Study of Submetering

in HUD-Funded Housing

Disclaimer

The contents of this report are the views of the author and do not necessarily reflect the views or

policies of the U.S. Department of Housing and Urban Development or the U.S. Government.

Study of Submetering in HUD-Funded Housing

Prepared for

U.S. Department of Housing and Urban Development

Office of Policy Development and Research

Prepared by

Adam Szlachetka

Steven Winter Associates, Inc.

Tom Sahagian

December 2023

Acknowledgments

The authors wish to thank Mike Blanford at HUD for his oversight and guidance over the course

of this project. The authors also wish to thank the following people for their contributions to the report:

Bruce Becker, Becker + Becker

Andy Bilich, Independent Consultant

Les Bluestone, Blue Sea Development Co.

Rory Christian, Concentric Consulting Group

Bobby Coleman, Seattle Housing Authority

Peter Curley, L+M Fund Management

Mike Early, HUD

Joseph Friend, Synergy Utility Billing

Cynthia Gardstein, Steven Winter Associates, Inc.

Malcolm Guy, Council of Large Public Housing Authorities

Tom Horner, Water Management, Inc.

Troy Lewallen, H2O Degree

Leanna McKeon, Chicago Housing Authority

Adam Meier, Housing Partnership Network

Don Millstein, H2O Degree

Lee Pratter, Chicago Housing Authority

Wade Romberger, Pennsylvania Housing Finance Agency

Janelle Scott, Council of Large Public Housing Authorities

Josh Shaffer, Riseboro Community Partnership

Shreya Singh, Related Midwest

Sarah Wick, Related Midwest

Table of Contents

Executive Summary ....................................................................................................................... vi

Introduction ..................................................................................................................................... 1

Master Metering and Direct Metering ......................................................................................... 2

Submetering ................................................................................................................................ 3

HUD Background ........................................................................................................................ 3

Benefits of and Barriers to Submetering ......................................................................................... 4

Benefits ........................................................................................................................................ 5

Barriers ........................................................................................................................................ 6

Submetering Regulations ................................................................................................................ 7

50-State Review of Submetering Regulations ............................................................................ 8

Federal Guidance and Regulations .............................................................................................. 8

Notable Findings Regarding Submetering ................................................................................ 10

HUD Guidance and Regulations ................................................................................................... 13

Utility Allowances ..................................................................................................................... 13

Energy Performance Contracts .................................................................................................. 13

Impact on Public Housing Authority Subsidy ........................................................................... 13

24 CFR 965 ............................................................................................................................... 14

Rental Assistance Demonstration-Specific Regulations ........................................................... 14

Utility Allowances and Form HUD-52722 ............................................................................... 14

Capital Fund Guidebook (Regarding Master Metering) ........................................................... 15

Technical Considerations .............................................................................................................. 15

Submeter Technology ................................................................................................................ 15

Electric Submeters ..................................................................................................................... 15

Electric Riser Topologies .......................................................................................................... 16

Water and Wastewater Submeters ............................................................................................. 19

Natural Gas Submeters .............................................................................................................. 22

Steam Submeters ....................................................................................................................... 23

Thermal Submetering ................................................................................................................ 23

Billing Systems ......................................................................................................................... 24

Energy Information Systems ..................................................................................................... 24

Installation Challenges .............................................................................................................. 24

Best Practices ................................................................................................................................ 25

Planning and Design.................................................................................................................. 25

Cost Effectiveness ..................................................................................................................... 26

Tenant Outreach ........................................................................................................................ 27

Case Studies .................................................................................................................................. 28

Seattle Housing Authority ......................................................................................................... 28

RiseBoro Community Partnership ............................................................................................ 29

The Related Companies/Chicago Housing Authority ............................................................... 30

Conclusions and Recommendations ............................................................................................. 32

Appendix A: Additional Reading ................................................................................................. 34

Federal Guidance ....................................................................................................................... 36

U.S. Department of Housing and Urban Development Guidance ............................................ 37

Environmental Protection Agency ............................................................................................ 37

Department of Energy ............................................................................................................... 37

State and Local Resources ......................................................................................................... 38

Savings Potential ....................................................................................................................... 40

Appendix B: 50-State Submetering Regulation Review .............................................................. 44

Region 1 .................................................................................................................................... 44

Region 2 .................................................................................................................................... 49

Region 3 .................................................................................................................................... 52

Region 4 .................................................................................................................................... 57

Region 5 .................................................................................................................................... 68

Region 6 .................................................................................................................................... 73

Region 7 .................................................................................................................................... 78

Region 8 .................................................................................................................................... 81

Region 9 .................................................................................................................................... 85

Region 10 .................................................................................................................................. 89

References ..................................................................................................................................... 92

List of Exhibits

Exhibit 1: Whole-Building Electricity Savings Following Submetering ....................................... 5

Exhibit 2: Average Electricity Savings Following Submetering .................................................... 6

Exhibit 3: HUD Regions ................................................................................................................. 8

Exhibit 4: States That Permit Submetering by Type of Utility and HUD Field Office Region .... 11

Exhibit 5: Socket-Type Electromechanical Submeter .................................................................. 16

Exhibit 6: NonSocket Solid State Electric Submeter .................................................................... 16

Exhibit 7: Shared Riser ................................................................................................................. 17

Exhibit 8: Shared Riser With Distribution Panels ......................................................................... 17

Exhibit 9: Dedicated Riser ............................................................................................................ 18

Exhibit 10: Multiple-Input Electric Submeter Module ................................................................. 18

Exhibit 11: Solid-Core CTs ........................................................................................................... 19

Exhibit 12: Split-Core Current Transformer (CT) ........................................................................ 19

Exhibit 13: Electrical Meter Type Summary ................................................................................ 19

Exhibit 14: Oscillating-Piston Meter ............................................................................................ 20

Exhibit 15: Multijet Meter and Impeller Wheel ........................................................................... 20

Exhibit 16: Small Turbine Meter .................................................................................................. 20

Exhibit 17: Typical Multijet Meter Accuracy Curve .................................................................... 21

Exhibit 18: Water Meter Type Summary ...................................................................................... 22

Exhibit 19: Diaphragm Gas Submeters With Wireless Data Transmitters ................................... 22

Exhibit 20: Natural Gas Meter Type Summary ............................................................................ 22

Exhibit 21: Thermal (Btu) Metering System in a London, England Apartment ........................... 23

Exhibit 22: Btu Meter ................................................................................................................... 24

Exhibit 23: Submetering Costs and Savings ................................................................................. 26

Exhibit 24: Submetering Simple Payback .................................................................................... 27

Exhibit 25: Our Lady of Lourdes Exterior .................................................................................... 30

Exhibit 26: Lathrop Homes Phase IA Exterior ............................................................................. 32

Executive Summary

Submetering, the practice of metering the energy or water consumption of individual apartments

in buildings where consumption at the apartment level is not currently measured, is becoming more desirable in the public housing sector as housing agencies and owners seek ways to reduce

utility costs. Numerous studies have shown that when customers are shifted from master

metering to submetering, consumption declines enough to recover the cost of the submetering system in a reasonable time. Once that initial cost has been recouped, the building owner

continues to enjoy reduced utility costs. As utility cost pressures increase, more and more HUD

assisted housing providers will find submetering worth exploring not only in new or gut rehab construction but also as a retrofit option. The technology is proven and sophisticated, and the

potential for substantial savings is real. This guidebook is intended to assist building owners

considering the switch to submetering by presenting applicable federal and state policies and

guidance related to utility submetering and assessing currently available submetering systems applicable for utilities (e.g., electricity, natural gas, and water utilities).

Historically, utility metering evolved from master meters, which track total consumption for

entire buildings, to more granular individual metering. Master metering was originally favored for its cost efficiency, but rising energy costs and policies such as the Public Utility Regulatory

Policies Act (PURPA) of 1978 encouraged individual metering to promote energy conservation.

Submetering allows tenants to be billed directly for their utility consumption, encouraging energy and water conservation and often leading to significant reductions in energy usage. It also

enhances building management by helping property managers detect system inefficiencies and

malfunctions early, which can reduce maintenance costs and improve tenant comfort. In addition,

submetering can reduce overall utility expenses by promoting more responsible consumption and distributing bulk rate savings to tenants.

Despite its advantages, submetering presents several challenges. The installation and

maintenance of submetering systems can be expensive, particularly in existing buildings where retrofitting is complex. Tenants may resist the change due to concerns about increased costs,

making effective communication and adjustments to utility allowances critical. Implementing

submetering also involves operational hurdles, such as accessing individual apartments for installation and managing billing systems, further complicated by the diverse regulatory

landscape across states and local jurisdictions.

Federal regulations under 24 CFR 965 mandate individual utility metering for HUD-funded

properties except in cases in which it is impractical or financially unjustifiable. Public housing agencies with master meters are required to conduct cost-benefit analyses every 5 years.

Conversion costs can be funded through operating funds or modernization projects if necessary.

In Rental Assistance Demonstration properties, initial utility allowances are based on Public and Indian Housing-approved figures, with future adjustments following multifamily housing

policies.

