Otis Singleton
Submetering in Texas is a complex topic that requires knowledge of specific laws and regulations. Texas has strict regulations surrounding utility management, including rules for billing methods, common areas, late fees, and lease information. For example, submetered costs are calculated by adding electricity usage charges and any taxes, then dividing by the total kWh used to find an average cost per kWh. This average cost per kWh is then multiplied by the kWh consumption of the tenant. Texas also requires registration with the Public Service Commission (PSC). Submetering involves installing equipment to measure and bill each unit's utility usage, and it has been used since the 1920s. Landlords must keep records of electric bills and calculations of average utility costs, and tenants have the right to inspect these records. Disputes between tenants and landlords regarding utility bills should be investigated and resolved within 30 days. Texas law also outlines specific information that must appear on electric bills for submetered tenants.
| Characteristics | Values |
|---|---|
| Legality | Legal from the standpoint of the NEC and electrical codes; local tenant/landlord laws may differ |
| Requirements | Meters must be properly labelled and comply with local codes |
| Registration | Required with the Public Service Commission (PSC) |
| Applicable to | All types of real estate, including apartment communities, mobile home parks, townhomes, condominiums, and shopping centers |
| Billing | Calculated by adding total charges for electricity usage and any tax, then dividing by the total number of kWhs used |
| Information on Bill | The Texas Public Utility Commission (PUC) outlines what must appear on the bill |
| Record-keeping | Property managers must maintain records of electric bills, submetering reports, and submetering tests for the current month and previous 12 months |
| Water Submetering Charges | Limited to the cost per gallon, applicable taxes and surcharges, a late fee, and a service charge |
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What You'll Learn
Submetering regulations and unique laws in Texas
Submetering in Texas is subject to unique laws and regulations. The state is highly regulated, with specific rules for billing methods, common areas, late fees, back billing, and lease information. Texas law requires registration with the Public Service Commission (PSC). Submetering involves installing equipment to measure and bill each unit's utility usage, including water, sewer, gas, and electricity. All types of real estate, such as apartments, mobile home parks, and shopping centers, can be submetered.
The Texas Water Code plays a significant role in submetering regulations. It requires that each unit in a building with five or more residential units constructed after January 1, 2003, have either an individual water utility meter or submeter. The code also limits submetering charges on tenants to the cost per gallon and applicable taxes and surcharges charged by the water company. Late fees of up to 5% of the late bill and a service charge of up to 9% related to submetering costs are permitted. Property owners are mandated to maintain detailed records and make them available to tenants, ensuring that submetering equipment meets accuracy, testing, and record-keeping standards.
Additionally, Texas law encourages submetering to promote water conservation. The utility commission can authorize building owners to use submetering equipment with integrated radio-based meter reading systems and remote registration, adhering to plumbing standards and accuracy requirements.
Submetering apartments are prevalent in Texas, and companies like National Exemption Service (NES) specialize in providing submetering services to various apartment buildings in multiple cities across the state. NES has dedicated compliance staff to stay updated with Texas's evolving regulations.
While submetering is generally legal in Texas, local tenant/landlord laws may impose additional restrictions. It is important to consult the relevant state and local regulations before implementing submetering in any property.
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Rights of submetered tenants and landlords
Submetering in Texas requires knowledge of the state's specific regulations and laws surrounding utility management. Texas is a highly regulated state, with laws in place governing information required on bills, billing methods, common areas, late fees, back billing, and lease information. Submetered tenants in Texas have special rights, and landlords have certain responsibilities.
Rights of submetered tenants
Submetered tenants in Texas have the right to "quiet enjoyment", a legal term meaning that a landlord cannot evict a tenant without cause or otherwise disturb their right to live in peace and quiet. If other tenants are causing a disturbance, a submetered tenant should complain to the landlord. Tenants also have the right to inspect their property manager's records of the complex's electric bills, submetering reports, and submetering tests for the current month and the previous 12 months. These records should also include how the average cost of electricity was calculated. If a landlord locks a tenant out of their leased premises, the tenant may recover possession of the premises. If a landlord interrupts utility services, the tenant may obtain relief. If a submetered tenant wishes to dispute something their landlord is doing, they must first file a complaint with the owner. The landlord then has 30 days to respond. If the tenant is unhappy with the response, they can call the PUC's Customer Protection Division or visit their website.
Rights of submetered landlords
Landlords in Texas have the right to charge submetered tenants a late fee of up to 5% of the total amount due. Landlords can also request that water companies install individual meters in their buildings, and the water company can charge a reasonable cost for this. If the water company deems that installing these meters is not feasible, the law requires the landlord to install a plumbing system that is compatible with sub-meters.
