Utility Bill Audit

utility bill auditing

If you think that your energy company overcharged you on your bills, you are not alone. According to the Department of National Utilities Refund, an average of 79% of companies suffer overcharges and billing errors. One way to know for sure is to hire a utility bill auditor.

Energy Bill Audits

So what are energy bill audits? First of all, they are not to be confused with energy audits. An energy audit is an assessment carried out by professionals of your home or a company energy usage to help you identify opportunities to become more energy-efficient and lower your energy costs.

A utility or an energy bill audit is an analysis of your electric or natural gas invoice to identify any billing errors from your supplier. An energy bill audit can determine if you were overcharged by untangling the web of your many monthly charges and fees and help you make sense of them.

You should probably defer your utility bill auditing to hired professionals — unless you have vast knowledge and experience in the industry.

Monthly Utility Bill Audits

Monthly auditing is usually required by large enterprises that receive multiple complex utility bills every month, including electric, natural gas, water, waste, and telecom. The spending on utilities of large companies is enormous and that’s why monthly utility bill auditing is worth it – even small error corrections every now and then can generate huge savings.

One-Time Utility Bill Audits

A smaller company, such as a local family business will not need bill auditing each month – instead, you can contract an auditor as a one-time event, if you believe that you have been overcharged.

If the utility bill auditor uncovers any errors on your bill, your utility provider will likely either issue a refund or give you a credit toward future bills.

Energy Bill Auditors

Utility bill auditors are specialized professionals who have experience in identifying and handling billing issues for their clients. Though there is no official qualification required to become a billing auditor, the majority of reputable auditors will have completed a utility internal auditor course, in addition to a bachelor’s or master’s degree.

A good auditor can not only recover refunds from the past but also save you money in the future. Selecting the wrong one can be a costly mistake. Here are two things you should be looking for when selecting someone for an audit:

Experience – You don’t want a new and unexperienced contractor to be handling your utility billing. You should opt for a company that’s been around the block for a while. One way is to check if the audit company is a Better Business Bureau Accredited business and what their rating is.

Industry knowledge – Your auditor should have experience working or at least have had previous clients from your industry, to truly understand the details of your energy bill. Ask for testimonials and previous clients’ references and contact them. Find out how much savings and refunds they received by working with this auditor.

Typical Errors on Utility and Supply Statements

Energy billing is complicated – every invoice contains multiple line items, charges, and meter readings, resulting ina big error margin. Energy companies do not have the resources to double-check each monthly statement, so you bear the brunt of any overcharge.

Here are some common errors (hopefully later identified by utility bill audits) that result in the additional cost being added to your invoice:

  • Errors in the meter readings
  • Tariff Overcharges
  • Incorrect Rate Plan
  • Typing / Computer errors
  • Faulty equipment

Fees and Pricing

Bill auditors use one of three pricing structures for their service. These are fixed fee, hourly rate, and contingency.

Fixed Fee

A fixed fee is exactly what it sounds like. The auditor creates an estimate of all the time and expenses he foresees and provides you either with a specific price or a price not to be exceeded. The benefit of this option is that you know the cost upfront. The drawback is that you pay it whether the company brings you savings or not.

Hourly

The hourly fee of an auditor can be as high as $250 per hour. The challenge is that you have no way of verifying whether they spent all the hours they billed you for working on your case, so one way is to have them perform the audit on-site where you can monitor them at least somewhat.

Contingency

Contingency fees range from 50% of the savings to as low as 35% depending on your company’s size. The benefit is that the contractor gets paid only if they discover errors on your energy invoice which the utility company refunds. The downside is that you will have to part with 35 to 50% of the money you just earned back.

If you think that your utility bill contains errors, you shouldn’t just let it go. An energy bill audit can save you a lot of money and a piece of mind. Use our guide to select the right company and the right pricing structure.

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