Recent technological advancements have improved the accuracy and affordability of submeters. Electric submeters, ranging from traditional electromechanical models to smart meters with real-

time data capabilities, have become increasingly accessible. Water submetering, although less

common in the United States, offers significant benefits in managing consumption and detecting

leaks. Natural gas submetering is feasible in high-consumption buildings, but steam submetering is generally impractical due to its cost and complexity. Thermal submetering, though rarely used in the United States, is more common in Europe, where it measures space-heating energy in

buildings with hydronic heating systems.

Retrofitting existing buildings with submeters presents considerable challenges due to varying

building layouts and materials. Successful implementation requires careful planning, the selection of appropriate hardware, accurate data collection methods, and reliable billing systems.

Ensuring that hardware meets accuracy standards and is compatible with existing infrastructure

is essential for effective submetering.

The cost-effectiveness of submetering depends on building type and utility costs. Public-sector

investments tend to accept longer payback periods compared with the private sector. Introducing

submetering requires sensitive handling, especially where tenants were not previously responsible for utility payments. Comprehensive resident education and pilot projects can help

demonstrate potential savings and alleviate concerns before a broader rollout.

Utility submetering offers significant opportunities to improve energy efficiency, reduce costs,

and enhance financial performance in public and multifamily housing. However, overcoming financial, operational, and regulatory challenges requires strategic planning, effective

communication with residents, and a thorough understanding of the applicable regulations. When

implemented properly, submetering can contribute to more sustainable and efficient utility management in affordable housing.

Introduction

This report seeks to lay a foundation to understand the desirability, mechanics, value,

effectiveness, and benefit to tenants, if any, of shifting certain utility costs from public housing (PH), privately owned multifamily (MF) assisted housing, and Rental Assistance Demonstration

(RAD) housing units to tenants through the installation of utility submetering systems.

This report documents the current state of submetering regulations throughout the United States, provides guidance and recommendations on the benefits and complexities of the use of

submetering for new and existing multifamily buildings, includes preliminary findings relating to

submetering system costs, and considers existing U.S. Department of Housing and Urban Development (HUD) requirements concerning operating funds, capital funds, and utility

allowances. The report references relevant publications focused on design and retrofit strategies,

building management procedures, changes in resident behavior, and other approaches that can

contribute to significant reductions in energy and water usage.

Traditional utility metering models were designed to enable a utility to recover costs from

customers. With a single meter, a utility can capture consumption data in a single apartment, an

entire building, or a campus with multiple buildings; however, utility metering was not always a given. In 1917, the costs of maintenance, meter reading, and bookkeeping were collectively

deemed too high to make servicing small customers profitable. Many utilities advocated for a flat

rate for customers, with meters provided only to the largest customers. In New York, for example, the water utility declared that water was “free” and expensive metering was

unnecessary when a flat annual or quarterly charge could cover all system costs.

This single-meter model, developed during a period of low energy prices and limited focus on

indoor and outdoor environmental issues, has worked well for utilities but is now inadequate for customer operational needs and utility conservation measures.

Most buildings and campuses built before the 1970s used a single utility meter to track

consumption for each utility. Such single utility meters, also known as primary utility meters or master meters, were used to capture aggregate consumption data, which formed the basis of the

bills provided to customers.

This practice began to change in the late-1970s. Rising domestic consumption of oil, coupled with a decline in domestic oil production and an increased reliance on imports, led to increases in

energy prices. In response, the federal government advanced numerous measures to promote

energy efficiency through the passage of the Public Utility Regulatory Policies Act (PURPA) of

1978.

PURPA was developed to encourage equitable rates to electric customers, greater conservation of

energy supplied by electric utilities, and optimization of the facilities and resources used by

electric utilities. Increasing the level of granularity of customer energy data was viewed as essential to meeting these goals, and many policy changes and standards were suggested,

including the prohibition of master metering in new construction. Many states adopted this

suggestion, although provisions in PURPA allowed a state government to take state laws into account when determining if the new standards were applicable and how to implement them.

[PURPA] called for state regulators to require most new

apartments to have individual electricity meters. But it also

provided that “nothing in this subsection prohibits any state

regulatory authority or nonregulated electric utility from making a

determination that it is not appropriate to implement any such standard, pursuant to its authority under otherwise applicable state

law.” States could thus interpret the mandate for individual

electricity meters in new buildings as a suggestion rather than a rule, and not all states adopted the policy.

—Michael Carliner

Joint Center for Housing Studies of Harvard University

With the passage of PURPA and the subsequent prohibition of master metering of electricity in new construction by many states (discussed in Submetering Regulations in this report), the

traditional utility metering model began to change. Master metering in new construction began to

decline, and energy was no longer too cheap to meter, forcing utilities and building owners to reconsider the need for metering and to consider options for capturing increasingly granular

consumption data.

The growing need for responsible fiscal management, efficient building operation, and proper prioritization of building improvements has led to significant advances in the types of meters

available and the quality, type, and granularity of data collected. Advances in communication

technology have further enabled remote tracking of consumption in increasingly smaller time increments, making meters an increasingly affordable and cost-effective option to install and

maintain.

Master Metering and Direct Metering

Master-metered buildings are defined as having a single utility meter, measuring and billing for the entire building instead of each apartment. Master metering is a common practice among all

utility types. For some utilities, particularly water utilities, it was sometimes considered cost-

effective to bill a flat rate to cover the costs of infrastructure rather than invest in the installation and continued maintenance of meters for each user.

Utility infrastructure is typically considered to be upstream of the meter; piping brings in water

from the utility, then water flows downstream to meters and then distribution piping within the building to reach individual spaces. Master metering meant that utilities could avoid the cost and

responsibility associated with distribution systems within a building. When coupled with costs

associated with keeping and maintaining consumption records, issuing bills to a multitude of

customers, and the potential for nonpayment and subsequent collection efforts, metering individual apartments was often not considered an appealing option.

Building owners could similarly benefit from master metering. Master-metered multifamily

buildings often allow the sale of electricity, gas, and water at wholesale rates lower than typical retail rates. For an owner to benefit from wholesale rates, most utilities require a single meter and

a single bill. For many building owners, the benefits of the bulk rate served as a competitive

advantage to their individually metered peers. Buildings with master meters often offered tenants “free utilities” and were able to aggregate utility costs in tenant rent, thus increasing the owner’s profitability.

On the surface, master metering has elements of economic attraction for all participants:

• For the landlord or building owner, it provides wholesale rates for utility services and a

potential marketing advantage compared with their individually metered competition.

• For the utility, it reduces installation costs and monthly operational costs (billing, meter

reading, maintenance, etc.).

• For the resident, the perceived value of “free” utilities may exceed the actual cost

embedded in rent. Also, single rent statements without variable utility costs make

budgeting easier.

Costs per kilowatt-hour under these promotional schemes were as little as one-fourth the prevailing rate for individual residences. As

the cost of electricity thus became nearly negligible, many

apartment and office operators took advantage of the “All Utilities Included” marketing scheme.

—Gordon Gross

UMR-MEC Conference on Energy

Tenants in some buildings may be individually metered by the utility. These tenants are direct-metered and traditionally subject to more costly retail rates than master-metered customers.

• Tenants are customers of the utility.

• Tenants are eligible for state incentives because they are utility customers.

• Service shutoff and disconnection are at the discretion of the utility.

Submetering

Submetering is the installation of additional metering devices downstream of a master meter that can measure the amount of a utility consumed by a specific entity. For multifamily housing, a

master meter typically measures consumption for a campus of buildings or a single building.

Submeters can measure the energy (or water) use of an individual apartment.

Submeters can also measure the specific consumption of building systems, such as heating, hot

water, or central air-conditioning, which allows building operators to detect system malfunctions

and make cost-effective system improvements to reduce energy and water consumption.

Performance measurement of this type can also be an effective tool for monitoring the costs of individual tenants and supporting conservation efforts by quickly identifying extreme variations

in consumption. Submetering offers building owners superior information about the overall

performance of a building, mechanical systems within the building, and patterns of occupant energy use (which can be helpful in determining how to reduce demand peaks).

HUD Background

HUD’s public housing (PH) program was established under the Housing Act of 1937 to provide safe, decent, and affordable rental housing. HUD’s Public Housing Data Dashboard illustrates

that the agency administers federal aid to approximately 2,700 local public housing authorities (PHAs) to help manage and operate affordable housing for more than 910,000 units nationwide (HUD, n.d.d.).

HUD’s multifamily (MF) housing program provides funding in a variety of forms to assist

private owners of buildings designed to house families in separate housing units. The agency

classifies these properties into three broad categories—Section 202/811 properties, HUD-insured (unsubsidized) properties, and HUD-assisted (subsidized) properties—on the basis of the type of

funding provided. Households that receive a rental subsidy in this program may be reimbursed

for utility expenses based on apartment characteristics and expected use but are responsible for any nonowner-paid utility costs greater than the reimbursed amount. As of December 2017, the

MF program provided federal assistance to approximately 1.42 million households nationwide.

Since 2005, this total has remained relatively steady, increasing by approximately 1 percent.

