Working on a retail strip center audit in Denver where Xcel Energy provides service under Schedule SG. Lease defines utility pass-through as "electricity, gas, water, sewer, and trash" but landlord is including some questionable charges in CAM. Specifically, they're passing through the monthly customer charge, late fees from 2013, and something called "environmental cost recovery" that adds $89/month. Are environmental surcharges typically considered part of base utility service? The tenant is a small restaurant paying about $340/month total.
Xcel Energy CAM charges - what counts as "utilities"?
Scott, I'm in Omaha dealing with similar Xcel schedules. The environmental cost recovery is a legitimate tariff charge - it's Colorado's version of what we call renewable energy standard costs. That should be included in utility pass-through. However, late fees are absolutely NOT legitimate unless the lease specifically allows penalty charges to be passed through. Customer charges are usually legitimate but check if they're being allocated properly based on square footage.
Ken's right about the environmental charges. Here in Utah we have similar renewable portfolio standard costs that get passed through Rocky Mountain Power bills. The late fees though - that's landlord negligence and shouldn't be tenant responsibility unless there's very specific lease language allowing it.
Thanks Ken and Connie. I reviewed the Xcel tariff and you're correct about the environmental cost recovery - it's mandatory under Colorado PUC rules. Found the late fees were from landlord's failure to pay bills on time in July and August 2013, totaling $67. That's definitely coming off the tenant's charges.
Good catch on those late fees Scott. I've seen landlords try to pass through all kinds of penalty charges that result from their own poor management. Always worth checking payment history to see if there's a pattern of late payments being pushed to tenants.