Wiktor Wise
If you own or manage a multi-family property, you may need to implement a system for managing shared utility meters. There are several ways to set up electrical service and billing for multi-family residences. One option is to install submeters, which are individual meters that show the exact energy usage of each unit. Another option is to use a Ratio Utility Billing System (RUBS), which divides the electrical bill between units based on square footage and occupancy. Direct metering is another possibility, where each unit has its own electrical meter installed directly by the utility company. Finally, if the building has a single shared meter, the owner can negotiate lease terms to bring the building into a fair utility-sharing arrangement.
| Characteristics | Values |
|---|---|
| Multi-metering | Each unit has its own electrical meter installed directly by the utility company |
| Sub-metering | Landlord installs individual submeters below the master meter to show the exact energy usage of each unit |
| Ratio Utility Billing System (RUBS) | A formula used to divide the electrical bill of a multi-family building between the units, usually based on square footage and occupancy |
| Master-metering | One meter for the whole building, installed by the utility company, used to determine the total electrical service used by the building |
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What You'll Learn
- Submeters: Landlords can install submeters to monitor energy usage for each unit
- Direct metering: Each unit has its own meter installed by the utility company
- Ratio Utility Billing System (RUBS): A formula divides the electrical bill based on square footage and occupancy
- Master metering: One meter for the whole building, determining total electrical service usage
- Shared utility meters: The owner decides a fair utility-sharing arrangement for all tenants
Submeters: Landlords can install submeters to monitor energy usage for each unit
Submetering is a useful method for landlords to monitor energy usage in multi-family buildings and ensure accurate billing. Submeters can be installed in each unit to measure the energy consumption of specific equipment or systems, such as chillers, air handling units, or electric water heaters. This allows for a more detailed analysis of energy usage beyond what a single energy meter for the entire building can provide.
By submetering, landlords can track and monitor the energy usage of each space separately. This enables them to evaluate the energy efficiency of different units and identify areas where energy savings strategies may be implemented. For example, if a unit owner has been overcharged for electricity, they will immediately notice the difference with submetering and may be incentivized to reduce their energy consumption.
Additionally, submeters can help identify any issues with equipment health and performance by measuring their electricity usage. Landlords can track when specific equipment is running and determine if it is functioning as expected or offline. This level of detail can aid in proactive maintenance and optimize energy usage across the building.
In some cases, submeters are essential for accurately benchmarking building energy usage. For instance, in buildings with mobile phone antennas or electric vehicle supply equipment, submeters can exclude the energy used by these sources, providing a clearer picture of the building's actual energy consumption.
Government incentives and programs, such as the New York State Energy Research and Development Authority's (NYSERDA) Energy Reduction in Master Metered Buildings (ERMM) Program, also encourage the adoption of submetering. The ERMM Program offers to fund up to 50% of the cost of installing submeters in eligible master-metered multifamily buildings with more than five units where tenants do not currently pay for their electricity usage.
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Direct metering: Each unit has its own meter installed by the utility company
If you own a multi-family property and want to separate the electricity, one option is to use direct metering. This is when each unit has its own electrical meter, installed directly by the utility company. This is a convenient option if you want to keep track of your electrical usage as charges come directly from the provider.
Direct metering is a good way to manage costs and energy usage and to ensure tenants are fairly charged for their electricity. It also provides tenants with a transparent view of their energy usage and clear financial incentives to reduce it. If you are trying to reduce your usage, it is worth noting that sometimes utility companies will use the previous month's usage to estimate charges if they are unable to read the meter.
To set up direct metering, you will need to call the utility company to request a new meter. This process can take a while but it is reportedly not too expensive. It is also worth noting that, depending on the wiring of your property, you may need to add a new breaker box and switch over the wires for the circuits you want on the new meter.
Direct metering is not the only option for managing utility bills in a multi-family property. Submetering is another popular choice, where individual submeters are installed by the landlord below the master meter. This allows the landlord to monitor the exact energy usage of each unit and bill tenants accordingly. Alternatively, a Ratio Utility Billing System (RUBS) can be used to divide the electrical bill between units, usually based on square footage and occupancy.