HUD’s Rental Assistance Demonstration (RAD) program was established under the

Consolidated and Further Continuing Appropriations Act of 2012, serving as a powerful

mechanism to address the capital needs backlog of the nation’s public housing stock. RAD gives

PHAs a tool to preserve and improve public housing properties and address the $26 billion nationwide backlog of deferred maintenance. RAD also gives owners of three HUD “legacy”

programs (Rent Supplement, Rental Assistance Payment, and Section 8 Moderate Rehabilitation)

the opportunity to enter long-term contracts that facilitate the financing of improvements.

At its inception, the program had a statutory limit of 60,000 units; however, Congress has raised

the cap multiple times on RAD units, and as of March 2018, the cap was raised to 455,000 units.

As of October 1, 2018, RAD had helped HUD preserve 100,994 units of affordable public

housing.

RAD allows PHAs to leverage public and private debt and equity to reinvest in public housing

stock. In RAD, units move to a Section 8 platform with a long-term contract that, by law, must

be renewed in perpetuity. Use Agreements are also recorded under RAD, which ensures that the units remain permanently affordable to low-income households.

Residents benefit from the right of return—a prohibition against rescreening—and robust

notification and relocation rights. Residents continue to pay 30 percent of their adjusted income toward rent, maintain the same basic rights they possess in the public housing program, and gain

a new option to request tenant-based assistance if they subsequently wish to move from the

property.

RAD maintains the ongoing public stewardship of the converted property through clear rules

requiring continued ownership or control by a public or nonprofit entity and has been highly cost

effective, relying on shifting existing levels of public housing funds to Section 8 accounts as

properties convert.

Benefits of and Barriers to Submetering

Submetering makes sense only when it can be shown to provide substantial benefits because it

incurs significant costs, especially as a retrofit. Submetering has the potential to save energy and

money and to reduce greenhouse gases (GHGs). It can also be used to provide timely alerts to building management about essential repairs, thus preventing the need for expensive repairs and

improving residents’ quality of life by eliminating the disruption such repairs would require.

As a bonus, often, submetering permits a building to continue using its master meter to purchase utilities at a bulk rate.

Despite these benefits, the most prominent barriers to implementing a submetering program are

the costs of installation and billing. Others include the potential need for apartment access,

resident resistance to a new way of doing things, and resident nonpayment.

Benefits

Energy and GHG savings potential. The installation of electric submeters, for example, in

individual apartments would provide important feedback to residents and lead to energy conservation and GHG reduction. Studies have shown that submetering and individual metering

are a proven first step toward reducing energy consumption (Christian and Ucar, 2019; Gross,

1976).

Data from the New York State Energy Research and Development Authority (NYSERDA) show

substantial savings from electric submetering (see exhibits 1 and 2), both initially and over the

longer term (NYSERDA, 2016). Exhibit 1 summarizes the first-year savings resulting from

submetering in the 68 individual buildings participating in the study. Exhibit 2 shows the average percent savings for each of 5 years and the number of buildings with data for each year. Savings

remain relatively constant after the first year of implementation.

Exhibit 1: Whole-Building Electricity Savings Following Submetering

Source: NYSERDA, 2016: 2

Exhibit 2: Average Electricity Savings Following Submetering

Source: NYSERDA, 2016: 1

Other research has established that unmetered tenants use more energy than their counterparts in

individually metered apartments because they lack the means to measure how much energy is

used and have no cost incentive to conserve (Levinson and Niemann, 2004; Reina and Willis, 2015).

The median master-metered New York City Housing Authority (NYCHA) apartment, for

example, uses four times the energy of the median direct-metered NYCHA apartment; at worst, unmetered residents consume up to seven times the electricity of metered residents (Jung,

Christian, and Sahagian, 2021).

Tracking Consumption: Monitoring and Efficiency. Submetering—be it of electricity, water,

or some other quantity—permits building management to identify outliers consuming far above the average and take steps to mitigate the problem. If the submeters are so-called smart meters,

the potential is even greater. Smart meters can provide real-time information so energy users can

identify waste and adjust consumption as needed. These meters can also help residents benefit from future electric rates tailored to discourage consumption during peak periods.

When submetering water, leaks can be identified and addressed long before severe financial or

physical damage occurs. The potential savings in repair costs and reduction of resident misery can be substantial.

Utility Rates. Master-metered buildings generally pay less per kilowatt hour (kWh) and per 100

cubic feet (CCF) of cooking gas than direct-metered buildings. These savings, where they exist,

can be passed on to residents.

Barriers

Installed cost. Although submetering frequently results in energy or water cost savings, it is

often not considered to be an energy-saving measure (see Energy Performance Contracts in this report) and thus may not qualify for certain types of financing that might make such a project more attractive to a PHA.

Apartment access. Sometimes, submeters must be in individual apartments, usually due to a

common riser for electricity, hot and cold water, or gas. In such cases, apartment access becomes

crucial. Even if a small number of residents are unwilling to allow installers into their apartments, the entire project can be stymied for weeks or months if local laws support the

residents’ position.

Additional management workload. Once a submetering system is in place, someone must pay attention to it. Bills must be developed and sent out; meters must be occasionally tested for

accuracy, repaired, or replaced; and the overall system must be maintained.

Resident resistance. Change is difficult, and it is especially difficult for anyone being asked to

pay for something they previously received for free.

Any transition to submetering must be carefully managed (and must include extensive resident

information sessions), but the savings to both the PHA and the residents will be substantial. The

residents’ increased agency will give them a greater sense of being in control of their affairs and result in quality-of-life improvements.

With submetering, residents should receive a rent reduction equivalent to the amount of a

carefully calculated utility allowance. If the cost of a resident’s energy (or water) consumption is less than the utility allowance, he or she will pocket the difference. And because residents are

metered, they no longer pay an appliance surcharge for their air-conditioners, as some PHAs

require.

Some residents will undoubtedly fear that submetering will increase their costs, but if their rent is reduced equitably, submetering can actually present an opportunity to reduce the total monthly

outlay for rent and utilities.

Nonpayment by residents. Not every resident will initially be persuaded that submetering presents a financial opportunity. Interviews with several organizations that have submetered

affordable housing (or considered submetering) indicate that some submetered residents will pay

the rent portion of their monthly bill but not the electricity portion. When this nonpayment occurs, building management has two undesirable options: electricity shutoff or eviction—

neither of which they are eager to pursue.

Submetering Regulations

The research reviewed federal, state, and local submetering policies to determine how they affect

federal, multifamily, and HUD-funded housing.

Exhibit 3 shows the 10 HUD regions across the United States.

Exhibit 3: HUD Regions

Source: HUD

50-State Review of Submetering Regulations

Local and state administrative codes, legal precedent, public service commission orders, and related documents were reviewed for all 10 HUD regions.

A matrix of this 50-state review is included as appendix B of this report.

Federal Guidance and Regulations

A range of federal guidance affects the submetering of U.S. government buildings. Highlights of

this guidance are presented here.

Energy Policy Act of 2005. Section 103 of the Energy Policy Act of 2005 (EPACT) notes, “Each

agency shall use, to the maximum extent practicable, advanced meters or advanced metering devices that provide data at least daily and that measure at least hourly consumption of electricity

in the Federal buildings of the agency.”1

Section 154 requires, “The Secretary of Housing and Urban Development shall develop and implement an integrated strategy to reduce utility expenses through cost-effective energy

conservation and efficiency measures and energy-efficient design and construction of public and

assisted housing.”2

1 Energy Policy Act of 2005. Public Law 109–58. https://www.govinfo.gov/content/pkg/PLAW-109publ58/html/PLAW-

109publ58.htm.

2 Energy Policy Act of 2005. Public Law 109–58. https://www.govinfo.gov/content/pkg/PLAW-109publ58/html/PLAW-

109publ58.htm.

General Services Administration. The General Services Administration (GSA) published a 2012 study, “Submetering Business Case: How To Calculate Cost-Effective Solutions in the

Building Context,” that outlines the financial implications of submetering in energy cost

management strategies for water and energy (GSA, 2012).

Internal Revenue Service, U.S. Department of the Treasury. In 2016, the International Revenue Service (IRS) and the U.S. Department of the Treasury issued utility allowance

regulations in relation to low-income housing tax credits. In particular, the use of ratio utility

billing systems (RUBS) is addressed. RUBS is the use of a formula to allocate utility bills to apartments based on relative floor space, number of occupants, or some other measure rather

than actual consumption. The use of RUBS is not prohibited, but the amount paid for utilities

must be included in the gross rent (Department of the Treasury and Internal Revenue Service, 2016).

Environmental Protection Agency. In 2003, the Environmental Protection Agency (EPA)

issued a memorandum, “Applicability of the Safe Drinking Water Act to Submetered Properties,”

to revise its policy on submetering water systems under the Safe Drinking Water Act (SDWA). Before this memorandum, the EPA required property owners to meet all SDWA drinking water

requirements under section 1411.

The EPA determined that this policy was a disincentive to submetering and affirmed that submetering is a tool for reducing water usage that does not change the quality of the water

provided. As a result, owners submetering water usage are not subject to additional water quality

standards. In this memorandum, the EPA also noted that the water savings from RUBS are

uncertain and that RUBS and other allocation systems do not meet the definition of submetering (Mehan, 2003).

