Typical business owners pay their utility bills like clockwork, no questions asked. But they shouldn’t, at least not without first checking them for errors, according to commercial watchdog companies hired by businesses to root out billing mistakes and incorrect rates.
These companies say they discover mistakes in four out of every five clients’ utility bills. One said it uncovered errors in a New York college’s phone bills totaling $400,000. And another reported it helped a South Carolina laundry discover overpayments of $3,200 on its electric bill.
Of course, homeowners are not likely to find gaffes as large as these on their own bills, which is why the auditors rarely take on residential clients. They simply can’t make enough money for the time they would spend reviewing your bills.
But you can go over your own bills. Sure, it takes some patience, but the result could pay off, according to Steve Mann, president of Utilities Reduction Specialists in Clemmons, N.C.
“You have the right to check your utility bills, and you should,” Mann says. “Errors may be smaller, but they occur just as often. Frequently, it’s just human error. But if the mistakes go undetected, they mount up and get bigger and bigger.”
Start by making sure you are being charged the least expensive rate possible.
The ease or difficulty of this step depends on your utilities’ rate structures. Fortunately, while most power and water companies have hundreds of tariff calculations for businesses, they usually don’t have more than a few for residences.
While you’re at it, check to see if you qualify for any special energy-saver programs. Even if the company has only one residential rate, it might offer a discount if you install special energy-saving equipment or if you allow your systems to be cut back during peak heating and cooling periods.
Mistakes in residential accounts are often easy to spot, especially if your bills have been fairly consistent. To find them, simply make side-by-side comparisons of several months’ charges, or at least look back into your checkbook to compare the total amounts you paid for the last few months.
Even if nothing strikes you as irregular, check every bill for mathematical slips. These kinds of errors are fairly common, audit specialists say. Sometimes, it’s nothing more than a misplaced decimal point, so do the math yourself.
If you think your bill is out of line, ask for an explanation. Most utility companies are easy to work with. “They want their customer bills to be correct and will go to extremes to satisfy clients who find discrepancies,” says Mann, the North Carolina auditor.
An error could be as simple as a misread meter, or perhaps a malfunctioning one. The meter could be sticking, for example. Or it could be incorrectly calibrated. And sometimes your bill could be based on an estimated reading or every once in a while, on your neighbor’s meter.
Water meters are most likely to be defective, and water bills are the most frequently estimated. Often, water bills are estimated, month after month, because no one is home when the meter reader comes by. And sewer charges usually are based on water usage.
Phone companies are notorious among utility auditors for overcharging their business customers, and they often do the same to residential clients. Moreover, their billing systems are far and away the most complicated, so their errors are the most difficult to spot.
At the same time, your phone bill is likely to yield the greatest savings. First, check the add-on charges. “Half the cost of many local telephone bills are regulatory fees, which are sometimes applied incorrectly,” Mann says.
If you are part of the growing legion of people who make all their long-distance calls on cellphones, you might be paying for a land-line service you no longer need. Many people are paying for long-distance service they don’t use, the utility-bill auditor says. If you still use your land line for long distance, you could be the victim of “rate creep.” The rate you received may have been attractive when you signed up with your carrier five years ago, but it could be much higher now.