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Ratio Utility Billing System (RUBS): A formula divides the electrical bill based on square footage and occupancy
Ratio Utility Billing System (RUBS) is a cost-effective and fair alternative to submeters. It is a utility management solution that divides the bill among residents based on certain criteria. The biggest advantage of RUBS is that it allows a management company to recover their utility costs without the expense of installing meters.
RUBS calculates each tenant's utility charges based on predetermined criteria, such as square footage, occupancy, or unit count, rather than individual meter readings. The specific calculation method may vary, but the general steps for calculating RUBS are as follows:
- Calculate the total utility expenses for the property during a specific billing period. These utilities can include water, sewer, trash, gas, electricity, and any other utilities covered by the RUBS system.
- Assign allocation factors to each unit based on factors that influence utility usage, such as square footage, the number of occupants, the number of bedrooms, or a combination of factors. These factors should be fair and reasonable, reflecting the relative usage of utilities by each unit. For example, larger units or units with more bedrooms typically consume more utilities than smaller units or those with fewer bedrooms.
- Calculate each tenant's share of the total utility costs based on the chosen allocation method.
It is important to note that the RUBS formula is not an exact measurement of individual utility usage. It is an estimation based on predetermined factors. The legality of using RUBS varies by location, with some regions having specific regulations in place that govern its application. Property owners should consult local housing laws and regulations and seek legal advice when implementing the RUBS system to ensure compliance.
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Master metering: One meter for the whole building, determining total electrical service usage
Master metering is a system in which a single meter measures the electrical service usage of a whole building. The utility company charges the building at a bulk rate, and the building management then charges individual units based on a flat fee, the apartment's size, or the number of shares the unit owners have in the co-op.
Master metering was more common in the 1950s and 1960s when electrical costs were lower. Today, it may result in unfair billing, as residents who consume different amounts of electricity are charged the same amount.
To address this issue, some jurisdictions, such as New York and California, allow master-metered buildings to install submeters to measure electricity usage in individual apartments or circuits. This way, residents pay for their actual usage, and the building can still benefit from the utility's bulk rate. Submetering can also reduce a building's overall electrical usage by up to 25%.
However, some older buildings with outdated electrical wiring may find it challenging to install submeters without rewiring the entire building. Nevertheless, professionals claim that, in most cases, submetering is possible with some adjustments.
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Shared utility meters: The owner decides a fair utility-sharing arrangement for all tenants
When a multi-family property has shared utility meters, the owner or landlord must decide on a fair utility-sharing arrangement for all tenants. This process is governed by the leases of the tenants, and the owner may need to negotiate new lease terms or wait until new leases are executed to implement a cohesive utility policy.
One option for managing shared utility meters is to install submeters for each unit. Submetering is when the landlord installs individual submeters below the master meter that show the exact energy usage of each unit. These submeters are monitored by either the landlord or a third-party company, and the landlord will bill tenants based on their usage every month. Submeters provide tenants with a transparent view of their energy usage and clear financial incentives to reduce their energy usage. However, submeters are the most costly solution for landlords, as they require more labour to install and maintain.
Another option is for the landlord to use a Ratio Utility Billing System (RUBS). This system divides the electrical bill of a multi-family building between the units, usually based on square footage and occupancy. A RUBS system is useful to landlords because it allows them to recoup the real costs of energy, but it may not incentivize tenants to reduce their electricity usage since any savings will be divided between all units. RUBS is generally considered the most cost-effective and fair method for landlords to use when installing submeters is not an option.
Direct metering is another possibility, where each unit has its own electrical meter installed directly by the utility company. With direct metering, charges come directly from the provider, although they may be based on estimated charges rather than actual usage.
Finally, the building may be master metered, meaning there is one meter for the whole building, installed by the utility company, which determines the total electrical service used by the building.
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Frequently asked questions
Submetering is when the landlord installs individual submeters below the master meter to show the exact energy usage of each unit. The landlord or a third-party company monitors these submeters and bills tenants based on their usage every month.
Direct metering is when each unit has its own electrical meter installed directly by the utility company. This means that the charges are coming directly from the provider.
A RUBS system is a formula used to divide the electrical bill of a multi-family building between the units, usually based on square footage and occupancy.
Submetering provides tenants with a transparent view of their energy usage and clear financial incentives to reduce their energy usage. It is also the most accurate and fair method for billing tenants. However, it is the most costly solution and requires more labour to implement.