Energy Information Administration. The Energy Information Administration (EIA) and the

U.S. Department of Energy Office of Energy Efficiency and Renewable Energy (EERE) researched EIA energy consumption end-use models for commercial and residential units. The

study led to updates to modeling practices, including an assessment of current interval data from

advanced metering infrastructure systems and submeter systems managed by utilities throughout the United States (U.S. EIA, n.d.).

Federal Energy Management Program. The Federal Energy Management Program (FEMP)

publishes Federal Metering Guidance at the direction of the Energy Act of 2020. The document states, among other things, that the U.S. Department of Energy (DOE) is required to establish

guidelines for agencies to install energy and water meters in federal buildings.

This FEMP document includes additional guidance—

• Describing the legislative authority for energy and water metering and the meter-related

reporting requirements for federal agencies.

• Specifying a method to verify the existence of currently installed building-level meters

and to create an updated list of buildings to be metered with advanced energy and water

meters.

• Explaining the criteria for determining whether installing advanced energy and water

meters on a building is practicable.

• Providing guidelines on prioritizing buildings for the implementation of advanced energy

and water meters.

• Setting the schedule for agencies to update their metering plans and outlining the

minimum required information that agencies shall provide.

• Discussing additional recommendations for an effective plan covering meter

implementation, cybersecurity, data management and analysis, and program performance

(U.S. DOE, 2022).

Notable Findings Regarding Submetering

Local governments’ authority on submetering varies from state to state. In general, each state’s

approach to this authority can be separated into those states using “Home Rule,” in which their

constitutions grant municipalities the right to govern, provided that the rules follow state and federal laws, and states using “Dillon’s Rule,” in which the state grants all authority.

Submetering is typically authorized either by a state’s public utility commission or through

legislation from a state’s administrative code or landlord-tenant law.

Such enabling language often establishes—

• The role of landlords, building owners, and managers.

• Restrictions regarding what can be submetered and how submetering can be conducted.

• Requirements for calculating bills and establishing minimum/maximum charges.

• Limitations on the ability to earn a profit from submetering.

Some states are silent about submetering in multifamily housing. In those cases, utilities may

include language in their tariff (price schedule) that either permits or prohibits submetering.

Discussions with submetering companies and regulators reveal a mixed landscape of what occurs in practice:

• In some states, a lack of regulations or laws is viewed as a prohibition of submetering

(e.g., Vermont).

• In others, silence means it is tacitly allowed (e.g., Idaho and Michigan).

Entities that submeter may be regulated under the same policies as utilities in states silent about submetering; therefore, although it is technically possible to submeter, the significant and

potentially costly requirements to meet the standard of becoming a utility may make submetering

infeasible.

Local municipal requirements or utility tariffs may differ from state regulations. For example—

• The state of Maine is silent on the subject of submetering water, but the cities of Portland

and Belfast permit the submetering of water and wastewater.

• The state of New Hampshire permits submetering electricity, natural gas, and water, but

within the state, the utilities Liberty Gas and Yankee Gas prohibit submetering natural gas

in their service territories.

Several states prohibit master metering of multifamily residential properties for all new

construction and require either individual metering by the utility or submetering by the owner. Some states permit submetering for specific applications, such as campgrounds, mobile homes, electric vehicles, and wastewater, but either restrict or are silent about submetering residential

and commercial properties.

A summary of each state’s general rules on submetering is shown in exhibit 4.

Exhibit 4: States That Permit Submetering by Type of Utility and HUD Field Office

Region

State Electricity Natural Water and HUD

Gas Wastewater Region

CT Y Y 1

ME Y Y 1

MA N N Y 1

NH Y Y Y 1

RI Y 1

VT 1

NJ N Y 2

NY Y N Y 2

DE Y Y Y 3

DC Y Y 3

MD Y Y 3

PA Y Y Y 3

VA Y Y Y 3

WV Y Y Y 3

AL Y N Y 4

FL Y N Y 4

GA Y N Y 4

KY N N Y 4

MS N N Y 4

NC Y Y Y 4

SC N N Y 4

TN N N Y 4

IL Y 5

IN Y N Y 5

MI Y Y Y 5

MN Y Y Y 5

OH Y Y Y 5

WI Y Y Y 5

AR N N Y 6

LA Y Y N 6

NM Y Y Y 6

OK Y Y Y 6

TX Y Y Y 6

IA Y Y N 7

KS Y 7

MO Y Y Y 7

NE N N 7

CO Y Y Y 8

MT Y Y Y 8

ND Y Y 8

SD 8

UT Y Y Y 8

WY 8

State Electricity Natural Water and HUD

Gas Wastewater Region

AZ Y Y Y 9

CA Y Y Y 9

HI Y Y Y 9

NV Y Y Y 9

AK Y 10

ID N 10

OR Y Y 10

WA Y Y Y 10

HUD = U.S. Department of Housing and Urban Development. Y = Yes, submetering is allowed, although individual municipalities, utilities, or counties may restrict it within their jurisdiction. N = No, submetering is prohibited on a statewide level.

Note: Blank cells represent where the code or law is silent on submetering. Source: See Appendix B

HUD Guidance and Regulations

HUD properties are affected not only by regulations by states and other federal agencies but also

by specific HUD regulations.

Utility Allowances

Federal housing law generally requires that a resident’s share of total rent in public housing or

other federally assisted housing should equal 30 percent of adjusted monthly income; this rent includes the cost of shelter and utilities. The utility allowance is the estimated dollar amount that

a PHA determines is necessary to cover the costs of utilities—including electricity, natural gas,

and water—and end uses, such as space and water heating.

In checkmetered or submetered buildings, the PHA gives a household a utility allowance by

setting a maximum level of consumption. If this level is exceeded, a surcharge, or extra fee, can

be charged to the household.

In direct-metered homes, the utility allowance is provided through a reduction in monthly rent. Many buildings have different metering systems for different utilities (sometimes referred to as

mixed metering) (HUD, n.d.a.).

Energy Performance Contracts

The HUD Energy Performance Contract (EPC) program allows financial savings from energy- or

water-cost reductions to repay the cost of measures that led to those savings (Early et al. 2017 &

HUD, n.d.a.). Savings from EPCs can be recovered either through the Frozen Rolling Base

incentive (freezing consumption level assumptions before installation of the energy conservation measure [ECM]), add-on subsidies (an increase in subsidy to assist in the ECM expense), or

Resident-Paid Utility (RPU) incentive (exclusion of increases in rental income resulting from

decreased utility allowances via reduced utility consumption). For submetering to be included in an EPC, the anticipated savings from submetering must be quantified and included in the

submission to HUD. Historically, submetering has not been considered a savings measure.

Some confusion exists regarding EPCs and submetering. For example, the New York City Housing Authority was prohibited from submetering EPCs in 2010. However, the Richmond

(VA) Redevelopment and Housing Authority was required to incorporate submetering in EPCs

during the same period.

Impact on Public Housing Authority Subsidy

Submetering can reduce the operating subsidy that HUD provides to a PHA for each public

housing unit. The operating subsidy calculation includes the total amount spent on utilities.

When a unit is submetered, HUD reduces the PHA subsidy by the amount that is now the tenant’s responsibility. The tenant is now responsible to the PHA for paying utilities, and HUD

expects the PHA to collect the utility payments to offset the loss in subsidy from HUD.

Tenants who do not pay their share of the utility deprive the PHA of operating revenue, which can negatively affect both the finances of the PHA and its Public Housing Assessment System

score. However, if the PHA is using an EPC, the RPU permits the PHA to keep the financial savings as an offset to meet debt service toward the EPC. The PHA benefits from the presence of ECM, and the RPU incentive covers the cost.

24 CFR 965

Subpart D of 24 CFR 965 (“Individual Metering of Utilities for Existing PHA-Owned Projects”)

lays out submetering requirements for HUD-funded public housing properties. It states that all utility services shall be individually metered to residents, either through retail service to the

residents by the utility supplier or through the use of submeters, sometimes referred to as

checkmeters.

Exceptions to this requirement can be made if—

• The individual metering of certain end uses is impractical—for example, certain types of

central heating systems, such as a central heating system in an apartment building.

• Switching from master metering to individual metering is not financially justified on the

basis of a cost-benefit analysis.

• 3 It is not permissible under state or local law.

PHAs with master metering are required to reevaluate via cost-benefit analysis every 5 years

unless they are exempt under conditions in which a PHA has more than one development of

similar design and utility services. In that case, the PHA may prepare a cost-benefit analysis for a

representative site, and in cases in which the finding is that a change in metering is not cost effective, this result would serve as a sufficient reason for the PHA not to perform cost-benefit

analyses on the remaining sites.

The cost to convert from master to individual metering, including that of the cost-benefit analysis, shall be funded from the operating funds of the PHA. In cases in which operating funds

are insufficient to feasibly cover the conversion, such costs are eligible to be included in a

modernization project or for funding from any available development funds, paid for as part of

EPC-eligible expenses with true ECMs.4

Rental Assistance Demonstration-Specific Regulations

Properties undergoing conversions through RAD use their Public and Indian Housing (PIH)-

approved utility allowance for the first contract year after conversion. After the initial year, these projects must follow existing multifamily housing policies to adjust the property’s utility

allowance. Property owners should also follow the notification requirements in 24 CFR

245.405(a) and 245.410, requiring at least 30 days’ notice to tenants (HUD, 2014).