Rights of both parties
Both the landlord and the tenant should initial any changes to the lease agreement. For example, many standard leases prohibit pets, but a landlord may be willing to accept a pet if the tenant puts down extra money as security.
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Billing methods and charges
Texas has specific regulations in place for billing methods and charges, which are outlined by the Texas Public Utility Commission (PUC). These regulations cover information that must be included on bills, billing methods, common areas, late fees, back billing, and lease information.
For submetered electric billing, the total charges for electricity usage and any tax are added up and then divided by the total number of kWh used, giving an average cost per kWh. This average cost is then multiplied by the kWh consumption of the tenant. Landlords are not permitted to calculate charges differently from this method, or they may be charging tenants for electricity they are not using. Late fees are also regulated, with a maximum charge of 5% of the total amount due.
Property managers are required to keep detailed records of electric bills, calculations of the average cost of electricity, submetering reports, and submetering tests for the current month and the previous 12 months. Tenants have the right to inspect these records during normal business hours or at another agreed-upon time.
In cases where submetering is not an option, Ratio Utility Billing Systems (RUBS) may be used to allocate utility costs for water/sewer, gas, and electricity. This system utilizes formulas to distribute costs among tenants.
Companies such as Oates Energy provide utility billing and submetering solutions, offering billing support for residents' questions and concerns. They also provide converged billing services, allowing clients to bill residents for various services such as rent, utilities, and other fees through a single bill.
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Installation of submetering systems
Submetering in Texas requires knowledge of the state's strict regulatory laws surrounding utility management. The state has specific regulations in place for information that must be included on bills, billing methods, common areas, late fees, back billing, and lease information. Texas also requires registration with the Public Service Commission (PSC).
Submetering involves the installation of equipment to measure and bill each unit's water/sewer, gas, and electric use. Submetered costs are calculated by adding the total charges for electricity usage and any tax and then dividing that by the total number of kWhs used. This gives an average cost per kWh, which is then multiplied by the kWh consumption.
When installing submetering systems, it is important to consider the unique laws and regulations of the state. National Exemption Service (NES) is one of the largest submetering companies in the USA and provides meters at cost, which is uncommon in the industry. They also offer leak detection services for an additional fee.
Oates Energy is another company that designs and installs customized submetering systems, tailored to the type of metering equipment and billing policies requested by the client. They provide billing support for resident and tenant questions and issues, as well as converged billing services for all resident billing.
It is worth noting that for submetering multi-unit property owners, the Texas Water Code limits submetering charges to the cost per gallon and applicable taxes and surcharges charged by the water company, a late fee of up to 5%, and a service charge of up to 9% related to submetering for each unit. Property owners are also required to maintain adequate records and make them available to tenants.
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Disputed bills and complaints
If you are a submetered tenant in Texas, the Texas Public Utility Commission (PUC) outlines exactly what must appear on your electric bill. If you receive a bill that seems exorbitant, you can dispute the excess amount. While the company is reviewing your claim, you typically won't be expected to pay the disputed amount. However, you are still responsible for paying the part of the bill that is not in dispute.
If you think there has been a mistake with your bill, you can dispute it directly with the company. Have your account number, current bill, and previous bills handy. If the bill was based on an estimate, request that the company takes a proper reading. If the estimate seems too high, you can ask the company to come back and do an actual meter reading. For an incorrect bill based on a reading, ask them to test the meter. If the meter turns out to be inaccurate, you can negotiate a fair price for the bill.
In the case of a dispute between a tenant and an apartment house owner regarding any bill, the apartment owner is required to investigate and report the results to the tenant within 30 days of being notified of the dispute. If you are not satisfied with the outcome of the investigation, you can file a formal complaint.
If you have a billing dispute, you can also file a consumer complaint with the Office of the Attorney General of Texas. The Public Utility Commission of Texas Customer Hotline can be reached toll-free at 1-888-782-8477. Each state has a public utilities commission that is responsible for regulating and monitoring the performance of the state's utility companies. The commission may conduct further tests to verify the meter's accuracy.
If you are continuously unable to pay your electricity bill on time, you may want to consider switching to a prepaid Texas electricity plan. These pay-as-you-go plans only allow you to use as much electricity as you have already paid for. You can also ask for a deferred payment plan or a levelized or average payment plan where you pay the same amount each month.
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Frequently asked questions
Yes, sub-metered electricity is legal in Texas. Submetering involves the installation of equipment to measure and bill each unit's water/sewer, gas, and electric use.
Texas has specific regulations in place for information required to be on the bills, billing methods, common areas, late fees, back billing, and lease information. Texas also requires registration with the Public Utility Commission (PUC), which outlines what must appear on the electric bill for submetered tenants.
All types of real estate can be submetered in Texas, including new construction and existing properties, apartment communities, mobile home parks, townhomes, condominiums, and shopping centers.
