Unlocking Utility Revenue and Navigating New Regulations

Gerry Crooks, Jacob Jones, and Jeanine Miller from Entrata are joined by 

Andrew Hafemann, Director of Revenue Management and Technology at Mandel Group discussed equipping property owners and managers with new tools to mitigate rising utility costs, generate ancillary revenue, and manage the growing complexity of regulatory compliance. 

Key Product Announcements

The session highlighted three major platform additions designed to improve both the resident experience and property financials:

1. Entrata Offers

This new feature integrates valuable products and services directly into the lease workflow to drive ancillary revenue.

• Energy and Broadband: Residents are presented with offers from partners (starting with Save on Energy for deregulated markets like Texas and Allconnect for broadband) immediately after signing their lease.

• Seamless Integration: When a resident signs up, the system automatically completes the move-in checklist item for utility setup.

• Revenue Generation: Properties earn revenue for every successful sign-up. In the private beta, energy saw a conversion rate of almost 17%.

• Future Expansion: Plans include expanding to financial services, insurance, community solar, and more.

2. Policy Impact Dashboard 

To address the dramatic increase in local and state energy reporting and emissions reduction mandates (Building Performance Standards or BPS), this dashboard provides critical visibility.

• Risk Mitigation: The dashboard helps manage the logistical nightmare of tracking unique requirements and deadlines across a large portfolio, thereby preventing severe financial penalties (e.g., up to $1,000 a day for BPS non-compliance in cities like Boston).

• Policy Visibility: See which properties are affected by specific benchmarking, audit/retro-commissioning, and BPS policies, along with upcoming deadlines and potential financial risks.

• Enterprise Tools: Properties on the Utilities Enterprise bundle get access to tools for setting baselines, defining targets, and managing compliance projects.

• Data Source: Data for the dashboard is provided through a partnership with the Institute for Market Transformation (IMT).

3. Bulk Pre-Bill Approval

Designed to improve efficiency, particularly for Single-Family Rental (SFR) portfolios or properties with scattered locations.

• Simplified Review: Regional managers can review and approve utility expense and recapture percentages for multiple pre-bills across different locations in a single view.

• One-Click Approval: The feature allows the approval of multiple pre-bills with a single click, streamlining a historically time-consuming process.

Customer Perspective and Industry Challenges

Andrew Hafemann of Mandel Group emphasized the necessity of a strong utility management partnership, noting that utilities are an ever-increasing expense.

• Strategic Challenge: The main challenge is mitigating loss by accurately recapturing costs from residents without alienating them. In markets with low rent growth, tightening utility expenses becomes a critical strategy.

• Resident Friction: The biggest daily struggle is providing a clear, simplified explanation of utility calculations to the residents to combat the "nickel and diming perception." Audits and fee transparency are essential to building resident trust.

• Legislative Impact: State legislative changes (like the removal of the ability to charge for common area electricity in a market like Minnesota) can instantly wipe out a significant portion of revenue, demanding creative budgetary makeups.

• Emerging Issues: The demand for EV charging is growing, but owners must first assess the demand (currently low for many rental markets) and the expensive infrastructure retrofit required. Resident sophistication is also increasing, with tenants asking about energy efficiency and mitigation efforts to keep their bills down.

Key Takeaways and Future Focus

The session reinforced the commitment to solving complex utility issues through technology and partnership:

• Compliance and Regulation: The rise of BPS means proactive management and dedicated tools are no longer optional.

• Recapturing Costs: Solutions for issues like community solar capex recapture are actively being developed.

• Core Support: Utility bill management includes auditing and preparation, with an option for a utility bill pay product and seamless Energy Star benchmarking via API.

‍Billing Methods: While flat-fee billing is generally discouraged (except for controllable expenses like trash), properties should consult with the proper authorities to determine the appropriate RUBS method (e.g., billing water by occupancy) based on state compliance.