Utility Allowances and Form HUD-52722

The PHA uses Form HUD-52722 to calculate the Allowable Utilities Expense Level (AUEL), or

the estimated cost level for utilities for the next year (The Nelrod Company, 2008). The Utilities

Expense Level is one component of the Operating Fund, which determines the amount of

3 PHA-Owned or Leased Projects—General Provisions: Benefit/Cost Analysis for Similar Projects,” 24 CFR Part

965.406. February 29, 1996. https://www.ecfr.gov/current/title-24/subtitle-B/chapter-IX/part-965.

4 PHA-Owned or Leased Projects—General Provisions: Benefit/Cost Analysis for Similar Projects,” 24 CFR Part

965.406. February 29, 1996. https://www.ecfr.gov/current/title-24/subtitle-B/chapter-IX/part-965. operating subsidy to be paid to the PHA (HUD, n.d.c). Projects converting from PHA-supplied to resident-purchased utilities will exclude all utility data for the resident-purchased utilities on the

next HUD-52722 form.

Capital Fund Guidebook (Regarding Master Metering)

The Capital Fund Guidebook details the requirements for the public housing CFP final rule regarding eligible and ineligible activities and cost limits. CFP provides financial assistance to

public housing agencies to complete capital and management activities.

To receive a grant through CFP, a PHA must “validate project-level information in HUD’s data systems, have an approved 5-year Action Plan, and enter into a Capital Fund Annual

Contributions Amendment with HUD” (HUD, 2016).

Technical Considerations

Submeter Technology

As submetering has become more popular, the technology has advanced accordingly. Meters for electricity, water, and British thermal units (Btu), a standard measure of heat energy, have

become smaller (and thus less obtrusive), more accurate, more sophisticated, and in some cases,

more affordable.

Many submetering systems now take advantage of wireless technology, making installation, data

gathering, and billing easier and less expensive.

Electric Submeters

Electricity submeters collect data from individual apartments and can communicate it to building

owners or managers for various purposes, such as the following:

• Tenant billing and cost allocation

• Measurement and verification for new system installations

• Demand-response programs

• Calculation of energy consumption baselines, equipment fault detection, and optimization

of building performance

• Utility bill verification

The most common types of electrical submeters include electromechanical meters and solid-state, digital, and smart meters (Parker et al., 2015).

Electromechanical meters. Electricity moves mechanical dials through a system of a rotating

disk and gearbox. Data must be manually read and subtracted from previous readings unless a pulse output module is included. Such meters usually require a dedicated socket. This equipment

is the most mature technology and was most widely used in the past. It is now largely superseded

by newer technology (see exhibit 5).

Exhibit 5: Socket-Type Electromechanical Submeter

Source: Helping American Homeowners Association, “Electrical Protection Plans: Exterior Electric Wiring Plan”

Solid state, digital, or smart meters. These meters (see exhibit 6) use integrated circuits and have onboard memory and communication capability. As such, they can measure, record, and

transmit interval data, often in near real time.

Exhibit 6: Non-Socket Solid-State Electric Submeter

Source: Quadlogic, “Quadlogic Residential Solutions”

Submeters can be configured either as individual socket-type or non-socket meters for each

apartment or as a single module with multiple inputs. The cost and complexity of a submetering

installation depend heavily on the topology of the electric risers and distribution to the

apartments.

Electric Riser Topologies

Shared riser. Many mid- to high-rise apartment lines (especially in master-metered buildings)

are served by a three-phase, four-wire 120/208 volts alternating current (VAC) riser (see exhibit 7). Two of the three phase wires are tapped off the riser into each apartment in the line. For

example, the first-floor apartment might be phases A and B, second-floor B and C, and third-

floor C and A, with the pattern continuing to the top floor. A meter is usually required in each apartment with this topology.

Exhibit 7: Shared Riser

Source: Jung, Christian, and Sahagian, 2021: 40

Shared riser with distribution panels. In some buildings, the electric riser feeds a small

electrical closet on each floor or wing of each floor, and a separate branch feeds each apartment (see exhibit 8). In such cases, a multiple-input meter module could be used on each floor, like in

a dedicated riser configuration.

Exhibit 8: Shared Riser With Distribution Panels

Source: Jung, Christian, and Sahagian, 2021: 40

Dedicated riser. In low-rise buildings, each apartment usually has a dedicated riser (see exhibit

9).

Exhibit 9: Dedicated Riser

Source: Jung, Christian, and Sahagian, 2021:40

A multiple-input module (see exhibit 10) can be installed at the electric-service entrance. This

process eliminates the need to enter apartments, confines the work to a relatively small area, and

results in substantial savings instead of having to install meters in each apartment.

Exhibit 10: Multiple-Input Electric Submeter Module

Source: Tom Sahagian

Socket-type meters measure current directly; non-socket meters require current transformers

(CTs) to measure current (see exhibits 11 and 12). Solid-core CTs are generally the most accurate

but require a shutdown to install. Split-core CTs are somewhat less accurate but can be installed without the need for a shutdown.

If residents are to be billed on the basis of submeter readings, the meters should be revenue grade

(typically plus or minus 0.5-percent accuracy; see exhibit 13).

Exhibit 11: Solid-Core CTs

Source: Tom Sahagian

Submetering systems include the submeter apparatus, a central data-collection device, and

hardware to communicate the data to the end user or billing entity.

Wireless communication between devices is common, but Ethernet cables and other wired connections may also be used on the basis of the needs of the building.

Exhibit 12: Split-Core Current Transformer (CT)

Source: EKM Metering, “Split-Core CT”

Exhibit 13: Electrical Meter Type Summary

Submeter Type Application Accuracy Cost

Electromechanical/Solid- 0.5% or $300– Single Phase State better $1,000

Electronic Non-Socket Single Phase, 3 Phase better 0.5% or $500– $1,000

Source: Tom Sahagian

Water and Wastewater Submeters

Just as electricity is often master metered, so too is water in most multifamily buildings. As water

costs climb, the burden on PHAs and all other building operators increases. Although water

submetering for billing purposes is common in many countries around the world, it is much less

so in the United States.

Some building managers install water submeters only to detect leaks, especially from toilets. Such systems can often pay for themselves over time in reduced water costs and damage.

The evolution of water metering has paralleled that of electric meters somewhat, moving from

mechanical types to more sophisticated electronic types:

Positive displacement meters. Nutating-disc and oscillating-piston flowmeters capture and release a fixed volume of water as it flows through the meter (see exhibit 14). Their accuracy can

decrease over time from wear and tear and sediment buildup.

Single-jet and multijet meters. The flowing water spins a rotor to drive a gear train (exhibit 15).

Turbine meters. Usually reserved for larger loads, in turbine meters, the flowing water spins a

propeller-like axial wheel to drive a gear train. They can be accurate for a wide flow range but are often much less so at low flow rates. Some small meters also use a turbine element (see

exhibit 16).

Exhibit 14: Oscillating-Piston Meter

Source: Zenner, n.d.

Exhibit 15: Multijet Meter

Source: WESDOM Group, n.d.

Exhibit 16: Small Turbine Meter

Source: Tom Sahagian Many sites that install water submeters measure only cold water because most leaks occur in toilets. However, some buildings also monitor domestic hot water; if so, the meter must be

capable of withstanding temperatures as high as 140 degrees F.

All the conventional meter types previously described require cutting a pipe to install. For an

individual apartment, the pipe would typically be 0.5 to 0.75 inch in diameter. Ultrasonic flow meters clamp onto the outside of a pipe and generally do not require cutting, but they are far too

costly to be used for individual apartments.

At least one manufacturer now offers a residential ultrasonic meter, but it requires cutting the pipe and is still expensive compared with more conventional technologies.

Water flow within buildings and individual apartments can vary over a wide range. As such, it is

important to install meters that are appropriately sized and oriented for accurate results. For best

accuracy, some meter types require a certain amount of straight pipe upstream and downstream (typically 10 pipe diameters up and 5 down) to ensure so-called laminar flow.

Water data gathering. It is a fairly simple task to read a single master water meter once a

month, but if water submeters are inside apartments, manual readings become almost impossibly time consuming.

Most water submeters can be fitted with a pulse output module that can send consumption data to

a local totalizer that communicates with a central office via the Internet or cellular modem. These systems can be hardwired or wireless. Exhibit 17 shows a sample accuracy curve for a water

meter, highlighting its performance as compared with required and recommended accuracy

metrics. Exhibit 18 summarizes standard water meter types, expected accuracy, and general expected equipment costs.

Exhibit 17: Typical Water Meter Accuracy Curve

Source: Fontanazza et al., 2014: 230

Exhibit 18: Water Meter Type Summary

Potable Water Meter Type Application Accuracy Cost

Up to 1”

Positive Displacement 0.5%–1.0% $50–$400

connections

Single- and Multijet 0.25”–1.0” 0.25%–2.0% $60–$150

Turbine 0.25”–4.0” 0.25%–2.0% $100–$200

Source: Tom Sahagian

Natural Gas Submeters

Direct metering of natural gas in both market-rate and affordable housing is fairly common, but

submetering is not. Submetering would generally make sense economically only if residents were consuming unusually large amounts of gas despite having nominally small loads, such as

for stoves. In apartments with multiple or larger loads, such as stoves, domestic water heaters,

and gas dryers, submetering might pay for itself.

