What is the Hotel Bill Teardown?
The Hotel Bill Teardown is Jaken Energy’s method for reconstructing a hotel’s invoice from identifiable service periods, quantities, rates, contract components, and adjustments. Its purpose is to make a bill explainable before the team shops supply or changes equipment.
The method creates a reusable account worksheet rather than a claim that every hotel invoice looks the same. A supplier may invoice separately, a utility may consolidate charges, and the tariff may group components differently. Preserve the original labels, then map them to a consistent analytical category.
Begin with the bills and costs guide if the distinction between energy volume and demand is unfamiliar. The teardown goes one step further: it builds an evidence trail from each line to the document or quantity that controls it. That trail is what lets a controller explain a variance and an engineer identify an operating response.
Which records belong beside the invoice?
Place the utility bill, separate supplier invoice, agreement, and current tariff together. Add the meter and account register, service dates, occupancy records, and relevant operational notes. Do not infer a supplier’s renewal terms from an isolated bill line.
The DOE rate-options guide explains why charges react differently to consumption and demand. Use the tariff to identify the particular measurement rule. A statement that the hotel pays for peak demand is incomplete without the interval, period, and any minimum or ratchet that determines billing demand.
If records are missing, list the gap explicitly. A missing contract exhibit can prevent verification of a pass-through; a missing interval dataset can prevent explanation of the peak. The worksheet should distinguish a reconciled charge from a plausible explanation awaiting evidence.
How do the teardown categories work?
Categorize by economic function while retaining the billed description. Separate energy supply, network delivery, demand-related charges, riders and taxes, fixed charges, and adjustments. Capacity and transmission need contract-specific treatment rather than a universal location on the invoice.
| Worksheet field | Evidence | Result to record |
|---|---|---|
| Service period | Invoice and meter dates | Days and overlap with operating data |
| Energy volume | Actual or estimated meter reading | Quantity and unit |
| Supply component | Agreement and product schedule | Included or adjustable price |
| Delivery component | Utility tariff | Rate class and calculation |
| Demand component | Tariff and demand registers | Measured versus billed demand |
| Correction | Prior invoice and credit record | Original period and reason |
The EIA delivery explanation supports the distinction between selling supply and operating the distribution network. The worksheet must still follow the property’s actual documents. A generic diagram cannot establish where its transmission charge is billed.
What is the numbered teardown process?
Complete the physical quantities and document references before interpreting financial performance. This reduces the risk of treating a billing correction as a change in guest behavior or a tariff increase as equipment inefficiency.
- Identify the property, service account, meter, and billing entity.
- Record the service dates and reading status for every billed quantity.
- Copy billed quantities, rates, and charges without changing labels.
- Assign an analytical category and governing document to each line.
- Recalculate components and reconcile to the invoice total.
- Explain differences from a comparable earlier period.
- Assign unresolved items and retain the outcome with the account record.
Do not force a mismatch to disappear by adding an unexplained balancing line. Rounding, taxes, tiered rates, and prior-period adjustments may account for it, but each needs an explanation. State a practical reconciliation tolerance and record why it is appropriate for the invoice’s precision.
How does a worked example reconstruct the total?
Use explicitly assumed inputs so the arithmetic is inspectable. In this illustration, supply is 62,500 kWh at $0.086/kWh, delivery energy is charged at an assumed $0.027/kWh, billed demand is 205 kW at an assumed $13.50/kW, and fixed charges total $145.
Supply equals $5,375. Delivery energy equals $1,687.50. Demand equals $2,767.50. Adding the $145 fixed component gives $9,975 before any excluded taxes, riders, or adjustments. Each term is visible: 62,500 × $0.086 + 62,500 × $0.027 + 205 × $13.50 + $145.
The subtotal divided by usage is $0.1596/kWh. That is a blended cost indicator for these assumed components, not the supplier’s $0.086/kWh price. Comparing a new supply quote against $0.1596 would overstate what changing supply can affect. The example is not a tariff, supplier offer, or client result.
How do you explain a changed bill after the reconstruction?
Build a bridge from the earlier comparable period. Show usage and rate changes for each applicable component, then add demand changes, fixed-charge differences, and adjustments. The bridge must reconcile to the observed invoice difference.
Match service days and label unusual periods. A hotel undergoing a room renovation may have occupancy, equipment, and billing timing changes simultaneously. Accounting should not assume that every variance is a procurement problem. Engineering should not assume that a favorable total bill proves lower physical consumption.
The CPOR Energy Benchmark provides the room-night normalization after the bill is reconciled. Keep it downstream of the teardown: normalizing an incorrect or unmatched invoice creates a more polished incorrect number.
How should supplier pricing and compensation be recorded?
Record the purchased price components and any disclosed compensation with the agreement reference. A supplier-paid broker fee may sit inside a per-unit price and not appear as its own invoice item. Absence of a visible fee line is not evidence of an uncompensated service.
Read contract cost coverage to distinguish included components from pass-throughs. Obtain the supporting formula and period for a variable charge. If a charge looks inconsistent, ask which provision authorizes it and which quantity the supplier used, rather than assume every change is an error.
The Pennsylvania commission’s business shopping guidance emphasizes checking supplier terms, deposits, cancellation, and offer details. Those details belong in the purchasing record even when the teardown initially focuses on invoice arithmetic.
Who should own the worksheet each month?
Accounting should maintain the invoice and reconciliation record, engineering should explain operating events and peaks, and purchasing should resolve price and contractual questions. One person should coordinate the record so a question does not disappear between teams.
Have the backup reviewer read the method before the primary reviewer leaves. Use a standard file location and account naming convention. When a supplier or meter changes, preserve the earlier mapping and explain the effective date of the new one.
Finally, carry unresolved items into the procurement workflow before new offers are requested. Bad baseline information can infect a bid, a budget, and a project estimate. A completed teardown should leave the hotel with explainable costs, documented uncertainties, and a clear owner for the next action.
How do you preserve a useful audit trail?
Retain the original invoice, the calculation worksheet, and the document references used to verify it. If a rate changes, record the effective date and preserve the earlier rate rather than overwrite every historical row. That allows later reviewers to reproduce the charge using the rules that applied to its service period.
When a correction arrives, connect it to the affected invoice and record whether it closes the entire issue or only one component. A later credit should not be treated as a continuing reduction in the hotel’s ordinary monthly cost. Keep an issue identifier and a short resolution note so the next reviewer can distinguish a corrected error from a recurring contractual adjustment. The audit trail should explain the conclusion as well as preserve the arithmetic.