If you are anything like the typical business owner, you pay your utility bills like clockwork, no questions asked. The invoices arrive in the mail, you pay them, generally by the due date.
But you shouldn’t, at least not without checking them for errors, according to commercial watchdog companies hired by businesses to root out such mistakes.
These companies maintain that they discover mistakes in four out of five clients’ utility bills. One says it uncovered errors in a New York college’s phone bills totaling $400,000. And another reports it helped a South Carolina laundry discover overpayments of $3,200 for electricity.
Of course, homeowners are not likely to find gaffes as large as these, which is why the auditors rarely take on residential clients. Because they work on a contingency basis, they can’t make enough money for the time they would spend reviewing your bills.
But you can go over your bills yourself. Sure, it takes some patience, but the result could pay dividends, month after month after month, 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.”
The principles of auditing utility bills are the same for a big commercial customer or a single resident. Start by making sure you are being charged the least expensive rate possible. Utilities do not automatically bill everyone at the lowest rate, so it is your responsibility to request it.
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 whether you qualify for special energy-saver programs. Even if the company has just 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.
Unlike errors in commercial accounts, which can be hidden in pages of invoices, mistakes in residential accounts are often easy to spot, especially if your bills have been fairly consistent.
Simply make side-by-side comparisons of several months of charges, or at least look back into your checkbook to compare the total amounts you paid 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.
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.
Still, if someone seems to be giving you the runaround, take your request up the supervisory ladder until you are satisfied.
“You may end up talking to several people before you get results, so you have to be persistent,” Mann says. “Part of the game is sticking to your guns.”
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, 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.
Telephone companies are notorious among utility auditors for overcharging 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 cell phones, you might be paying for a landline service you no longer need, the auditor says. And sometimes they are paying a monthly long-distance fee though they don’t have a long-distance carrier.
If you still use your landline for long distance, you could be the victim of “rate creep.” The rate you received may have been attractive when you signed up five years ago, but it could be much higher now–certainly higher than you realize, especially if you don’t pay attention to those little notices that utilities love to stick in their bills.
So make sure the rate you were quoted originally–say 5 cents a minute–is not now 20 or 25 cents.
“Services offered today are vastly different from those offered even two years ago,” says Mann.
Another frequently overlooked, but recurring, fee is the one for line maintenance. It’s basically insurance in case something happens to the wiring in your walls. But it is a “poor investment” that should be canceled, says Mann.
Insurance to cover a lost cell phone isn’t a good investment, either. At least not after the first year, according to Mann, who adds, “After that, people generally upgrade to a new phone anyway.”
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You may write to Lew Sichelman c/o Chicago Tribune, Real Estate, 435 N. Michigan Ave., 4th floor, Chicago, IL 60611. Or e-mail him at realestate@tribune.com. Sorry, he cannot make personal replies. Answers will be supplied only through the newspaper.
