Utility Cost Management LLC

Case Examples

Reduce electricity, gas, water, sewer and solid waste expenses by identifying and implementing cost-effective savings solutions.

Case Examples

UCM takes pride in identifying and implementing client savings that are beyond the capabilities of other firms. We believe our thorough understanding of utility tariffs and regulations, combined with our willingness to “go the extra mile” to deliver results, sets UCM apart.

A sampling of past client engagements demonstrates the lengths that UCM will go to ensure that client utility charges are minimized.

City – Electricity Billing Error
UCM reviewed approximately 350 gas and electricity accounts serving a Southern California city. UCM determined that more than 50 small electricity accounts were eligible for a special rate schedule because their load factor exceeded 90%. The utility disagreed, contending that none of the accounts met the requirement of the appropriate tariff. UCM eventually convinced the utility that its load factor calculations were incorrectly based on maximum demand readings, rather than peak period demand readings. The end result was that over $40,000 in refunds were paid to the city.

University – Billing Errors
UCM reviewed the utility accounts for a public university and the 500,000 square feet student-occupied apartment building that it owns. UCM identified various billing errors, including a sewer overcharge of about $1,000 per month. By using the utility’s microfiche records, we were able to document that the error had been occurring for more than 14 years, and eventually we persuaded the utility that our client should receive a refund for the entire period. A refund of $167,000 was paid for the sewer overcharges. In total, the university received more than $200,000 in refunds, and reduced ongoing costs by more than $75,000 per year.

School District – Improper Rate Increase
UCM successfully argued that a public school district should receive a refund of sewer charges that a city had imposed in order to finance an upgrading project. These charges were not itemized on the monthly bill, and therefore had gone unnoticed for over four years. The improper charges were brought to light only after UCM identified a suspicious increase in the rates, and through a review of the city’s financial statements, which confirmed the impropriety of the rate increase. The school district received a refund of $104,000 and a 72% reduction in ongoing charges.

Cotton Ginners – PUC Representation
Most of the California cotton ginning industry, 68 gins in all, hired UCM to bring a complaint case to the California Public Utilities Commission (CPUC) against PG&E. The cotton ginners asserted that they should be served on agricultural rates instead of commercial rates, and that they should receive a corresponding refund. After more than three years, the CPUC finally ordered PG&E to serve the cotton ginners on agricultural rates and refund over $9 million in past charges.

Fruit Packer – Evaluation of Equipment Upgrade
A large fruit packing facility was considering an equipment upgrade that would require an investment of more than $200,000. UCM assisted the plant engineer in understanding how the cost of operating the new equipment would be affected by anticipated changes in electricity rate schedules. As a result, the client was able to work with utility authorities to ensure that its current rate classification would be maintained, and that its capital investment would be cost effective.

Milk Processor – PUC Representation
UCM was engaged by a milk processor to review the utility accounts at its production facility. Based on its interpretation of applicable tariffs, UCM requested a lower electricity rate for the processor, but its request was denied by the utility. UCM took the matter to a formal hearing before the California Public Utilities Commission (CPUC) and succeeded in reversing the utility’s decision. UCM handled all aspects of the CPUC hearing, from preparing witnesses, to presenting exhibits, to cross-examining utility representatives. UCM also filed all necessary briefs that explained why the utility had misinterpreted the tariffs. In the end, the CPUC ordered the utility to pay a refund of more than $1,000,000 to UCM.s client, and to reduce ongoing charges by $150,000 per year.

Office Building – Billing Errors
UCM identified two billing errors affecting a 600,000 square feet office building. First, sewer charges were excessive because they did not account for evaporation losses through the building’s cooling system. UCM worked with the local water utility to develop a reasonable estimate of the actual sewage flow, which has resulted in lower bills. In addition, UCM reduced electricity charges by eliminating surcharges that the client should not have been required to pay. UCM’s work to correct these two errors resulted in refunds totaling $600,000 and annual savings of more than $100,000.

Low Income Housing – PUC Representation
When the California Public Utilities Commission (CPUC) adopted what was touted as a major rate reduction “for all customers”, no one would have thought that some customers – namely, low income housing projects – would actually pay significantly more under the new rates. UCM spotted this “quirk” in the new rate structure, and petitioned the CPUC on behalf of a low income housing client to correct the situation. Despite strong opposition from the utility company, the CPUC granted the petition. As a result, the 14-86% electricity rate increase experienced by low income housing projects under the new rates was totally eliminated.

Multifamily Housing – Utility Management Services
For more than ten years, an owner/operator of 2,000 residential housing units has utilized UCM as its “utility manager”, overseeing all aspects of its utility service. The service includes ongoing implementation of a variety of cost-reduction measures, as well as daily receipt and tracking of all utility bills. During the contract period, UCM’s client has reduced costs by hundreds of thousands of dollars, and has eliminated the burden of dealing with utility issues.

Hotel – Special Facilities Fee
UCM analyzed the utility accounts for a 600,000 square feet hotel in downtown San Francisco. As part of its utility charges, the hotel paid a so-called “special facilities fee”, which compensated the electric utility for the cost of installing and financing certain transformers needed to provide service. This fee was based on an agreement that was executed when the hotel initiated service in 1982. Under applicable regulations, the utility was permitted to charge interest for financing the special facilities, but the interest rate was supposed to fluctuate with market conditions. UCM discovered that the utility had allowed the interest rate to remain fixed at 1982 levels, resulting in excessive interest charges. A substantial refund was recovered on this basis.