What is a Utility Cost Reduction Audit? And why it’s important for your business

When most people think of a utility audit they think it means finding ways to reduce consumption of energy or water. And while that is certainly a worthwhile endeavor that is not what we mean when we are referring to a utility cost deduction audit.

So what is a utility audit?

A utility audit is where we apply our 100 years of combined utility expertise on our clients’ behalf to save them money. If we can find you savings, we share in them 50/50 each month. If we can’t save you money, it does not cost a thing.

Specifically, our utility auditors are looking for things like:

Electric/Natural Gas

• Billing errors/savings opportunities

  1. Key punch
  2. Meter reading
  3. Demand based
  4. Incorrect rate application
  5. Incorrect tax
  6. Multiplier/constant
  7. Incorrect implementation of contract
  8. Incorrect application of tariff
  9. Erroneous fees and taxes

Water/Sewer

• Billing Errors/Savings Opportunities

  1. Key punch
  2. Meter reading
  3. Multiplier/constant
  4. Incorrect application of surcharges
  5. Incorrect meter usage

Why is a utility audit is important for your business?

In our experience, 95% of organizations contain an invoice with at least one error or overcharge. These errors can be quite substantial. This can result in lost money each month that could go directly back into your bottom line.

Industry tariffs, codes, bills, and terminology are all written in industry jargon. This makes it almost impossible for anyone to be able to confidently determine what they are spending. Just have a look at one example of an electric tariff to see for yourself.  And calculating what your costs are supposed to be is no cinch either.  You can try your hand at utility industry math here (we’ve yet to have someone get this right).  

Simply put, if you care about the money you are spending each month then you should have your utility expenses audited by a professional.

Ok, so how is it done?

A utility audit is conducted by getting invoices for each location and a letter of authorization for each vendor. From there we conduct the following series of steps:

• We review all the invoices and associated contracts for accuracy and contract/tariff compliance
• We conduct a thorough market analysis of options, providers, and regulatory requirements and compliance.
• After 4-6 weeks we deliver our findings to the client for their approval.
• Once our findings are approved we implement the agreed savings measures.
• Only once savings begin hitting the client’s bottom line do we begin to share in the savings.
• We monitor the invoices every month for accuracy and overcharges, ensuring savings stay intact and remain in place.

Summary

Verifying the accuracy of these expenses is difficult and complex.  If you value the money you are spending in this category you should have it reviewed by industry professionals. 

If you are spending over $5,000/month on your utility bills you qualify for our audit service.  Having been in the auditing business since 1991 we’d love the opportunity to perform our risk- free/shared savings audit and see what we can do for you. 

If you are interested please reach out to us at info@costanalysts.com or give us a call at 1-877-843-7579.   

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