Is Your Association Wilting from High Utility Bills? then AUDIT them!

It's mid-June in Houston and the thermometers here already have heatstroke (just wait until August!) But enough waxing poetic about our weather woes here in the Bayou City, what I wanted to shed some light on during these overheated times is this: a Community Association needs to be wary of overcharging on their utility bills especially during times of high usage (like the summer months).

Utility companies routinely overcharge their clients, whether by accident, oversight, or policy. Utility bills and ratings can be complex. These bills are composed of meter readings, rate charges, usage adjustments, and other variable and hidden factors unknown to the client. Errors can be hard to detect on a utility bill, and thus, the opportunity for a Community Association (or any client) to recoup any of these charges diminishes over time. Sometimes there may not be anything wrong with the charges per se, but you're just paying a higher rate (even if you're qualified to pay at a lower one!)

So how can a Community Association locate and eliminate these utility billing errors? Hire a Utility Auditor ("Auditor") (or see if your Property Management Firm can perform audits as well.) Auditors can dissect your utility bills down to their base elements and review each item for correctness. Then the Auditor can "reconstruct" the bill and determine if the client is paying too much based on component-level billing, versus the all-in-one pricing that most of us see on the "amount owed" line each month.

But is there a downside to using an Auditor? Yes and No. You will have to PAY for this service in most cases. The standard fee for a utility auditor can approach or exceed 50% of prior overcharges collected on behalf of the client. Seems kind of steep right? Not really. Any monies recovered on the strength of that utility audit are a bonus of sorts for the client since the client didn't know that it was overpaying in the first place. Plus, the audit bestows future benefit upon the client because now all subsequent bills will issue at the correct rate, thus resulting in continued savings for the Community Association.

*thanks to Insider's Guide to Managing Community Associations for excerpts relating to this article