of contracted maximum kilowatt capacity. Power-factor provisions require separate attention. The example assumes no power-factor adjustment and keeps the account’s classification unchanged solely for the modeled period.
A demand-ratchet floor preserves part of a specified historical measured peak as a minimum billing determinant. The bills hub explains how measured kW and purchased kWh differ. This selected SMECO formula is not a statewide rule or proof that another Maryland hotel’s tariff contains the same floor.
Which customer values are assumed?
Assume the highest measured demand in the preceding eleven months is 48 kW, current measured demand is 30 kW, and contracted capacity is 40 kW. Those are invented account inputs. Half the historical peak is 24 kW, and half the contracted capacity is 20 kW. With no power-factor adjustment, billing demand is the greatest of 30, 24, and 20: therefore 30 kW.
The dated GSM schedule lists a distribution-demand component of $1.32 per kW. Unlike the customer inputs, that number comes from the cited tariff effective August 1, 2026. This example uses only that component, not a live supplier offer or the entire tariff. Riders, facilities charges, energy, taxes, Standard Offer Service or supplier charges, and other items are excluded.
Baseline distribution demand is 30 kW × $1.32 per kW = $39.60 for the modeled billing month. Keep that narrow boundary visible. A relatively small isolated distribution component should not be confused with total demand cost or used to decide a capital project without the rest of the actual bill and operating requirements.
How does a current-peak reduction change billing demand?
Scenario A assumes an approved operating change lowers the current measured peak from 30 to 18 kW, while historical and contracted values remain unchanged. Billing demand is now the greatest of 18, 24, and 20: 24 kW. The isolated distribution component is 24 × $1.32 = $31.68. Its difference from baseline is $7.92.
Measured peak has fallen by 12 kW, but billing demand has fallen by only 6 kW. Multiplying 12 × $1.32 would incorrectly produce $15.84 for this component. The historical floor prevents half that assumed billing change. The operating change may also affect energy or other components, but those effects need separate evidence and tariff calculations.
| Hypothetical case | Current measured peak | Highest preceding-eleven-month peak | Contracted capacity | Billing demand |
|---|---|---|---|---|
| Baseline | 30 kW | 48 kW | 40 kW | 30 kW |
| A: Current peak reduced | 18 kW | 48 kW | 40 kW | 24 kW |
| B: Lower historical peak | 18 kW | 36 kW | 40 kW | 20 kW |
| C: Approved lower contract capacity | 18 kW | 36 kW | 20 kW | 18 kW |
Each row is a separate assumed customer state. The table does not show a documented project or establish permission to reduce contract capacity. It simply evaluates the sourced rule against transparent inputs.
What happens when a different floor controls?
Scenario B assumes the highest measured demand remaining in the preceding-eleven-month window is 36 kW. Its historical floor is 18 kW, matching the assumed current peak. Contracted capacity remains 40 kW, so its 20 kW floor controls. Billing demand becomes 20 kW and distribution demand costs $26.40. Lower historical demand alone has not brought billing demand all the way to 18.
Scenario C assumes the utility has separately approved a contracted capacity of 20 kW for the relevant date. Its floor becomes 10 kW. With current demand 18 and historical floor 18, billing demand is 18 kW, costing $23.76. That is $15.84 below baseline for the isolated component. The approval and effective date are essential assumptions, not consequences of the spreadsheet.
SMECO’s commercial-bill explanation distinguishes the demand calculations appearing on its commercial bills. Use the actual bill fields and underlying measurements to determine which floor controls. Do not assume the displayed billed determinant is identical to the current metered peak.
How should the eleven-month history be maintained?
Keep a rolling table of measured demand by billing month. For each current period, select the highest measured value in the preceding eleven months and calculate its 50% floor. Do not put a ratchet-derived billed demand back into the history as though the meter measured it. The selected GSM rule refers to the highest integrated measured demand, not a recursively generated billing floor.
For illustration, suppose the assumed 48 kW event occurred in billing month zero and no later measured peak exceeds 36 kW. In a period whose preceding-eleven-month window still includes month zero, the 24 kW floor remains relevant. Once that event leaves the applicable window, the highest remaining assumed value is 36, giving an 18 kW floor. Actual billing periods and subsequent measurements determine the timing.
Do not describe the change as immediate after a control project. A new 48 kW event could preserve the higher floor in a later window. A reviewer needs the actual dated series, not only the largest historical value. Note meter replacements, corrections, estimated data, and any utility adjustment that affects which records are used.
How do power factor and classification affect the boundary?
The dated GSM schedule contains a power-factor adjustment when its stated conditions apply. The example assumes that adjustment is absent, so its simple maximum calculation is not a complete formula for every account. If a real bill includes corrected demand, obtain the actual factor and rule before reconciling the determinant. Do not explain the entire difference as a ratchet when another adjustment controls.
Likewise, a persistent demand change can raise a classification question. This illustration keeps the existing classification solely to isolate the floor calculation. Ask the utility about the actual account’s classification and any governing transition process. A manager should not select a different schedule in a budget model without establishing eligibility and the effective treatment.
DOE’s utility-rate evaluation guidance supports comparing the actual load with the rate structure. When assessing a project, calculate every relevant component separately and retain both before-and-after demand records. The selected distribution-demand line is only one part of that review.
What operating and purchasing decision follows from the scenarios?
The three alternate rows distinguish current operation, historical exposure, and service-contract capacity. Management can investigate an operating trial while also reviewing the old peak and contract arrangement. These are different actions with different evidence and timing. None should be assigned a result before implementation and provider confirmation.
DOE’s energy information system guidance describes tracking and investigation capabilities. Pair interval records with approved schedules, equipment faults, and operating notes. A shift in laundry or water heating may change coincidence, but technical, sanitation, comfort, and staffing requirements still constrain the plan.
For any supply comparison alongside the tariff review, disclose embedded or separate broker compensation and count it once. The utility distribution component calculated here contains no modeled brokerage fee. A real supply offer may also treat demand-related items separately, so price coverage must be reconciled before combining the two worksheets.
What should be checked before accepting the worksheet?
- Confirm actual SMECO classification and current governing tariff sheets.
- Obtain current and preceding-eleven-month measured demand with dates.
- Verify contracted capacity and any power-factor adjustment.
- Calculate all applicable floors and select the controlling determinant.
- Apply only the correct component price and identify omitted charges.
- Verify approved changes, their effective dates, and the subsequent invoice.
The Texas 4CP example uses system-peak coincidence, while the Pennsylvania charging example tests a simplified current-month maximum. The Connecticut laundry example examines schedule feasibility. None supplies a replacement formula for this selected SMECO ratchet.