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I think the ratchet would be:

UtilityCost:Ratchet,
    NonCoincident_Demand,    !- Ratchet Variable Name
    SDGE_AL_TOU_S,           !-Tariff Name
    TotalDemand,              !-Baseline Source Variable
    TotalDemand,             !-Adjustment Source Variable
    Annual,                  !-Season From
    Annual,                 !-Season To
    0.50,                    !-Multiplier Value or Variable Name
    0;                       !-Offset Value or Variable Name

The rate says:

Non-Coincident Demand Charge: The Non-Coincident Demand Charge shall be based on the higher of the Maximum Monthly Demand or 50% of the Maximum Annual Demand.

So me this means that the demand during any time period would set the ratchet and so the baseline source variable would be the TotalDemand.

Also the Season To I think should be annual since the tariff does not say that it only applies to certain seasons of the year. The documentation in the InputOutputReference should help as well as looking at the values calculated in the tariff report and confirming that it works as expected.