Submetering for
Residential Tenant Billing

Submetering is beneficial to many different types of residential buildings including apartment buildings, and cooperatives and condominiums.  Using remote reading electronic meters as opposed to electromechanical meters has numerous advantages.  

Multi-Dwelling Apartment Buildings

Are you including your tenants’ electricity in the rent?

If the answer is yes, you could be losing THOUSANDS OF DOLLARS each and every year.

Let’s say you own/manage a building that has nothing more than a “master meter” installed at the building’s main electrical service entrance.  This “master meter” measures the electrical usage for the entire building.  Your building receives a monthly bill from your local utility company (Note: with the introduction of deregulation, this may no longer always be the case).  Electrical power is then distributed throughout your building (to the tenants) with no individual metering involved.  Since there are no other meters in your building, there is no way to determine when, where, and how the electric is being consumed by your tenants or building operations.  When calculating your rental rates, you must predict how much electric a tenant will consume and factor it in. 

But

What happens when your building’s electric rate increases? 

What happens when your tenants install their own A/C units or larger A/C units or portable electric heaters that draw large amounts of power?

What happens when you need to maintain competitive rental rates otherwise you can’t make a decent profit?

The answer is:  SUBMETERING

By implmenting submetering in your building:

1. You bill the exact amount of electric consummed by each individual tenant all the time

2. When your building’s electric rate changes, your tenants’ electric rate changes accordingly, maintaining your profit margins.

3. The cost of electric is taken out of "rental rate calculations".  Therefore, you can lower your rental rates to be more competitive.

4. Your tenants have complete control over their electric usage.  Energy conservers will be rewarded.  Emphasize this benefit to them.

5. Paying for electric by metering is the fairest way, period.

You should also consider submetering your your laundry room, parking garage, concession stand, etc..  These areas are usually run by outside vendors.  In most cases, the amount of electric consumed in these areas is underestimated.  Why use a “guesstimate” when you can meter the exact amount.

Cooperative and Condominium

Submetering is good public policy and good for your building.

1. Submetering will save electricity.  Every building that implemented submetering has benefited from substantial  reductions in its electrical consumption.  This is not to suggest that anyone is a deliberate waster of electricity.  Submetering and the monthly receipt of an individual printed electric bill simply provides a means, and an incentive, to examine your individual monthly usage of electricity and reduce it.  Whether it is how you use your air conditioner, dishwasher, refrigerator, or lights, there is always room for conservation.  Metering is a sound ecological and sociological policy.

2. Submetering will allow the building to defer significant capital expenditures necessary to increase power riser capacity. If your building is 10+ years old,  it is possibly close to the point where the electric risers (which distribute electricity throughout your building) are operating at their capacity.  Unless something is done to cut electric consumption, substantial and expensive capital improvement will (probably) be needed within the next few years to enhance the capacity of these risers.

3. Submetering will allow the co-op/condo to properly charge individual cooperators/unit-owners for what they actually use. Currently, (if the following are applicable) professional apartments, parking garage, dry cleaners, spa, swimming pool, laundry rooms, and concessions get their electricity from your co-op/condo, at costs which were set in the absence of actual electrical usage  (metered information).  Submetering allows you to monitor the electricity used by these entities to insure that the co-op/condo is being adequately compensated or recompensed.

4. Submetering will reduce your monthly maintenance and increase the percentage of tax deductibility.  Some people think that  submetering will make your apartment less marketable.  Fortunately, this is not true as proven over the years.  The fact is that electricity, is no longer included in the maintenance, due to submetering, will bring your apartment more in line with the rest of the market.  This makes your apartment more attractive to prospective buyers, not less.

5. Most current methods of paying for electricity without metering are highly unfair to those who conserve electricity. (i.e.: Everyone pays the same amount per share or by square footage for electricity).  The effect is that heavy users of electricity are subsidized by those that conserve.  There is great diversity among the shareholders/unit-owners in your building.  There are some who occupy their apartments part time; others work at home full time; some live alone (sometimes in large apartments) while others have large families and live-in help; some have few appliances and use them sparingly; others have washers, dryers, whirlpools, hot water heaters, freezers and large refrigerators; yet all tenants pay for electric usage on a per share basis.  Totally unfair.

6. Electric usage and electric costs have increased.  With submetering, these higher costs will be borne by those shareholders/unit-owners  who incur them.  Without submetering, all the shareholders/unit-owners  "share" the bill and bear the cost for the energy abusers.  I am sure you want to pay your FAIR SHARE and the only way to do that is to submeter.

