Managing several apartment complexes in the TVA territory and these fuel cost adjustments are getting crazy. Some months they're adding $0.02/kWh, other months it's a credit. Tenants don't understand why their bills fluctuate so much when usage is consistent. How do you explain the FCA to residents when they complain about billing? Property managers are tired of fielding these calls.
TVA apartment billing - how do you handle the fuel cost adjustments?
Diana, I deal with TVA accounts in Knoxville and we just build the average FCA into our utility allowances. Over the past 3 years it's averaged about $0.015/kWh, so we use that for budgeting. When it's higher, management eats the cost. When it's lower, they keep the savings. Evens out over time and eliminates tenant confusion.
Terry's approach makes sense for budgeting, but you're leaving money on the table when the FCA swings negative. Here in Memphis we track it monthly and adjust the utility billing accordingly. Takes more work but the property owners appreciate the accuracy. We use a simple spreadsheet to track the adjustments.
Amir, do you pass through the actual FCA monthly or do you true-up quarterly? I've been thinking about switching to monthly adjustments but worried about tenant pushback on variable charges. Nashville Electric Service doesn't have this issue since they're not TVA, but I have some accounts in TVA territory.
Ed, we do monthly pass-through but cap the swing at +/- $0.01/kWh to avoid sticker shock. If it goes beyond that range, we true up quarterly. Seems to work well and tenants understand they're paying actual fuel costs rather than a fixed markup. Transparency helps with acceptance.
The FCA is definitely one of TVA's more annoying billing features for master-metered properties. I've seen it swing from -$0.025/kWh to +$0.035/kWh over the past few years. Amir's capping approach is smart - gives you accuracy without shocking tenants with huge monthly swings.
Randy, those are some wild swings. I think I'll try Amir's capped approach on a couple properties and see how it works. Better than eating all the volatility in our utility allowances. Thanks for the input everyone - this has been really helpful.