Utility Budget Hacks For Multifamily Properties
Researching rate increases can be confusing and overwhelming even to hardened experts, especially if you need to do this for multiple sites. Here’s my strategy to make sure I get as close as possible to the right answer.
Find Approved Rate Hikes Listed on Rate Schedules
Individual providers will post rate schedules on their websites and approved rate hikes are usually listed on those rate schedules. For example, on this BGE rate schedule, the new rates are listed to begin on 10/2018 through 5/2019.
Note: Posted rate increases don’t always show a full calendar year. Use your best judgment for the remaining months not published. The provider’s customer service line can help you to understand rate increases!
You’ll need to look at each account and determine what your rate identifier is, and then proceed to check when and what the increase will be. For example, the Residential Rate R supply rate is scheduled to increase from 7.667 to 7.81-‐kWh or about 2% starting 10/2018 (doesn’t include additional fixed fees). Therefore, you might budget a 2% increase in your electric supply for 2019.
What To Do If Rate Increases Are Not Published
If no rate increases are published yet, but it’s still possible there could be one, you may want to look at the EIA website for projected rate increases and add that to your budget.
EIA Website: https://www.eia.gov/outlooks/steo/report/electricity.php
In this case, the residential rate projection is scheduled to increase by about 2.63%. However, be sure to ask the utility what month they typically apply for a rate increase to occur, or when the last rate increase was. You can then apply the rate increase from that month forward vs. the entire year.
What To Do When You Have a Procured Rate
If you have a procured rate (locked in with a contract) you don’t need to schedule for a rate increase unless the contract expires during the budget period. You should reach out to your electric broker and ask them what to project.
Usage trends shouldn’t change much on an operational property, so this shouldn’t affect your budget unless there’s a prediction for a colder winter or hotter summer. I’d conservatively utilize usage trends from the past and not guess at a projected increase!
Finally, here’s an easy spreadsheet to help you keep track of the changes in your utilities over a three-year time frame.
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