The Financial Implications of Inaccurate Billing
Utility billing errors might seem like a minor inconvenience, but for many companies, these inaccuracies can result in significant financial losses. Inaccurate utility billing data can lead to additional costs for customers ranging from 5% to 15% annually.
Why You Shouldn’t Overlook Your Utility Bills
Numerous companies, especially those involved in production or manufacturing, often find themselves billed based on inaccurate utility data. This could be due to mistakes in reported consumption or flawed estimates provided by utility companies. And if corrections are made, they tend to arrive months after the initial inaccuracies.
Unfortunately, billing errors have plagued utility customers for a long time. Such long-standing billing issues are why we, at 360 Energy, always stress the importance of regularly scrutinizing your utility bills. Operating without precise and up-to-date utility data is akin to navigating a plane in dense fog.
One of our 360 Energy clients recently found out just how costly utility billing errors can be.
A Case Study with a 360 Energy Customer
When reviewing our clients’ monthly utility invoices, we noticed the repeated “zero” consumption readings on their natural gas bill. We immediately raised the issue to our client and contacted the utility. Despite the impossibility of the readings, the utility insisted they were correct. Upon our review, we identified the culprit: a malfunctioning meter.
Acting on Our Client’s Behalf:
Instead of leaving our client to navigate the complications of utility negotiations alone, 360 Energy took immediate charge. We not only brought the discrepancy to the client’s attention within the first month of it happening but also stood as a dedicated liaison between the client and the utility company.
360 Energy intervened numerous times, pressing the utility company to replace the faulty meter — a process that took several months. During this period, our client continued to receive bills with incorrect readings, estimates, and reversals.
The utility’s delay in taking corrective action even forced the customer to take the unprecedented step of carrying their entire gas variance from one contract year into the next.
Data Correction and Unforeseen Consequences:
Once the faulty meter was replaced early in 2023, reliable data was finally available. Unfortunately, the utility company had one more unpleasant surprise in store for our client.
Over the several months of faulty billing data, the utility customer had proactively managed their energy consumption as best they could. Once accurate data was finally presented, the customer learned they had consumed significantly less gas than the volumes they had procured.
Normally, a large positive variance indicates effective energy management. In this case, a large positive variance worked to the disadvantage of the customer.
The utility company that provided faulty data also requires their customers to eliminate any consumption variances at the end of the contract term. If the utility customer has not procured enough gas for the volumes they have consumed, they must purchase additional gas to meet the shortfall. Similarly, if the customer has used less gas than they committed to buy – in other words, if they have a positive variance – then they must sell that unused excess and do so within a short time frame and with additional fees.
The Financial Impact:
The problem for this particular customer was that they had procured natural gas during a time when prices were high. By the time the customer was able to finally learn they had a positive variance to address, prices had dropped and the customer was forced to sell their surplus gas at much lower 2023 market prices.
Had the consuming company known earlier they had a positive variance, with accurate reporting data, they would have sold their excess natural gas when prices were higher and incurred a much lower loss.
The Bottom Line:
The resulting financial setback for the utility customer was staggering, potentially reaching up to $100,000.
With 360 working on behalf of the client, we were able to negotiate with the utility in order to avoid all penalties and fees that came with having a surplus and extended the timeframe in which they could sell.
The Bigger Picture: The Prevalence of Utility Data Errors
The above case isn’t unique. Nearly 30% of our 360 Energy clients face billing errors annually, and the trend is increasing.
The Broader Impact:
Errors in utility data prevent businesses from managing effectively. The adage, “You can’t manage what you can’t measure,” couldn’t be more accurate. Effective cost management hinges on understanding the consumption of vital commodities such as electricity, natural gas, gasoline, diesel, and water.
Every management team is tasked with driving efficiencies as time progresses. Reliable utility data is essential, forming the cornerstone for meaningful comparisons and showcasing organizational progress.
Energy users are entitled to prompt and precise information regarding their consumption and pricing. Operating without this clarity is a risky endeavor.
Don’t Navigate Blindly: Let 360 Energy Guide You
Utility billing errors can be complex and costly, but you don’t have to navigate them alone. Our team at 360 Energy is dedicated to ensuring you get accurate, timely utility data so you can make informed decisions and protect your bottom line.
🔗 Connect with 360 Energy Inc today and safeguard your company from the hidden costs of utility billing errors. Our expert team is here to assist and guide you every step of the way.