Most military families living on Fort Leonard Wood have never received a bill for utility service. Built during the 1950s, most of the post’s older homes don’t have modern insulation, heating systems were designed more for comfort than efficiency, and meters were never installed or even planned for the duplex, fourplex, or sixplex units.
That meant families didn’t have a way to monitor their energy usage even if they wanted to conserve.
All that will change this summer for the new houses being built by American Eagle on Fort Leonard Wood, and will change next year for homes that are being renovated to be more energy efficient. While some residents will get billed for using too much electricity, others will get a rebate check for conserving energy and using less than their neighbors in similar housing.
“Eventually this is going to be a standard at all privatized installations,” said Jaimie Young, American Eagle’s resident outreach officer. “This is going to become a normal format for all of our soldiers.”
Mandated by the Department of Defense, the privatization process takes military housing that was once government-owned, leases it to large private companies, and pays the companies the basic allowance for housing or BAH which would have been paid to the service members living in their on-post housing if they had been living off-post.
BAH is recalculated each year based on a survey of actual rental or mortgage costs and utility bills being paid by service members living off-post. In return for the payments, the privatized companies are required to replace or refurbish the on-post housing units and have an economic incentive to do so, because most service members are no longer required to live on-post and can move off-post if they don’t like the quality of on-post housing.
Until now, American Eagle has simply been paying the utility bills since there was no way to monitor how much individual families were using. However, the new homes being built on post were constructed with meters and residents have been receiving mock bills since July telling them how much electricity they used and how much their bill would have been for that usage.
In August, the mock bills will become real bills for the new houses; renovated houses will begin receiving mock bills in July of this year but their residents won’t see real bills until January 2009.
Another private company, Minol, has been hired by American Eagle to do the billing as a subcontractor. That company also provides billing services to housing privatization companies at Fort Lewis and Fort Hamilton; about a dozen installations nationwide are in the process of billing or soon will begin that process, according to Minol representative Shane Stenger.
The bills received by Fort Leonard Wood residents in August won’t look like typical civilian off-post utility bills, however. Since utility payments are already included in the BAH for service members that the Army uses to calculate payments to American Eagle, those whose bill is at least $15 more than a “rolling average” of bills for comparably sized houses will have to pay the difference, while those whose bill is at least $15 less will receive a rebate check.
That $15 will carry over from month to month, Stenger said, so a resident who is $10 under the rolling average for August and $10 under the rolling average for September would receive a cumulative $20 check, or whatever the total is once it exceeds $15. Excess usage will also accumulate from month to month and result in a bill once it exceeds $15, he said.
“This is actually a great bonus, because if they are really focusing on utility conservation, most of them will receive a rebate,” said Heather Taylor, American Eagle’s property manager.
The purpose of the mock bills is to help residents see how much energy they’re using and also identify any maintenance issues that may be causing high bills. Stenger said once meters were installed in older renovated housing at Fort Lewis, residents discovered some cases of high energy usage that turned out to be defective pipes or other problems in the unit that needed to be fixed before a resident could fairly be charged for utility usage.
Fort Lewis’ experience for the last year and a half with metered service has been a helpful test case, Stenger said, and numerous maintenance problems were discovered that had wasted energy for years without detection.
“Because they weren’t being held responsible for it and we didn’t know what the usage was, (residents) just assumed that their heater didn’t work well, or just assumed that what was wrong with the house was normal and never questioned it,” Stenger said. “By being able to put meters on the home and being able to look at usage as well as having residents look at their own usage, it really exposed a lot of maintenance issues.”
However, Young said many cases of high utility usage turn out to be due to resident usage patterns rather than housing problems.
 “One of the biggest benefits, I think, with the mock billing process is, first and foremost, it lets our residents see what they’re doing,” Young said. “If they are excessively going over the baseline, this gives them, as well as us, time to make any changes, come in and do any maintenance work, anything along those lines that’s going to help our residents.”
