Correct and Collect Inside the Utility Auditing Industry

Vincent DiCeglio worked for the Long Island Lighting (LILCO) company for 24 years as a customer service representative. During that period, he discovered numerous errors on clients’ bills, and felt that consumers could use an outside advocate to obtain refunds. In 1976, he took a leap of faith and created his own utility auditing company, Urac, in Rockville Centre, New York, which analyzed bills and recouped appropriate refunds. "I figured that if I could find mistakes at LILCO, then Con Ed and everyone else must have mistakes," he recalls. As it turns out, he was correct. His and the other utility auditing companies that have sprung up since then have recovered millions of dollars for their customers.

At the time DiCeglio began his business, there were few like it. (His wife, Ellen Bindler, offered some friendly competition and created Utility Check., also in Rockville Centre. Today, they both run Utility Check, and DiCeglio’s son has taken over Urac.) He believes the first utility auditor was National Utility Service (NUS), headquartered in Park Ridge, New Jersey. "They worked differently than I did, requiring payment up front and doing everything through the customer," he explains. Most utility auditing companies charge a percentage of the refund. They do the work of collecting that refund, which can indeed be a lot of work. If the utility company refuses a claim, the next step, in the case of regulated industries, is to take it to the Public Service Commission (PSC), where there is an informal hearing. If that is lost, the next step would be a formal hearing.

Rampant Mistakes

Why are there so many errors in utility billing that an entire industry has sprung up to correct the situation? The potential sources of inaccuracy are many. Meters may be registering incorrectly. Customers may be getting billed under the wrong classification. Estimated bills may be wildly inaccurate. Regarding water bills, Alan Rothchild, president of Vantage Group, a water cost management group in Monroe Township, New Jersey, reports, "On the meter charges, there are a plethora of possible incorrect charges. The meter could be incorrectly installed or incorrectly read. There could be an error in the conversion from flat rate frontage [billing on a flat per-unit basis] to meter, sometimes running in the tens of thousands of dollars." Michael Lockhart, president of American Telephone and Utility Consultants in Manhattan, says that examples of billing errors include "mathematically miscalculated bills; bills on non-existent meters; residential buildings double-billed on both frontage and metered billing simultaneously; overlapping billing periods; wrong meter multipliers; overestimated bills on broken meters; bills calculated using incorrect rates."

Because of the numerous factors that affect utility charges, utility auditing companies are far more equipped than an individual would be to analyze a bill. Stephen Galowitz of UtiliSave in New Rochelle, New York, says they are constantly finding new types of errors, and points to a recent example: "In reviewing the account of a manufacturer in Connecticut we found an issue that didn’t apply to them but did apply to an institution in another state… Even a capable property manager will not find an issue like that because they would never have had the opportunity to look at a bill from a manufacturer in Connecticut."


Related Articles

Home Office Expense?

Don't Deduct That Just Yet

Mixed Income Communities

Fairness, Equity, & Neighborliness

New Law Could Cap Maintenance & Common Charge Increases

Some Predict Trouble for Multifamily Communities & Owners