By far, the most common individual residential gas meter is the positive displacement diaphragm

type (see exhibit 19), which always requires cutting the supply pipe. Only fully qualified

professionals should install such meters.

These meters, which are usually temperature and pressure compensated, are very accurate.

Exhibit 19: Diaphragm Gas Submeters With Wireless Data Transmitters

Source: Tom Sahagian

Exhibit 20 summarizes standard natural gas meter types, expected accuracy, and general expected equipment costs.

Exhibit 20: Natural Gas Meter Type Summary

Natural Gas Meter Application Accuracy Cost

Diaphragm 0.75”–2.0” 1.0% $150–$500

Source: Tom Sahagian

Steam Submeters

It is almost impossible to submeter steam cost effectively, or even at all, at the apartment level,

and it is not recommended.

Thermal Submetering

Thermal submetering of central heating systems is not widespread in the United States, and initial research shows limited state-level regulation. ASTM International offers a Standard

Specification for Heat Meter Instrumentation (ASTM E3137/E3137-M) to provide guidance on

approaches (ASTM, 2018). Thermal submetering is regulated in the European Union by the Energy Efficiency Directive (EED) (see exhibit 21).

Exhibit 21: Thermal (Btu) Metering System in a London, England Apartment

Source: Tom Sahagian

Thermal submetering measures the amount of space-heating energy used in an apartment. It is

generally possible only in buildings with hot-water (hydronic) heating systems, in which each apartment’s heating hot water flows through a loop or set of loops dedicated to that apartment.

Apartments with dedicated electric resistance heat or gas heat could be submetered with the

appropriate electric or gas meters, as described earlier in this section.

For the hydronic systems previously mentioned, the most common submetering setup consists of

a hot-water-tolerant flow meter, a temperature sensor on the supply and return pipes, and a Btu

computer (see exhibit 22). As with other systems, the Btu computer can be manually read, hard wired, or wireless.

As an alternative, a cost allocation method can be developed to estimate the heat energy

consumption of an apartment based on indoor temperature and other factors. The limited

accuracy of such an approach can be problematic for residents.

Exhibit 22: Btu Meter

Source: ISTEC Corporation, n.d.

Billing Systems

Submetering data can be gathered, pursuant to local regulations, either manually or automatically and then used to develop monthly bills for each apartment.

The PHA can purchase software and send bills to residents, or the task can be delegated to a

private third party.

Energy Information Systems

A submetering system can be as basic or complex as a PHA desires and for which it has adequate

funds—funds not only to implement but to maintain and troubleshoot as well. As technology

advances and systems become more sophisticated and less expensive, it may be tempting to seek a feature-laden system that provides energy measurement, billing, consumption and failure

alarms, peak-demand control, and other niceties.

But first, a PHA interested in a submetering system must decide its energy- and water-monitoring priorities. The main value of submetering is that it provides monthly feedback to residents so that

they can reduce their total monthly outlay of rent plus utilities. As they respond to price signals,

the PHA’s energy and water costs decline, and resident comfort increases, especially in overheated buildings. Water leak detection can also be a major benefit.

Online dashboards that provide users with easy access to large amounts of information have

recently become more popular, but they come with costs that many PHAs may not be able to

afford. The more data a system can provide, the more staff time is required to manage and maintain it.

Installation Challenges

This report will focus on existing buildings; retrofit projects present far more challenges than do new construction projects.

Building layout and construction. PHA buildings run the gamut, from two-story low-rises to high-rises with 20 or more stories, stick-built to masonry to concrete, built anywhere from a few

years to 70 years ago. Interior wall material and thickness, the presence or absence of easily

accessible pipe chases, common-area topology, and dropped or solid ceilings are a few factors

affecting what is and is not feasible in any given building.

Perhaps the most common effect of a building’s layout and wall composition on a submetering

system is how difficult—or even impossible—they make it for the system to use wireless sensors

and communication.

Electric submeters. Installation of electric submeters in basements or distribution panels on the

floors is relatively straightforward and does not require apartment access. Meters can be installed

in traditional socket arrays, or multiple-input meters can be used.

If the meters must be in the apartments, they must be fairly close to the apartment panel (CT wires can only be so long). Meters will generally be either flush mounted or surface mounted.

Flush mounting eliminates protrusion from the wall but is more labor and finish intensive.

Surface mounting creates a protrusion but is much less labor intensive, typically requiring no finish work and potentially resulting in slightly fewer air-sealing issues. Because modern solid-

state meters can be as small as a conventional thermostat, the protrusion could be a nonissue for

residents.

Where electric risers have been added to enable upgrades in service capacity, two or more meters

may be required to capture all electric loads; even without additional risers, a second submeter

may be needed where cooling energy costs are borne by residents but heat energy costs are not.

Water Submeters. Almost all multifamily buildings deliver hot and cold water to apartments via

common risers, so water submeter installation will virtually always require apartment access. A

possible exception would be a building where risers and branch takeoffs are accessible from

common-area hallways.

Best Practices

Planning and Design

From the standpoint of hardware, data gathering, and billing, there has never been a better time

to submeter energy and water use—not to mention the urgency of combating climate change. As is often the case, the technical aspects are the easy part; the human factor is the most challenging

(see Tenant Outreach in this report).

Hardware: Electricity submetering. All hardware should be approved by Underwriters

Laboratories, Inc. (UL) and the Federal Communications Commission (FCC) (where applicable).

Meters and CTs should be able to achieve at least plus or minus 1-percent accuracy of reading

from 1 percent to 100 percent of the CT’s current rating, with plus or minus 0.5 percent being

preferable.

For safety, it is better to use CTs with a voltage output instead of a current output.

Many electric submetering installations omit a submeter for the common-area electricity, making it impossible to compare the total submetered kilowatt hours against the utility’s master metered

kWh.

Hardware: Water submetering. All meters should meet American Water Works Association

(AWWA) accuracy standards.

Meters should be sized to take expected maximum flows and pressure drops into account. An

oversized meter will present less pressure drop but will be less accurate at lower flows.

Data gathering. Hardwired, wireless, and powerline carrier (PLC) systems have all been used successfully. The selected method will depend on ease of retrofit, electric riser type, construction

materials of the building, and performance of local vendors.

So-called smart electric meters allow building management to gather large amounts of data beyond simple total kWh, which can be used for a variety of planning and analytical purposes in

addition to enabling money-saving demand management.

Meters for water and gas generally provide less information than smart electric meters but can

also provide useful operational data. Water submeters, in particular, can be used to identify leaks that, if not caught right away, could lead to expensive repairs and mold remediation.

As useful as these data may be, if staff are not available to organize and analyze them, then data

gathering may not be worth pursuing.

Billing. Many buildings submeter off-load billing to a third party, which can be cost effective;

however, it is also possible—and maybe even more cost effective—to purchase a billing software

package and handle the process in-house.

Cost Effectiveness

The cost effectiveness of any submeter installation depends on a number of factors, some or all

of which will be specific to a given building. Generally, the lower the installation and billing

cost, and the higher the cost of the utility being measured, the more cost effective the system will be (exhibit 23).

Exhibit 23: Submetering Costs and Savings

Installed Average Average Average Annual Average

Cost/Submeter kWh/Apartment/Month $/kWh/Year Electric Savings With

$/Apartment Submetering

$1,000 650 $0.15 $1,170 20%

New Average Monthly Billing New Average Average Annual Simple

Annual Fee/Apartment Annual Total Savings/Apartment Payback,

Electric Electric . Years

$/Apartment Cost/Apartmen

t

$936 $3.00 $972 $198 5.1

Source: Tom Sahagian Also, cost effectiveness is a somewhat subjective measure. The usual indicator of cost effectiveness is the simple payback of the system, or the installed cost divided by the dollar

savings minus billing costs per year. In the private sector, simple paybacks of 2 to 3 years are

often required to invest in submetering. In the public sector, paybacks of up to 10 or even 15

years are frequently acceptable.

Exhibit 24 shows a sample calculation of simple payback. This spreadsheet is available on

request.

Exhibit 24: Submetering Simple Payback

Average Simple

Collection Payback,

(%) Years 100 5.1

90 5.6

80 6.3

70 7.2

60 8.4

50 10.1

40 12.6

30 16.8

20 25.3

10 50.5

Source: Tom Sahagian

Naturally, the payback will also vary with collections. In this example, even if collections drop as

low as 50 percent, the payback still falls within a reasonable time frame.

In the case of water submetering, savings that result from early identification of leaks and excessive consumption can improve payback dramatically.

Tenant Outreach

Many affordable and public housing residents do not pay for utilities. Any plan to move to

submetering must recognize that, from the residents’ viewpoint, this is a significant change, one that may engender massive mistrust and, in any case, require adaptation by staff and residents

alike.