7. Your building may already be wired and ready for the implementation of submetering.  Therefore, the actual cost of implementation is relatively small and could be accomplished at very little expense to you.  The savings and rewards from submetering begin immediately and accrue to your benefit in the near future, and for the balance of your time as a cooperator or unit owner.

Here are some Questions and Answers to assist you in determining if your building is right for submetering.

What is submetering?

Submetering provides multi-unit residential buildings with individual unit meters so each resident will pay for the actual amount of electricity they individually use.  The building however, will still be “master-metered” and will retain its bulk rate service classification.  The result is two fold:

1. Lower cost (17-20%) for those who use less electricity

2. Motivation to conserve by those who normally waste electricity

3. Lower maintenance fees

How much can my building expect to save?

The amount of savings depends upon the size and type of building. It also depends upon how much the residents reduce their electric usage.  For example, residents of one 350 unit co-op, which we submetered, saved over $45,000.00 in their first year.  The amount of savings for your building will vary.  It will average 17-20%.

Will the meter reader have to enter each apartment to read the meter each month.

It depends on the equipment installation.  Usually there is no need to enter any individual apartments to read the meters.  Sometimes meters are located in electrical closets in the public halls, sometimes in the basement, sometimes in a storage closet.  Regardless of the meter installation, we read the meters electronically each month through a central data riser located in the building by telephone/modem.

How am I billed?

The building will continue to receive it's Utility Company bill every month (subject to change due to deregulation in the future).  Building management, or through the services of our meter reading/billing department, will bill individual units (for actual electrical usage) and supply an individually printed bill to each tenant (similar to a standard utility bill).  All charges for electric usage and allied services will be paid to Management as usual.

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The Benefits of Using Remote Reporting Electronic Meters

There are many meters on the market that can be installed in your co-op/condo.  They range from electromechanical meters (glass enclosed) to full-featured power quality metering/monitoring devices.  How do you determine which is best for your particular situation(s)?  Ask the following questions:

What is the experience and expertise of the manufacturing company?

What is needed to produce tenant billing information?

It’s important that you have all the information needed to produce monthly  bills.  If you don’t have the proper information (accumultated kWh), you can not produce a bill.  By contrast, when you invest money in Power Quality Meters, you are spending money for features and information that you will never need or use.  For example, you don’t need to know about “line harmonics” in order to produce a tenant bill.  So, why pay for it?

What is the meter accuracy?

You should only consider meters that meet or exceed ANSI Standards.  Why?  Because most state public utility commissions require meters to meet these standards for billing purposes.  However, there are different ANSI standards for electromechanical and electronic meters.  Electromechanical meters are allowed a tolerance of +/-3% reading (ANSI C12.1 Standards), full scale while electronic meters are allowed a tolerance of +/-1% reading, full scale (ANSI C12.16 Standards).  So, electronic meters that meet ANSI C12.16 Standards are 3 times more accurate than electromechanical meters.  However, there are some electronic meters on the market that only meet ANSI C12.1 Standards.  With today’s technology, it seems ridiculous to manufacture an electronic meter that only has the same accuracy as an electro-mechanical meter.  One of the benefits of electronic meters over electromechanical meter is the improved accuracy.  Why eliminate that  benefit to both you and your tenants?

What is involved in meter installation?

Installing electronic meters is easier, quicker, and less expensive.  Installation time is usually less than 1 hour per meter and can accomplished without turning off electric power (through the use of split-core current transformers).  By contrast, electromechanical meters are plugged into meter sockets.  The meter socket takes considerably more time to install and requires turning off power.  More time = more labor = higher installation costs.

How are meters read?

Electronic meters are read from a remote location using hard-wire, power line carrier, telephone, RF radio, or cellular phone communications.  By contrast, electromechanical meters are read manually.  Therefore, it is less costly to read electronic meters since people do not have to travel to and from your building(s) .  This is a very important point if you are considering hiring an outside company to perform your meter reading.  The cost of meter reading services should be more economical with electronic meters.  Here is another very important point that is often overlooked: installing remote reading electronic meters provides you with a “24-hour meter reader” at your building(s).  You may say, “Who Cares?”  Well, when tenants are calling your office with billing questions and are insisting that their bill is too high, you can provide them with a daily usage history of their electric consumption and demand.

Company reputation for meter reliability?

It is important to know the company behind the metering equipment.  For example: How long have they been in business?  How much experience do they have in manufacturing metering equipment?  Are the meters of the latest design, using the newest and latest electronic chipsets and electronic advances available?  Do they provide references?  These are some of the questions you should be asking.

Copyright May 2004 Computerized Meter Manufacturing Corp.  All rights reserved.