Find Us

5 Headquarters

4545 Fuller Dr. Suite 412
Irving, TX 75038
Phone: (972) 445-9584
Toll Free: (855) 275-3483
Fax: (855) 329-3493 
email5@energyby5.com

5 - Northeast

865 State Route 33
Ste 3 PMB 1077
Freehold, NJ 07728
Phone: (732) 774-0005
Fax: (855) 329-3483
email5@energyby5.com

5 - Mexico

CP 11000, Miguel Hidalgo
CDMX, Mexico
Phone: +5595287982
mexico@energyby5.com

LEARN

Category: Clients Case Studies Procurement

Spotlight - Utility Rate Negotiation for Large Data Center

June 20, 2016

Written By: Luthin Associates

large data center

A large data center purchased and renovated a building. They planned on expanding the facility in the future and asked the utility to provide an electric service capable of supplying 6 MW. The utility ruled that the electric service request was “excess” since the facility’s current requirements were less than 2 MW. The cost of the “excess” service would be almost $6 million. The utility suggested that the customer should apply for a special rate that would allow them to pay the additional costs over time. The customer was unaware that the total cost over the 20-year life cycle would exceed $20 million. Also, the utility did not bill the customer correctly and delayed the billing for two years.

When the client approached Luthin Associates with the delayed, and incorrectly calculated utility bills, the Luthin team identified several issues. The issues included the utility's application of the tariff provisions, the misleading communications with the customer when they applied for service, and the method used to calculate the cost of constructing the "excess" facilities.

The utility agreed to revise the construction costs and canceled the long-term agreement. Thus, the initial $20 million contract spend was reduced to $3 million, which resulted in $17 million of avoided costs.

Other Recent Posts

Featured Image
2 min read

Why the Name 5

By 5
May 15, 2025

We spend most of our lives in classes, sports and jobs that reinforce the need to look good and to be right, often at the expense of others. Many of our relationships become a zero-sum game; for me to... READ MORE >
Featured Image
7 min read

Actions to Take Today: Navigating Volatility in U.S. Energy Markets

By 5
May 9, 2025

From tariffs and recession risks to renewables and rising demand, this article outlines actionable procurement strategies tailored to today’s evolving energy landscape. READ MORE >
Featured Image
4 min read

What a 5X Increase in PJM Capacity Costs Means For Your Electric Bill

By 5
April 28, 2025

Capacity costs in the PJM Interconnection cleared at unprecedented levels in the latest auction. As shown below in Figure 1, the cost of capacity increased in many parts of PJM by 5x. While this chart... READ MORE >