What is electricity submetering?
Electricity usage in multi-unit residential buildings (e.g., rental apartment, condominium, cooperative) can be metered in three ways: master metering, direct metering and submetering.
When a building uses submetered electricity, electricity is received through a utility-owned master meter, but electricity use in each unit is measured by building-owned meters. The building owner then bills electric charges to residents based on their actual consumption.
In a master metered building, the utility supplies electricity to the entire building through a utility-owned meter. Individual units are not metered, meaning actual consumption cannot be determined or used as a basis for billing electricity charges. Instead, the building owner pays the electric charges based on the master meter reading, with these costs being included in residents’ rent or common charges without regard to any individual resident’s electricity consumption. In a direct-metered building, electricity is supplied to each unit through a utility-owned meter, and residents receive their electricity bill directly from the utility.
What are the benefits of submetering electricity?
According to a report published by the New York State Energy Research and Development Authority (NYSERDA), residential electrical submetering combines the best of both master metering and direct metering. Specifically, electricity is billed directly to the building owner at the less expensive general-large or multiple dwellings-redistribution rate, while billing to the resident is based on actual use up to the utility’s direct-meter rate, thus encouraging energy conservation and increasing the building’s profitability. Additionally, NYSERDA has conducted a number of studies and demonstration projects that confirm short-term and long-term benefits of submetering electricity, including: reducing annual energy use and increasing profitability; improving resident satisfaction and control of individual energy use; boosting efficiency, safety, and comfort in the building; increasing long-term property value; and allowing for participation in demand response or cogeneration. Despite these proven benefits, many building owners are not taking advantage of submetering because of the complex legal environment that needs to be navigated to secure the regulatory approval necessary to submeter electricity and the ensuing compliance obligations.
Are you interested in submetering an existing or newly constructed multi-unit residential building but unfamiliar with the regulatory landscape to obtain submetering approval?
The Harris Beach team of energy lawyers can assist you in applying to and obtaining approval to submeter electricity from the Public Service Commission (PSC). We understand the procedure for obtaining PSC approval. In fact, our Energy legal team has successfully obtained submetering approval for hundreds of buildings throughout New York state.
Already submetering? We will make sure you are in compliance.
For property owners who are currently submetering electricity in residential buildings, our energy lawyers can provide guidance to ensure compliance with the Public Service Law, including the Home Energy Fair Practices Act (HEFPA), and the PSC’s submetering regulations (16 NYCRR Part 96), which now contain provisions for monetary penalties for noncompliance. We can also help you handle any resident complaints filed with the New York State Department of Public Service’s Office of Consumer Services.