As such, it is imperative that submetering be implemented carefully and sensitively, with an emphasis on comprehensive resident education and staff preparation well in advance of the

installation of any system.

Theoretically, if a utility allowance is calculated fairly, residents’ monthly outlay for rent plus

utilities can be less than their current rent if the residents avoid wasteful practices. If this message can be delivered credibly by management, submetering has a good chance of success.

However, what should work in theory does not always play out that way in the real world. Many

residents require more concrete evidence that their costs will not rise. Instead of introducing submetering to an entire development or even an entire building, an introductory pilot project should be considered.

Such a project often will include the concept of shadow billing, in which submeters are installed

and read, and the results are sent to residents, but no one is billed at first. This process allows the

pilot participants to see what would happen if they were to be billed. Frequently, the shadow bill will be too high for the resident to have saved any money.

At that point, the next phase of resident education begins. Site staff can show residents how

small changes in behavior can result in significant savings. As the shadow billing continues, residents receive the feedback they need to make better utility-consumption decisions. Over time,

the residents’ total monthly outlay can become less than it was before submetering.

However, this fact alone may not be persuasive enough to pave the way for the expansion of

submetering beyond the pilot. It may be necessary to include a “before-and-after” savings comparison on the monthly utility bill to enhance consumer awareness. For even greater impact,

residents whose utility cost is less than the amount of the utility allowance could be sent a refund

check with their bill.

If and when the pilot program is deemed successful, the results can be used to help scale up

submetering to more and more buildings in the development. Resident leaders who have been

involved in the pilot can become credible champions of the expansion of the system.

Case Studies

The research team conducted site visits and interviews with PHAs and for-profit and nonprofit

building owners and managers regarding their experiences with submetering in HUD-funded and

affordable housing.

Seattle Housing Authority

Property: All homes in the portfolio

Utility or End Use Affected: Water

Contact: Bobby Coleman

The Seattle Housing Authority (SHA) provides low-income rental housing and rental assistance

to more than 38,000 people in more than 18,000 households. SHA owns and operates 8,500

apartments and single-family homes spread across 375 locations and administers more than 11,000 housing choice vouchers in Seattle.

SHA implemented a water submetering program to reduce utility costs without penalizing

residents. Water is the most expensive utility for SHA. The program applies to housing in the

Choice Neighborhood developments and Hope IV communities but has not yet been instituted in its public housing portfolio. The program resulted from a public outreach program, and about

2,500 units are submetered and participate. A study of outcomes found that water usage in the

program was about 65 gallons per person per day, compared with the citywide average of 85 gallons per person per day.

Guardian Water & Power, a third-party vendor, charges residents for water consumption. The vendor also manages meter reads, and it prepared an operations and maintenance manual with

technical details on the meters to assist residents with troubleshooting before calling the vendor

for maintenance. Both hot- and cold-water meters may be present in an apartment.

Water usage is paid directly by SHA to Seattle Public Utilities. SHA provides an incentive program that grants tenants a monthly allowance equivalent to a certain number of gallons

consumed each month. Residents receive a credit equal to $0.01 per gallon when consumption is

below the threshold. Conversely, residents are charged $0.01 per gallon for each gallon of water over their allowance.

Allowances are calculated using a gallons-per-capita daily average for each property by

household size. SHA staff provide the vendor with an occupancy update for all units each month. The vendor then generates allowances based on those occupancies and provides the allowance on

the bill. Tenants receive the same utility allowance for water and sewer each month, calculated

using a 3-year rolling average consumption of matching household sizes at their property. The

allowance is updated annually. Tenants receive a letter each year notifying them of the upcoming year’s monthly water and sewer utility allowance.

On a quarterly basis, Guardian Water & Power provides SHA with a list of tenant accounts with

negative balances and outstanding balances 60 days past due. Residents with negative balances are given credit toward future bills. Residents with past-due bills receive notification of past-due

balances on their bills.

Submeter data enable SHA to administer a utility allowance program recognized by HUD while also incentivizing water conservation. Monthly billing and tracking software allows for the

identification of high usage, leaks, and other data points unavailable in a master-metered

situation. Tenants can also monitor their water usage and can identify and report leaks.

Monthly administration of the program is reportedly time-consuming. All bills are reviewed monthly for accuracy, and occupancy figures are also updated monthly to calculate allowances.

RiseBoro Community Partnership

Property: Our Lady of Lourdes, 1875 Broadway, Brooklyn, NY 11207

Utilities or End Uses Affected: Electricity, Heating, Cooling, and Water

Contact: Josh Shaffer

RiseBoro is a New York City-based organization providing community revitalization services, including affordable housing development and management. RiseBoro’s properties include

permanent housing for low- to moderate-income families, senior citizens, and other populations

with special needs. RiseBoro’s portfolio includes various types of HUD-funded housing.

The 1875 Broadway property is an 18-unit affordable housing building constructed in 2018 that is heated and cooled by a centralized heat pump system. RiseBoro opted to submeter the

apartments for electricity, heat, and water, at least partly to be able to offer lower-cost electricity

to the residents. Additional reasons included the following:

• Increased insight into resident consumption habits, which helps make informed

operational changes at this building and others.

• Theoretical potential for submetering to generate income. By charging residents at the

utility rate, it is possible to both bring in income to support the extra work that

submetering entails and offer residents a lower rate than they would have from the utility.

RiseBoro does this by leveraging the electricity consumption of its entire portfolio to lock

in low rates through an energy service company.

• The increased demand resulting from being master metered allows participation in

demand response programs.

• The benefits of solar photovoltaic production can easily be shared among residents.

Each apartment is billed for plug load, appliance, lighting electricity, and cooling electricity.

Electricity associated with heating and ventilation is not billed. Cooling energy for each apartment is calculated using software in the central heat pump system.

RiseBoro reports that some residents complain about the monthly cost of electricity. Almost all

of them pay some or all the rent portion of their monthly bill but not the electricity portion. The building was RiseBoro’s first submetered property, and the rollout was not as smooth as

RiseBoro had hoped. Some staff are concerned about the optics of shutting off a resident’s

electric accounts for nonpayment; thus, to date, there have been virtually no consequences for the

residents.

Even if RiseBoro were inclined to terminate service, the staffing, administrative, and regulatory

requirements of an electricity submetering program are challenging for a small organization.

Although RiseBoro submeters water, they cover all water and sewer costs, mostly to inform operations and find leaks. Exhibit 26 shows the building facade on the left.

Exhibit 25: Our Lady of Lourdes Exterior

Source: Steven Winter Associates

The Related Companies/Chicago Housing Authority

Property: Lathrop Homes Phase IA

Utilities or End Uses Affected: Electricity, Heating, and Cooling

Contact: Sarah Wick, The Related Companies; Lee Pratter, Chicago Housing Authority

Lathrop Homes Phase IA is a 414-unit, 16-building Chicago Housing Authority (CHA)

apartment complex, substantially renovated in 2018 and managed by The Related Companies.

The renovation included the installation of a centralized heat pump system, which replaced a centralized steam system. The new configuration includes market-rate residents, other subsidized

residents, and CHA residents. Residents are submetered for electricity.

The previous system consisted of a central gas-fired boiler servicing the campus of buildings. Utilities were master metered and not paid for by residents. Residents were temporarily relocated

to other units before the buildings were upgraded. The approach in Lathrop Phase IA was for a

central variable refrigerant flow (VRF) system, which could achieve high-efficiency electric

heating and cooling and allow for the use of both to be charged directly to residents via submetering.

Each resident is direct-metered by the local utility for their electric plug load (which includes fan

energy for the indoor heat pump unit in each apartment). The Related Company, not the local utility, is the billing entity only for heating and cooling electricity. Cooling and heating electricity

are calculated using a submeter to measure the indoor fan unit energy, allocating a proportional

amount of the total electricity used for the central heat pump system to each apartment.

Each apartment is allowed to deduct a heating and cooling utility allowance from their rent. The

allowance is calculated on the basis of the cost of electric-resistance heat, which is usually more

expensive than fossil-fueled heat and much more expensive than heat-pump heat. Recently analyzed data, however, suggest that the residents are paying more for heat under the heat-pump

regime than they would under an electric-resistance heating system. The Related Company will

be investigating this finding.

The billing arrangement is thus somewhat convoluted, and residents did not pay for utilities before the renovation, so there is some resident confusion regarding what they owe and why. An

element of distrust is also seen among the residents regarding the fairness and accuracy of the

billing by The Related Company because it is neither the utility provider nor the housing authority. The result is that many residents do not pay their heating or cooling bills.

As shown previously, electric submetering generally reduces consumption compared with master

metering, but at Lathrop, the billing feedback does not appear to have had that effect based on

total building consumption.

One possible reason for this effect is that residents had become accustomed to substantial

overheating from the steam system. The new heat pump system can control setpoints much more

tightly, which leads to numerous complaints and, in turn, induces the building superintendent to override the central control system.

Exhibit 26 shows a rendering of the completed upgraded properties.

Exhibit 26: Lathrop Homes Phase IA Exterior

Source: Cassidy, 2021

Conclusions and Recommendations

Submetering has been proven, in most cases, to reduce energy and water consumption by providing price signals to building residents, and it is encouraged by HUD regulations. In new

construction, submetering (where allowed by law) or, even better, direct metering by the local

utility should be included in a building’s design.

