Wednesday, August 1, 2012

Myths and Facts About Third Party Utility Billing

What Is third-party utility billing, and why do apartment communities partner with Conservice for utility billing?
There are a lot of complaints about third-party billing companies floating around the internet. Unhappy residents believe that certain billing practices are illegal. From service fees to high bills, something must be wrong with companies that ask residents to pay for their water, right?

For many years, utilities like water, sewer and trash have been included in the rent for residents across the U.S. Sometimes even gas and electricity have been included, or the apartment owner would bill a flat rate for these utilities on top of the monthly rent amount. Utility expenses continued to rise, causing property owners to raise rent prices. Conservation efforts were impossible and high rent prices had the potential to drive residents away. Third-Party Utility Billing came into the picture, and now property owners had another option. They could stabilize rents, promote conservation, and recover their water expenses.

Here’s how it works:
The billing company obtains the water bill for the apartment community. They deduct any common area expenses, and then divide the expense up by the residents, usually based on the number of occupants in the apartment, or another similar method. The apartment community can instead choose to install sub-meters in the apartment homes, and then the billing company can use the data from the meters to bill each resident for his or her exact utility usage.

Just as any billing company works, it costs money to generate a bill and operate a customer service center, so a service fee is often used to offset that cost. All other money generated is returned to the apartment community to help pay for their utility expenses.

It sounds simple enough, but looking at sites like and, it is obvious many people tend to have a gripe with pretty much any 3rd party billing company. So let’s dispel a couple myths, at least as they relate to Conservice.

Third party billing is illegal.
Quite the contrary – third party billing is a completely legal way for multifamily owners, HOAs, campus apartments, etc, to recapture utility expenses. Our legal team is very experienced with all the local regulations, and each time we set up an apartment community on our billing program, the team goes to great lengths to ensure all billing practices meet the requirements for that city and state. Any time there is a legal dispute, our legal team reviews the dispute, reviews the regulations, and does everything possible to resolve the issue with the disputing party.

Something must be wrong with my bill since it’s more expensive than my bill at my old apartment or home.
Utility bills are different depending on the rate of the local utility provider, your billing method, usage, etc. Comparing your utility bill at one apartment community to your utility bill at another is sometimes like comparing apples to oranges. By looking at your bill or calling your billing company, you can get more information and better understand your billing method.

I am being charged a service fee – what a scam!
The majority of service providers charge a service fee to cover the cost of calculating each bill, mailing it, operating a call center, staffing employees, etc. This is a legal practice.

My bill went up…Conservice is stealing my money.
If your bill went up, it’s because the cost of water increased or more water was used. Conservice reimburses your apartment community for all the utility costs it collects.

If something is wrong with my meter, Conservice should fix it, right?
Many residents believe Conservice owns the sub-meters in their apartment homes. This is not the case. Rather, the management company owns the meters in each apartment home. Conservice cannot repair the sub-meters until the management company approves the repair and associated costs. Conservice notifies management about meters in need of repair on a regular basis. Conservice follows all local and state regulations regarding meter estimations. When Conservice has approval to repair sub-meters, we send a technician as soon as possible.