TLC pointed out in the letter that there was an online calculator on their web site for checking your new kW load value or to see how it would change with different inputs (different meter readings). Unfortunately it seems they stuffed up rather badly in this respect because up until last evening (Monday 4th April) the online calculator was actually using the wrong formula - last year's version. I know this because I watched my brother enter his readings from the letter and get a much lower value than what was printed on the letter. Oops! Anyway, this seems to have been corrected by early today (5 April) even though there is nothing on the page (or anywhere else on TLC's site as far as I can see) to indicate there was any error to start with or that a correction has been made. Hmmm - can't say I like that way of doing things. So, if you happened to try to check earlier than today (5 April) you may have been wondering what was going on!
After discovering this discrepancy between letters and the online calculator I did some checking of my own and initially created a spreadsheet that duplicated the 2010 formula just to work out what was going on. Then I got a bit carried away and expanded that to include the different formulae used over the last three years. You can download it here if you want to play with it but please note you do this at your own risk. I make no promises whatsoever about its accuracy or correctness or suitability for anything you may try to do with it. Also, note that the 2011 version of the formula used in the first version of the spreadsheet was only something I "reverse engineered" from a sample of results generated from the updated online calculator earlier today - TLC had not published the precise details of that formula when I looked. Still, I'm confident I got it right and all the results agreed with the online calculator - at least the last time I used it!
[6 April update: TLC published the 2011 formula around the same time I was writing the first version of this post, so I've now updated my spreadsheet to use the official version. My reverse engineered formula produced practically identical output but was nevertheless very slightly different. The graph below has also been updated but the only visible change should be the different colours. Red is now 2011 to make it stand out a bit more.]
When you look at the graph below (this and others are generated by the spreadsheet) you can see the latest version of the formula generates significantly higher kW load estimates for the lower end of the scale (as compared to the 2010 formula) but somewhat lower estimates at the other end. The cross-over appears to be at about 2.39 kW of peak load which (coincidentally?) happens to be quite close to what TLC have previously indicated is an average domestic installation's three hour peak load. Anyway, the changes from last year's version mean that even if your average daily consumption over the winter of 2010 was identical to that in the winter of 2009, then the new formula would generally produce a quite different kW load estimate, sometimes higher and sometimes lower, and therefore also changing the amount TLC are asking you to pay. The only situation where your payment for "kW load" wouldn't change would be if you happened to fall pretty much right on the pivot point.
The pivot (cross-over) point corresponds to a 92 day uncontrolled consumption of 1600 kWh (or "units") which in turn is about 17.4 kWh (uncontrolled) per day on average. (If you're wondering where that reference to 92 days come from, it's because the formulae seem to have always been constructed with a 92 day uncontrolled usage value as the main "input" and I'm guessing that is because there are 92 days from the start of June to the end of August).
Remember however that this is also all "uncontrolled consumption", so if your home has a ripple control then it actually corresponds to somewhat higher total daily consumption than that. This is because of an earlier factor that is applied to total consumption readings from "mixed" and "limited off peak" meters in an attempt to make an allowance for power used for water heating and other controllable load (because the main formula always expects only uncontrollable load as input).
This is probably clearer if you look at the working for the lead-up to the final formula calculation in the spreadsheet. You will see that 76% of consumption from mixed meters is deemed to be "uncontrolled" (maybe "uncontrollable" is a better word) in the northern areas, 65% in the southern areas, and a fixed 55% is applied to all "limited off peak" meter readings. Yeah, yeah, I know.... too much information! Actually, I must admit never quite got to the bottom of exactly how these percentages were obtained/derived by TLC but I get the general idea. The most simple case is when you have no ripple control receiver and then 100% of your consumption is obviously "uncontrolled" (and also "uncontrollable")!
How do you read this? Well, let's say your "92 day uncontrolled consumption" was about 500 kWh (which is pretty low, but this is just for an example). Looking up from that value on the x-axis (lower left) we first get to the yellow line for the 2009 formula showing that would have estimated your three hour demand as about 0.9 kW. Going up a bit further, the dark blue line shows the 2010 formula says about 1.0 kW. Finally the latest formula for 2011 looks like about 1.4 kW. (Actually I just cheated and checked my spreadsheet so I know the precise values are 0.88 kW, 1.00 kW, and 1.37 kW respectively.)