How Utility Recovery Systems Accurately Recover Utility Costs from Tenants

recover utility costs from tenants

It should come as no surprise that commercial buildings use a lot of energy, but did you know that the average 15,000 square foot office building uses over $30,000 worth of energy per year? It’s important for building managers to recover utility costs from tenants so you’re not stuck with the bill, but it’s not as easy as it sounds. You need to account for shared spaces, charge-backs, and other complications. Before you invest in a tenant billing solution, be sure to consider these vital factors.

Properly Allocating Costs Means Investing in Accurate Metering

Accurate metering is essential when it comes to properly allocating tenant utility costs. Many commercial meters have some level of error associated with them, which means that they may record that a given tenant is using more or less energy than they actually do—which is not right in either case.

If your tenant feels they are being billed for more energy than they actually use, they’re not going to stick around much longer. But if errors in your metering system cause you to under-bill your tenants, you’ll be making up those costs. And if errors go unnoticed for years, you’ll be spending an awful lot of money on your tenants’ energy usage! To ensure you recover utility costs from tenants, it’s important to specify the most accurate meter available.

Energy Billing Must be Flexible

Metering solutions sometimes aren’t as simple as “one office = one tenant.” Tenants often lease offices on multiple floors, and some take up much more space than others.

On the other hand, some tenants may be making use of co-working spaces: areas where multiple tenants share the same office. There is currently 27 million square feet of co-working space in offices around the US, and that number is growing!

In order to accurately recover utility costs, your billing solution should be able to add or subtract consumption based on how much space the tenant occupies.

What About Shared Common Areas?

Without accurate submetering, there may be some building areas in which managers simply cannot recover their costs. For example, every tenant uses hallways, and hallway lights may remain on far past regular working hours, draining energy. Other shared areas and systems include:

  • HVAC systems
  • Gymnasiums
  • Elevators
  • Parking lot lighting

Any billing system must be able to aggregate the electricity costs from these shared spaces and then distribute them fairly among your tenants.

Accounting for Additional Cost Structures

It’s possible that the same building might contain two different kinds of business that pay for their electricity in two different ways. For example, imagine an urban building with retail shops on the first floor and offices above.

The first-floor shops are fully submetered. Their employees don’t venture into the rest of the building and don’t use its shared amenities – bathrooms, hallways, gym, etc. As such, they’re excluded from paying electricity costs for these areas. The offices in the rest of the building do use the common amenities, and so they must pay a share of the electricity use.

In this situation, the two different kinds of organization would be subject to two different billing models. Building managers must select billing software that can accommodate these differences.

Recover Utility Costs from Tenants with Socomec

Tenant metering has become far more complicated, which means that billing has become more complicated as well. Recovering utility costs from tenants no longer means walking around with a clipboard and pencil or dividing costs up equally. Instead, they must incorporate accurate, networked meters that can feed directly into a reliable billing system.

Socomec provides the meters that can augment a smart billing strategy. Our meters offer best in class accuracy at just 0.5% of total error (meter + CT’s). That means that you can recapture even more of the expense of utilities, control energy usage, and improve tenant satisfaction. Request a free technical consultation and speak with an expert about how you can save money in your own building in 2019.

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