Specific help is available to residents, she said.
“Minol is excellent; they can go on the web site for Minol and find energy conservation tips,” Young said. “We put out in our newsletters energy conservation tips. This gives them the option to say, ‘OK, if I make these changes,’ the following month when they look at their bill again, they’ll be able to see where the difference is. They’ll be able to see, ‘My bill has come down and I may possibly qualify for that rebate now.’”
American Eagle Project Director Richard Cole said there’s no reason people who conserve should subsidize those who don’t.
“When you have a resident who chooses to keep their windows open when it’s cold outside and the heat pumps keep working or chooses to take long hot showers and uses a lot of electricity to heat the hot water, they will probably go over that baseline consumption,” Cole said. “If you have a family that chooses to observe some of the energy conservation tips that we’re going to publish and have published in the past and do the smart things, they will actually come below that baseline and will receive a rebate on their utilities.”
Cole said a resident with a high utility bill will receive a visit from an American Eagle maintenance crew to see if something needs to be fixed that’s causing the high bill.
“We will actually go out and visit the home and talk with the resident and try to assess what is actually going on,: Cole said. “Is it something with the house, or could it be a practice that the resident is not doing that he should be doing?”
While he understands that some service members won’t like having to pay utility bills for on-post housing, Cole said being able to get a rebate for conserving energy is a benefit not available for any area off-post housing alternative. On-post utility rates are far lower for Fort Leonard Wood residents than for his home in Rolla, Cole said.
“Nowhere can you get a place off-post that will offer you, ‘If you are conserving your utilities for electricity and natural gas, we will pay you back,’” Cole said. “That is a terrific advantage … It is a terrific windfall for that resident to get a rebate on his utility consumption. Nowhere does that happen.”
However, not every home on Fort Leonard Wood will be part of the rebate and billing process immediately, Cole said, and the full conversion process will take about 12 years.
Some older homes that won’t be refurbished will never get a meter before they’re torn down since it doesn’t make good financial sense to make them energy-efficient, Cole said, though all new homes will be built with a meter.
Stenger said based on his experience with other installations, about a third of residents get a bill, about a third get a rebate, and the remainder are within the $15 window and don’t get a rebate check or a utility bill. Stenger said he couldn’t give any estimates of how much money is typically rebated or billed to residents since that depends on local utility rates.
It’s not clear what those rates will be at Fort Leonard Wood. While Stenger said Fort Leonard Wood’s current rates are “significantly lower than outside the gate,” the post’s wholesale utility supplier has dramatically increased its rates to consumers with a large “load factor.” That means smaller residential communities like Waynesville have seen relatively small rate increases under 10 percent but larger communities with many industrial or commercial users such as Lebanon have had much larger increases. Some preliminary estimates for Fort Leonard Wood rate increases have indicated the post’s electric bill might double under the proposed rate plan.
Substantial rate hikes will take effect with April consumption, Cole said, but it’s not clear how high they will be.
“We do expect an increase in our electric rate,” Cole said. “Those rates have not been firmed up yet by the directorate of public works, and once they give us their new electrical rates, then we’re subject to pay them.”
That utility rate increase will come out of American Eagle’s operating revenue, Cole acknowledged, though a region-wide increase in BAH rates will likely result in more income for the company.
“We would expect or at least we would anticipate the BAH to change consistently with local market conditions,” Cole said. “It’s a big expense, but we would anticipate the BAH being increased in an amount to compensate for that.”
Long-term, Army officials have said they want to see a 10 percent across-the-board reduction in energy usage for Army installations. Monitoring the bills while providing rebates to those who conserve could be a significant help in reaching that goal, Stenger said.
“This is not just Fort Leonard Wood,” Young said. “The military is constantly changing, standards are constantly changing, and this is just one of many changes. This is going to be a norm across the board for all privatized installations and our soldiers are going to encounter this almost, at some point, anywhere they PCS to.”