What Is a Utility Cost Reduction Audit?

P3 Cost Analysts / Utility / June 13, 2019

When most people think of a utility audit they think it means finding ways to reduce the consumption of energy or water. And while that is certainly a worthwhile endeavor that is not what we mean when we are referring to a utility cost reduction audit.

What Is a Utility Audit?

A utility audit is an audit of your utility expenses. Generally, these are your electric, natural gas, and water/sewer expenses. An expert reviews these utility bills and expenses for errors, overcharges, and opportunities for savings. You can think of it like forensic accounting.

There are hundreds of factors and line items that go into your bills each month. Vendors make errors in meter readings, rate classifications, tariff applications, and many others. And the burden of finding these issues is on the customer, not the vendor.   

Aside from being an extremely time-consuming process, without decades of training in these areas knowing what to look for is almost impossible.  

At P3 we apply our 100 years of combined utility expertise on our clients’ behalf to save them money. If we can find you savings, we share in them 50/50 each month. If we can’t save you money, it does not cost a thing.

Specifically, our utility auditors are looking for billing errors/saving opportunities in things like:

Electric/Natural Gas

  • Key punch
  • Meter reading
  • Demand-based
  • Incorrect rate application
  • Incorrect tax
  • Multiplier/constant
  • Incorrect implementation of contract
  • Incorrect application of tariff
  • Erroneous fees and taxes


  • Key punch
  • Meter reading
  • Multiplier/constant
  • Incorrect application of surcharges
  • Incorrect meter usage

Why Is a Utility Audit Important?

In our experience, 95% of organizations contain an invoice with at least one error or overcharge. These errors can be quite substantial, resulting in lost money each month that could go directly back into your bottom line.

Industry tariffs, codes, bills, and terminology are all written in industry jargon. This makes it almost impossible for anyone to be able to confidently determine what they are spending. Just have a look at one example of an electric tariff to see for yourself.

And calculating what your costs are supposed to be is no cinch either. You can try your hand at utility industry math but we’ve yet to have someone get this right.  

Simply put, if you care about the money you are spending each month then you should have your utility expenses audited by a professional.

How Utility Cost Reduction Works

A utility audit is conducted by getting invoices for each location and a letter of authorization for each vendor. From there we conduct the following series of steps:

  • We review all the invoices and associated contracts for accuracy and contract/tariff compliance.
  • We conduct a thorough market analysis of options, providers, and regulatory requirements and compliance.
  • After 4-6 weeks we deliver our findings to the client for their approval.
  • Once our findings are approved we implement the agreed savings measures.
  • Only once savings begin hitting the client’s bottom line do we begin to share in the savings.
  • We monitor the invoices every month for accuracy and overcharges, ensuring savings stay intact and remain in place.


Verifying the accuracy of these expenses is difficult and complex. If you value the money you are spending in this category you should have it reviewed by industry professionals. 

If you are spending over $5,000/month on your utility bills you qualify for our utility audit service. Having been in the auditing business since 1991 we’d love the opportunity to perform our risk-free/shared savings audit and see what we can do for you. 

If you are interested please either send us a message or give us a call at 1-877-843-7579.   

Send this to a friend