Wednesday, May 1, 2013

The Truth About Utility Bills

Last summer I posted an article titled "Myths and Facts about Third Party Utility Billing" on the blog. I wrote the article after I noticed a lot of misinformation about Conservice and other billing companies being posted on the internet. The article has had more views that any other article on the blog.

To supplement the article, I thought it would be a good idea to address a few more concerns residents have about receiving a utility bill from Conservice, especially if residents are being billed based on the number of occupants or the square footage in the apartment, and not the exact utility usage in the apartment.

RUBS, standing for ratio utility billing, means a utility bill is divided among residents based on the square footage of the apartment, the number of occupants living in the apartment, or another similar factor. Residents may wonder why they are billed this way as opposed to having a meter installed in their apartment.

There are a few reasons for this. An apartment community may not have the infrastructure in place to install sub-meters. The plumbing or electrical system may not allow for a sub-metering system. Existing sub-meters may be outdated or may no longer being functional. The next best alternative is a RUBS method.

For water and sewer, billing based on the number of residents makes sense because each additional resident uses an additional amount of water. For utilities such as gas and electricity that are used for heating and cooling, it makes more sense to bill based on square footage, since a larger home typically uses more heating or cooling than a smaller home. Some management companies choose to bill residents based on both square footage and the number of occupants in the home.

Yes, it's easier for residents to take control of their utility bill if they are being metered for their usage. However, educating residents on conservation can also drive overall costs down, especially when they are receiving a utility bill. If everyone conserves, the total water expense will go down. This in turn will decrease the individual utility expense for all residents. Many apartment communities have found success in RUBS billing programs.
Residents being billed based on the RUBS methodology need to report leaks to management right away, find ways to conserve, and avoid wasteful practices. By doing this, utility usage can decrease.

What are base fees?
If a resident is being sub-metered for his utilities, he may still notice a base fee on his bill. This is a flat fee that typically stays the same from month to month, only increasing or decreasing when the utility provider's rate structure changes. Most utility providers charge a flat base fee to their customers for the availability of that utility. For example, ABC Utilities may charge a base fee of $500 for the availability of water to ABC Apartment Community. This charge pays for the cost the utility provider or city incurs to provide water, not for the water itself. If there are 100 apartments at ABC Community, the per resident base fee would be $5.00 ($500/$100=$5).

RUBS base fees?
In some areas, including Texas, base fees must be billed separately, even if the residents are not being metered for their individual usage. The base fee on the bill is not included in the RUBS calculation. This results in a RUBS billing charge and a base fee charge.

Does Conservice benefit when the utility charges on my bill increase?
No. If Conservice collects payments from residents, this is being done as a courtesy to the management company. Conservice returns all utility payments to the property owner. Many management companies collect Conservice bills on site.

 At Conservice, we like it when residents can find ways to save money on their utility bills.

It's important for residents to remember that Conservice is a service provider - not a utility provider. We're working with apartment communities and management companies to help them manage their utility expenses.

Our goal is to help communities reduce utility consumption and recapture lost utility expenses while providing great customer service to those receiving a utility bill.

Conservice operates a live, in-house call center with extended business hours: Monday to Friday, 6 a.m. to 8 p.m. Mountain Time.

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