Below is a high level explanation of how energy is reconciled at a property and outlines options that strata and property managers have in accounting for unmetered /unaccounted usage from reconciliation reports.
What is the Unmetered Balance on the Reconciliation Report?
The unmetered balance is the difference between the Retailers billed usage for the entire property (based on the master meter reading) and the total of individual sub meter(s) recorded usage (based on sub meter readings).
Accounting for “unaccounted usage” explained
A Reconciliation Report will reconcile actual whole of site usage against usage of the consumers within the premises. We allocate usage to the known, end uses (e.g. tenants /common area etc). This occurs where sub metering is in place. Any “read difference” is treated as “unaccounted or unmetered” usage.
What are the factors that attribute to the unmetered balance?
There are other factors that can affect the unmetered balance resulting in either a negative or positive unmetered balance, such as:
Difference in read days between the Retailer and the sub meter reading service provider;
Usage is measured incorrectly, e.g. anomalies with the quality of individual meter set up, installation, programming or configuration issues;
Usage is not measured at all in some areas, e.g. faulty meters or insufficient end use meters or check meters within the network hierarchy;
Usage may not be accounted for correctly, e.g. clarity of end uses may be unavailable or unclear or never been investigated;
Absence of site meter network documentation, e.g. up to date Meter Network hierarchy/drawings;
Estimated reading anomalies; and
Back-billing and adjustments.
Financial Accounting of unmetered balance
The “unaccounted” usage is highlighted on the Reconciliation Report (so it can be identified and addressed if required for further investigations).
However, for financial accounting purposes, it is allocated to the common property usage. We understand most strata and property owners / managers opt to absorb these costs or pass these costs through to the tenants as variable outgoings. That is the decision of the strata/property manager.
Unaccounted Usage – A Key Performance Indicator
The topic of unmetered, or unaccounted utility usage is a significant KPI (key performance indicator) as it is an insight into the integrity of a site’s meter network, with regards to accuracy.
The lower the unaccounted usage is as a percentage of total site usage, in general terms this reflects a high standard of “as installed” meter network infrastructure condition, provided the data acquisition processes and utility accounting practices are sound. Conversely the higher the unaccounted usage, the higher the risk of inherent meter network infrastructure quality and accuracy issues, potentially exposing property owners to liability risk.
Energy-Tec note that best practice for a property with regard to unaccounted energy is less than 2% of total site usage.
If your property’s unaccounted balance is consistently higher than this, it is likely due to inadequate metering which can result in lost energy recovery and higher operating expenses (variable outgoings).
A consistently negative unmetered balance may be due to incorrect meter allocations which can result in incorrect on-charging. Additionally, if solar has been installed and is not correctly metered or accounted for, this too can result in an unmetered negative balance.
What Energy-Tec can do to help?
Energy-Tec’s technical division offer a range of services including meter inspections, meter network audits, meter (accuracy) validation, recertification, programming, commissioning and replacement services to assist in identifying and addressing unmetered / unaccounted issues.
Please contact us today for more information.
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