Fellow auditors, I need some advice on a water bill situation that's driving me crazy. Las Vegas Valley Water District has been billing my hotel client on a commercial rate schedule but applying residential tiered pricing. The monthly charges are all over the place - some months $12K, others $28K for similar usage. Their customer service keeps giving me different explanations.
Water bill audit nightmare with Las Vegas Valley Water District
Kim, water utilities can be the worst when it comes to rate schedule consistency. Here in Alabama with Birmingham Water Works we've seen similar issues. First thing - get a copy of the actual tariff and compare it line by line with their bills. Water utilities often have complex tiered structures that customer service reps don't fully understand.
Albert's right about the tariff review. We had a similar case with Pennsylvania American Water where they were mixing up commercial and industrial rate schedules. The key is documenting the meter size and service class designation. Hotels usually qualify for commercial rates but some utilities try to bump large users into industrial classification for higher revenues.
This sounds like a meter classification issue. Down here in New Orleans with Sewerage & Water Board, they classify customers based on meter size and usage patterns. If your hotel has a large meter but lower usage, they might be getting caught in a weird rate structure. Check if they're being charged demand charges inappropriately.
Juan, you might be onto something with the demand charges. Looking at the bills more closely, there's a "Peak Flow Charge" that varies wildly month to month. Some months it's zero, others it's $8,000+. The tariff mentions peak flow charges for commercial customers but the calculation method is completely unclear.
Kim, peak flow charges are basically demand charges for water - they measure your highest usage period during the billing cycle. Hotels get hit hard because of laundry operations and pool filling. If the meter isn't reading correctly or they're using estimated readings, those charges can be completely wrong. Demand a meter test.
Chuck makes a good point about meter accuracy. Here in Idaho with United Water, we found a hotel being billed for peak flow based on a faulty meter that was registering phantom demand spikes. Cost them $45K in overcharges over two years. The utility fought the refund but eventually paid up after we provided detailed analysis.
Warren, that's exactly what I was afraid of. Requested a meter test and sure enough, the demand register was malfunctioning. Recording false peaks during low-usage periods. LVVWD is now crediting back 14 months of incorrect peak flow charges - total refund of $67,300. Thanks everyone for the guidance!
Excellent outcome Kim! This is why meter testing should be standard practice for any unusual billing patterns. We've had similar successes here in Charleston with Charleston Water System. Water utilities often resist meter tests but they're required to perform them when customers request. Always document everything and don't let them brush you off.