Is that contingency utility bill audit really free?

Whenever we work with clients, an energy bill audit is the first step in evaluating what they are currently doing.  We often find ourselves competing with contingency bill audit firms and have found that many end users do not understand the true cost associated with contingency bill audits where payment is based on a percentage of the “savings”.

The vast majority of “savings” deal with sales taxes billed to exempt accounts.  After sales taxes, utility or supplier billing errors are the next most common source of errors.  Typically, utility bill errors are associated with estimated meter reads, meter replacement, or changes in a utilities billing system.

There are often additional opportunities for savings that many bill audit firms miss entirely.  Oftentimes an account where usage has changed significantly may be eligible for a rate change.  This often requires a detailed review of historical billings, tariff rules and procedures, and data analysis.

Many end users don’t understand what they will pay  a contingency bill audit provider.  They may be quoted a percentage of the ‘savings” (often 40-50%) but the methodology may be vague.  In addition, savings can be described as avoided spend over a period of 2 to 5 years.  If there is a 5 or 6 figure sales tax recovery opportunity, the contingency bill audit will start to seem rather expensive.