With ever increasing utility rates becoming the norm, conservation is becoming essential. Natural gas, electricity and water have all experienced rapid rate increases over the last several years. With ever increasing demand there is no reason to believe the cost will not continue to rise. A pro-active conservation stance is becoming a necessity!

Over the years, numerous studies have shown that submetering of utilities is one of the most effective ways to reduce consumption in multi-family properties. Submetering a master-metered building is unlike virtually any other energy conservation measure that can be undertaken by a building owner. Submetering as a conservation measure enlists both management and residents in the effort.

Submetering results in lower utility consumption and savings to the resident only to the extent that individual residents decide to reduce consumption. The financial savings flowing from the reduced consumption directly benefit both the property and the residents who conserve. Owners obtain a significant benefit from submetering by shifting the potentially volatile apartment utility component of their building’s budget to the actual users, the individual users. Residents gain by being able to control their utility usage and thus the costs of that usage.

It’s a simple fact, when the residents pay for utilities usage goes down. Passing utility costs through to the residents through submetering will add value to the property, help conserve natural resources and improve the bottom line. Experience shows that submetering typically reduces the consumption of a utility in apartments by 20-50%.

Submetering savings persist over time. Submetering savings have proven to be maintainable over long periods of time as demonstrated in a number of studies. Some likely reasons are: (a) that conservation is reinforced each month by the resident’s receipt of a utility bill; and (b) residents will invest in efficiency (e.g., more efficient lighting, small appliances, water saving devices) because they will reap the benefits directly.

Approximately 60 to 70% of residents benefit from submetering The only residents who fare worse under submetering than under other means of allocating utility costs are those who use excessive amounts. Those residents who find that their utility bills are excessive have the ability to reduce cost by reducing consumption. They have joined the vast majority of Americans who are directly metered, but they often retain a distinct advantage – they continue to pay at the bulk rather than the retail rate.

Submetering is eminently fair. Submetering simply restores the “pay for what you use” concept. A recent study by Con Edison revealed that 20-25% of total apartment usage is consumed by only 10% of the residents, yet under master-metering, these excessive users pay the same as other residents.

Individual apartment consumption has been shown to vary by a factor of as much as 10:1, and, typically, by approximately 5:1 in apartments of the same size in the same building! From the point of view of fairness, submetering is equally beneficial to all buildings regardless of type.

Submetering benefits owners – Submetering largely eliminates a volatile, variable, and difficult-to-control factor from a building’s operating budget-apartment utility usage costs. Whether the building is a rental, cooperative, or condominium, owners can better predict costs when the only utility usage to be considered is for common areas under management control.

Submetering benefits utilities and society – Submetering benefits utilities and society in the same way: by reducing consumption and deferring the need to site, build, or otherwise acquire additional capacity, as well as reduce the use of fossil fuels (e.g., oil, natural gas, coal), Reducing fossil fuel use is a giant step toward enhancing the environment by improving air quality. Decreasing our dependence on foreign oil clearly benefits all Americans.

By: Paul Cronan