The Trend – Increasing Utility Costs!
All utilities… water, sewer, gas, electric, telephone and trash, continue to increase in costs each year. Utility expenses are generally now one of the top three annual budget items for most communities.
The reduction of common-area utility bills seem to be one area where many boards feel confused or powerless, delegate this responsibility to others or attempt to reduce these costs by energy management.
Managing operational costs while maintaining community satisfaction is a constant balancing act. Among the largest recurring expenses for HOAs are utility costs—water, electricity, gas, and waste services—which often make up a significant portion of the association’s annual budget. Yet, many associations overlook one critical tool that can help control these expenses: regular utility audits.
In this article, we will explore why an onsite inspection should be a part of every utility audit!
What is a Utility Audit?
A utility audit is a thorough review of a community’s water, sewer, gas, electric, telephone and trash utility bills. The goal is to verify billing accuracy and ensure the community is being charged correctly for all of its common-area utility expenses.
A utility audit should uncover past utility billing errors and correct those billing errors, while obtaining refunds from the utility providers for those utility billing mistakes.
A utility audit should also determine if each utility account is being billed on the least expensive utility rate available, so that future utility costs are minimized.
Conservation and energy management is typically the first way organizations respond to utility cost increases. Strategies such as installing energy-efficient or solar equipment, retrofitting lighting, replacing landscaping with artificial turf or drought tolerant landscaping or sub metering can help lower the cost of utility charges — at least in the short term.
The problem with such conservation and energy management techniques is that they only reduce utility consumption. This means that if the utility raises its rates, your energy costs will still increase, even though you’re using LESS electricity, gas, or water!
Compared with conservation or energy management efforts, utility auditing can result in greater energy cost savings that will continue regardless of the utility consumption or any future rate increases.
An in-depth utility audit — which includes a meticulous review of your utility bills and an onsite inspection of your property — reveals errors in billing, wrong-rate charges, incorrect service charges, and other overcharges that present the opportunity for a refund for past utility billing mistakes, and reducing future utility charges
Utility Audits Can Reduce Your Per Unit Utility Cost
A utility audit reduces the per unit utility cost, whereas sub metering, new equipment, rebate programs and energy management/audit services only reduce the number of units used. Therefore, utility auditing is completely different from energy auditing and much more effective at reducing the annual utility cost with no out-of-pocket expenses or changes in equipment or equipment hours or use patterns!
Utility audits should be performed by third-party specialists who are trained to spot errors and inefficiencies that may go unnoticed by even the most diligent managers, homeowners or board members.
Another reason that a utility audit should be performed by third-party specialists is that they can uncover utility billing UNDERCHARGES without alerting the utility company – and alert you instead!
Why Onsite Inspections Should Be Part Of Every Utility Audit
If you do a quick Internet search for “utility audit,” dozens of results will immediately appear, listing companies that offer the service. Look a bit closer at these listings, and you’ll notice that almost all these companies do “utility bill auditing.” This means the company will review your utility bills to find utility billing errors, and may recommend less expensive rate plans.
A utility bill audit may be able to spot an error and gain your organization a one-time refund — but it’s an incomplete audit!
Why? Looking at utility bills only provides partial information about your property’s utility usage and what you’re meters are actually servicing. To get the entire picture, an onsite utility inspection of your association’s common area can reveal what the utility bills miss. In fact, the onsite property inspection is where most utility errors are discovered!
Often-missed utility errors
An onsite utility inspection may find many different types of errors, such as these:
- Your community is being billed for meters or street lights not located on your property.
- Your community is paying for meters that are not their financial responsibility. (I.e. model homes, master association areas, sub association areas, shared slopes, etc.)
- Utility billing rate codes incorrectly applied (I.e. Is gas for water heating, space heating, fireplaces or cooking or any combination thereof – there are codes for each specific combination and only an onsite can verity what combination is actually correct for your property – and verify that the utility billing code on your bills is correct!)
- Are you paying sewer service charges for water NOT entering the city sewer system? (I.e. an onsite will note slope and landscaping square footage, pools, spas, water features, cooling towers, boilers and any other areas where water is being used – but not returned to the sewer system)
- Your utility provider is applying incorrect rates. (I.e. billed as a single family residential client instead of multi-family or commercial client, which depends on what each meter services)
- You’re being billed incorrectly for onsite utility services. (I.e. billed for 4” water meter instead of 2” water meter, billed for an electric meter multiplier of 2.0 instead of 0.2, which is stamped on the plate of the actual meter, LED street light lamps or high pressure sodium vapor street light lamps, etc.)
More Money From Onsite Utility Audits!
An onsite audit is part of Pacific Utility Audit’s unique services. This comprehensive audit involves conducting a thorough inspection of our client’s property and facilities to verify every utility meter, trash bin, and street light on the property. This detailed verification process, coupled with a review of your utility bills and rate schedules, has saved our clients thousands of dollars in refunds and rate reductions.
In fact, we have conducted utility audit for clients that had completed prior utility bill audits with no onsite inspection and IN MOST CASES we find many additional opportunities for refunds and future utility bill savings that were missed because no onsite inspection of the property was conducted!
There are many utility bill auditing companies that only look over your utility invoices, but. Pacific Utility Audit takes it a step further.
As the only utility auditing company on the West Coast that conducts onsite inspections, we are far more likely to discover a lot more in utility refunds AND future utility savings for your association!