When you think of cutting down your utility costs you first start thinking about energy efficiency. Replacing lighting fixtures, checking boilers, replacing old equipment, maybe putting in solar…but what do you do when you’ve either done all or most of these options and your bills are still high?

What is little known is that utility rules and regulations are open to interpretation. This is especially true for businesses. Here’s why. Utility companies offer a choice among different rates or tariffs. However, there can be several variations within each rate, and even more variations within those variations. It’s just like those Russian dolls where there are several more hidden inside.

But wait, it gets even more complicated than this because every year cases go before your state’s public utilities commission. Most of these cases have nothing to do with your business, but in any given year, there are probably two or three that do. Why should you care? It’s this. You can use that judge’s decision to argue for a rate reduction.

In one of the case studies at Auditek we mention where we obtained a 40% reduction in sewage rates for a psychiatric hospital. Now in this situation what happened is we looked at the way the sewage regulations were written and had been applied for the school district. One of the provisions had to do with food preparation. We thought a very similar use of food preparation existed for the hospital. This is how we reduced their costs by 40%.

Now, these types of rulings go before water districts, sewage districts, municipalities and state public utilities commissions on a regular basis. So why don’t your local utilities tell you about them? It’s the same reason when you call the IRS for a simple tax questions and you get 10 different answers.

Some utility providers have rules that are very straight-forward, not much you can challenge and a good system of checks and balances. For many it’s the Wild West, where rules can change daily and the level of efficiency is that of a third-world country. If your business is in one of these areas, it’s likely the rates you have are ones assigned by the utility company and benefit them, and not you.

It’s why any business finds the best CPA and often tax attorney they can find. Going to the utility company and asking for help is like buying a $20 tax program and expecting answers. Sure, it will show you what to put in each box, but it doesn’t tell you HOW MUCH you can. The rule for taxes is it’s not how you make but how much you keep and it’s the same when looking at the bite that utility costs take out of any businesses profits.