My 12-step audit process — the checklist I use on every account

I get asked about my audit process constantly so I'm posting it here as a reference. This is the checklist I follow on every commercial electric account.

1. Verify rate schedule eligibility against tariff criteria
2. Check demand charges — billing demand vs actual demand, ratchet calculation
3. Verify power factor — threshold, penalty formula, metered PF value
4. Check tax exemption status — sales tax, gross receipts tax
5. Verify franchise fee percentage against city ordinance
6. Check all riders — correct customer class rate for each rider
7. Verify meter multiplier/CT ratio against meter configuration
8. Check billing period proration on short or long periods
9. Review estimated reads vs actual reads
10. Compare current rate to alternative rates that may be cheaper
11. Check for TOU eligibility if load profile supports it
12. Verify all charges against tariff line by line

Steps 1-3 catch about 70% of the errors I find. Steps 4-6 catch another 20%. Steps 7-12 catch the remaining 10%. But that last 10% often includes the biggest dollar findings.

This is gold Randy. Printing this and taping it to my monitor. I've been doing steps 1 and 2 but skipping 3-6 on most audits. No wonder I'm leaving money on the table.

I'd add one more step between 6 and 7: check the service voltage. If the customer owns the transformer and takes service at primary voltage, they should be getting a voltage discount. This is related to step 7 (meter configuration) but it's worth calling out separately because the voltage discount can be 3-8% of the total bill.

The franchise fee check is one I've been skipping completely. Adding it today. Do you check every account against the city ordinance, or just spot-check?

Rachel, I check the franchise fee on every account because the ordinance research only needs to be done once per municipality. Once I know the authorized rate for a city, I can check every account in that city in seconds. Build a reference sheet of franchise fee rates by municipality and it becomes a 10-second check.

Bookmarking this thread. Just got certified and this gives me a concrete workflow to follow. Thanks Randy.