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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 guess 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.
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
Copyright
August 15, 2010 Computerized Meter Manufacturing
Corp. All rights reserved.