Case Study – Water Audit Results in Recovery of over $230K

Case Study – Water Audit Results in Recovery of over $230K

Overview

A long time multi-site retail client of ours, Staples, recently added their water utility bills under our utility data management service offering. Previously, they had both their gas and electricity bills under the program, but decided that the water bills should also be included. It wasn’t necessarily because they felt they would recoup a lot of benefits by having the water bills processed by us, but for ease of accounting they felt all the utility bills should go through the same process. Come to find, there are savings to be found in even the water bills…

Issue

Once we began to audit and assess the water bills, it was discovered that one particular location had an excessively high monthly cost. As most of the locations should have a fairly standard monthly water cost (as there are only staff and public washrooms onsite), we investigated further and discovered that the usage at this location was actually about 200 times more than a similar store within the same region. This had gone undiscovered by our client, despite their accounting systems and procedures, due to the fact that the store costs had been within the same budget variance since it opened, and therefore when it was compared against itself, the location never stood out.

Action Taken

Our rigorous review of data based on the cost and usage per square foot, and analytical ranking of the locations, allowed us to determine which locations should be targeted for investigation. This particular location was flagged for investigation on both issues, and we compared the location to another one within the same region – this comparison resulted in an alarming difference and dictated further investigation.

  1. We contacted the utility provider and verified that the meter number for our client was correct.
  2. We had our client’s plumber go onsite to confirm if the feeds from the meter were only servicing our client’s location.

Results of Investigation

It was determined by the plumber that the meter had also been feeding other branches (tenants) within the strip plaza. In further discussions with both the utility and the landlord, it was discovered that when the plaza was built, Staples was the anchor tenant at the time and therefore the first meter (owner’s bulk meter) was installed and transferred to our client when they moved in. As the plaza developed, and 19 other tenants moved in, individual meters were apparently installed for them, but there was some confusion between the landlord and the utility, and these meters were never activated and therefore all the other tenants were drawing off of the bulk meter all this time.

Resolution

All 19 meters have now been activated, under the current tenants for the other units in the plaza. As the plaza development goes back 14 years, our client and the landlord are currently negotiating a reimbursement amount that is expected to be at least $230,000.

Conclusion

Most companies feel that as water is generally a small cost to them, it is not worth monitoring. However, since there are many “mechanical” issues that can occur with water lines and fixtures, we believe it is the one utility where over usage can be discovered rather quickly and repairs made to avoid future costs. Could your money be currently flowing away? Contact us and let Powerhouse help you regain peace of mind.

Download a PDF copy of this case study

Stay connected with us in your favorite flavor!