I should have expected this given that there is no heating in that area.

Almost all applicants will already have crappy credit-- even the kids just starting out (because all to often their parents opened utility accounts in the kids name because they had a heat emergency and they needed to get around their own bad credit).

The reasoning behind this: water usage is pretty much going to be an average amount per person, regardless of unit size, whereas with electricity, a larger unit typically uses more electricity: more outlets, gadgets, lighting, heat/air.

Look at roofs, siding, plumbing, drainage, electrical boxes, wiring, duct work, heating and cooling units, water heaters, and windows.

They also insist on adding in the cost of heat despite the tenants paying for that. 

I assumed they meant the heat was out, but when I asked what was wrong with it, they told me "I set it to 60, but it's only 70 inside...".

I was discussing rent and property situation with my tenants, and they got pretty heated and threaten me with legal jargons.

I want to get this fixed, as I'm sure it's driving up my tenants heating bills and could lead to increased vacancy in the future if they're too high. 

That meant our units had air conditioning and individually controllable heat and the tenants were paying for the utilities!

The people you rent to will be more so classified as "Lodgers." in a co-living situation.The Rental license is not "strictly enforced" right now but new laws are in place and enforcement will start heating up.