The decision is not as clear-cut for existing buildings. Retrofits of any kind are always more costly than new construction or major rehab. Residents who are not accustomed to paying for

utilities are unlikely to embrace the prospect with open arms. Housing advocates and their

political allies will not look kindly on any plan that has the potential to increase their constituents’ costs. State regulations may make it very difficult, either legally or politically, to

shut off service to nonpaying residents.

The research clearly shows that nonpayment of the submetering portion of residents’ monthly bills is a real issue and a source of income loss for housing providers. Despite often being

empowered to shut off service in the event of nonpayment, most owners or managers are

reluctant to take that step. As a result, word spreads that nonpayment of the submetering bill has

no consequence. Some housing providers avoid submetering for this reason—being put in a position to deal with nonpayment. Others simply absorb the cost as their only recourse.

Assistance in dealing with this occurrence is likely needed to expand submetering’s use.

Submetering in HUD-funded properties is not commonplace. Extensive outreach was conducted to housing authorities, affordable housing providers, vendors and manufacturers, and housing

organizations, but the number of entities engaged in or willing to discuss submetering was

limited.

Nonetheless, submetering is worth considering for a number of reasons:

• It generally reduces the demand for energy and water, which benefits the community as a

whole.

• It provides for a much fairer allocation of costs by eliminating the subsidy of a few large

users by many less-wasteful users.

• It provides an opportunity for residents to reduce their total monthly outlay for rent plus

utilities when properly implemented.

• It allows residents to pay less for their utilities than they otherwise would if they were

direct utility customers, for whom bulk rates apply.

• It can provide building management with valuable information about total consumption

and patterns of consumption, which can inform future policy and expenditure decisions

and, perhaps equally as important, alert management to leaks, apartment damage, and

other potentially costly episodes in a timely fashion.

In addition, although not the specific focus of this research, the future electrification of heating and domestic hot water (DHW) systems brings unique challenges, many of which can be related

to submetering. Decentralized and centralized electric systems provide the opportunity for the

use of low-carbon intensive fuels, increased efficiency, and submetering because the equipment can be more easily monitored than a centralized fossil-fuel system. Growth in the use of these

technologies in HUD-funded properties will require financial mechanisms and utility allowances

that recognize the costs and complexities of modern electric systems. Increased installation of

these systems can provide opportunities for growth in submetering because they are inherently more able to be monitored for heating, cooling, and DHW usage.

Given the gravity of climate change and the need for everyone to help reverse global warming, it

is decidedly in HUD’s interest to heavily promote submetering. To assist its constituents in that effort, the authors recommend that HUD fund pilot programs to develop successful submetering

programs to provide a real-world roadmap.

Appendix A: Additional Reading

General Services Administration. n.d. Submetering Business Case: How to Calculate Cost-

Effective Solutions in the Building Context. Washington, DC: General Services Administration.

https://www.gsa.gov/cdnstatic/Submetering_Business_Case_How_to_calculate_cost-

effective_solutions_in_the_building_context.pdf.

Hirschfeld, Herbert E. 2010. “Integration of Energy Management, Electrical Submetering and Time Sensitive Pricing in a Large Residential Community Utilizing Wireless Communications:

Phase 3.” In ACEEE Summer Study on Energy Efficiency in Buildings: 1-170–1-182.

https://aceee.org/files/proceedings/2010/data/papers/1939.pdf.

Case studies that document the costs and benefits of utility submetering systems.

Hirschfeld, Herbert E., and Joseph S. Lopes. 1998. “Dual System (Energy

Management/Electrical Submetering) Retrofit,” American Council for an Energy-Efficient

Economy 8 (147): 8.164. https://aceee.org/files/proceedings/1998/data/papers/0812.PDF.

Case studies that document the costs and benefits of utility submetering systems.

Hirschfeld, Herbert E., Jospeh S. Lopes, Howard Schechter, and Ruth Learner. 2001. Residential

Electrical Submetering Manual. Prepared for the New York State Energy Research and Development Authority. Albany, NY: New York State Energy Research and Development.

Authority. https://www.nj.gov/emp/home/docs/pdf/080508_NJApartmentAssoc_FennessyC.pdf.

Case studies that document the costs and benefits of utility submetering systems.

Lopes, Joseph S., and Herbert E. Hirschfeld. 2018. Maryland Public Service Commission -

Master Meter Conversion Study. Prepared for the Maryland Public Service Commission.

Baltimore, MD: Maryland Public Service Commission. https://www.psc.state.md.us/wp-

content/uploads/Final-Master-Meter-Conversion-Study-2018.pdf.

Case studies that document the costs and benefits of utility submetering systems.

Mayer, Peter W., Erin Towler, William B. DeOreo, Erin Caldwell, Tom Miller, Edward R. Osann,

Elizabeth Brown, Peter J. Bickel, and Steven B. Fisher. 2014. National Multiple Family Submetering and Allocation Billing Program Study. Prepared for the East Bay Municipal Utility

District. Oakland, CA: East Bay Municipal Utility District. https://docplayer.net/8352642-

National-multiple-family-submetering-and-allocation-billing-program-study.html.

National Conference of State Legislatures. 2016. “Summary: Utility Submetering.” National

Conference of State Legislatures. http://www.ncsl.org/research/energy/utility-submetering.aspx.

Summary of utility submetering policies throughout the United States.

National Low Income Housing Coalition. 2018. “HUD Issues Two RAD Notices Implementing FY18 Appropriations Act Provisions and Making Additional Changes.” National Low Income

Housing Coalition. http://nlihc.org/article/hud-issues-two-rad-notices-implementing-fy18-

appropriations-act-provisions-and-making.

National Science and Technology Council Committee on Technology, Subcommittee on

Buildings Technology Research and Development. 2011. Submetering of Building Energy and Water Usage: Analysis and Recommendations of the Subcommittee on Buildings Technology Research and Development. Washington, DC: National Science and Technology Council.

https://obamawhitehouse.archives.gov/sites/default/files/microsites/ostp/submetering_of_buildin

g_energy_and_water_usage.pdf.

Provides an overview of submetering and associated energy management systems to

develop an understanding of their benefits and complexities.

RAD Resource Desk. n.d. “Properties Participating in RAD Program.” RAD Resource Desk.

http://www.radresource.net/pha_data.cfm.

U.S. Department of Housing and Urban Development. n.d. “Housing Choice Vouchers Fact

Sheet.” U.S. Department of Housing and Urban Development.

https://www.hud.gov/program_offices/public_indian_housing/programs/hcv/about/fact_sheet.

———. n.d. “HUD’s Public Housing Program.”

http://portal.hud.gov/hudportal/HUD?src=/topics/rental_assistance/phprog.

Description of HUD’s public housing program, eligibility, and how rent is determined.

———. n.d. “Rental Assistance Demonstration (RAD).” U.S. Department of Housing and Urban

Development. http://portal.hud.gov/hudportal/HUD?src=/RAD.

———. n.d. “Section 202 Supportive Housing for the Elderly Program.” U.S. Department of

Housing and Urban Development.

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/progdesc/eld202.

———. n.d. “Section 811 Supportive Housing for Persons with Disabilities.” U.S. Department

of Housing and Urban Development.

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/progdesc/disab811.

———. n.d. “The Federal Housing Administration (FHA).” U.S. Department of Housing and

Urban Development.

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/fhahistory.

———. 2012. Affordable Green: Renewing the Federal Commitment to Energy-Efficient,

Healthy Housing. Washington, DC: U.S. Department of Housing and Urban Development.

https://www.hud.gov/sites/documents/OSHCENERGYREPORT2012.PDF.

Section 154 of the Energy Policy Act of 2005 requires that “the Secretary of Housing and

Urban Development shall develop and implement an integrated strategy to reduce utility

expenses through cost-effective energy conservation and efficiency measures and energy-

efficient design and construction of public and assisted housing.” This document is the

fourth report (2012) required by this provision.

———. 2016. “Utility Expenditures in HUD-Assisted Housing.” Working draft, U.S.

Department of Housing and Urban Development, Washington, DC.

———. 2017. HUD’s Regions. U.S. Department of Housing and Urban Development.

https://www.hud.gov/localoffices/regions.

Map of HUD regions.

———. 2017. “Picture of Subsidized Households—Public Housing Agency Data.” Dataset, U.S. Department of Housing and Urban Development, Washington, DC.

https://www.huduser.gov/portal/datasets/pictures/files/PHA_2017.xlsx.

U.S. Department of Housing and Urban Development (HUD), Office of Policy Development and

Research, Energy Task Force. 2006. Promoting Energy Efficiency at HUD at a Time of Change. Washington, DC: U.S. Department of Housing and Urban Development.

https://www.huduser.gov/Publications/pdf/EnergyEfficiency.pdf.

Section 154 of the Energy Policy Act of 2005 requires that “[t]he Secretary of Housing

and Urban Development shall develop and implement an integrated strategy to reduce

utility expenses through cost-effective energy conservation and efficiency measures and

energy-efficient design and construction of public and assisted housing.” This document

is the first report (2006) required by this provision. