Introduction
Utility bills are a routine expense for most businesses, but they can also conceal costly errors. In a recent email exchange with Peekwire, Dominic Ervin, President of Apex Utility Solutions, shared insights from his experience auditing commercial utility bills. He discussed why even businesses with expense management software can miss significant overcharges, which line items deserve closer scrutiny, and the steps owners should take when they suspect a billing error.
When a Review Uncovers What Was Missed
Ervin noted that problems often arise when companies depend solely on high-level utility expense management (UEM) software or general energy management firms. These services handle basic tasks like invoice processing and usage tracking, but they don't dig into the underlying tariff structure or verify that the account aligns with the site's actual operations.
"Software only checks whether a bill matches an existing profile. It doesn't audit the underlying tariff structure or physical site alignment," he said. He described a case where an owner was told their rate schedule was optimal, but a deeper audit revealed that their peak demand window had shifted after an equipment upgrade years earlier. As a result, they were paying peak ratchet charges every month on a schedule they no longer needed. "The generalists checked the math, but they missed the nuance in the regulatory tariffs, that's usually where five to six-figure recoveries hide," Ervin added.
Overlooked Charges on Commercial Bills
When asked what commonly goes unnoticed, Ervin pointed to franchise fees and gross receipts taxes. Most owners skip past these line items, assuming they are fixed government mandates. However, these charges are frequently misapplied. Utilities may default accounts to standard commercial brackets, missing exemptions for manufacturing, non-profits, or enterprise zones. Ervin also mentioned seeing city franchise fees charged to facilities outside municipal borders. "Because people rarely challenge a line item labeled as a tax, companies quietly overpay for years when they could actually claim significant refunds," he explained.
The Wrong Order of Operations
For business owners who suspect a bill is wrong, Ervin cautioned against immediately calling the utility or handing the issue to internal accounting. Utility representatives typically only check basic math, and internal staff may lack knowledge of regulatory tariffs. If the utility claims the bill is fine, the issue is often dropped.
Instead, Ervin recommended pulling one to two years of billing data first. "Have an expert review the numbers against the actual rate books, and let the expert approach utility once we have clear proof of an error," he advised. This approach ensures that any challenge is backed by solid evidence and increases the likelihood of a successful recovery.
Practical Takeaways
- Don't rely solely on software: UEM tools are useful for tracking, but they may not catch tariff misalignments or regulatory nuances.
- Scrutinize fees and taxes: Franchise fees and gross receipts taxes can be incorrectly applied; verify exemptions and municipal boundaries.
- Gather data before contacting the utility: Collect at least one to two years of billing history and have it reviewed by a tariff expert.
- Let the expert handle the utility: Once an error is proven, a professional can navigate the utility's processes more effectively.
For businesses looking to uncover hidden savings, a thorough utility bill audit can be a worthwhile investment. As Ervin's experience shows, the most significant recoveries often lie in the details that standard reviews overlook.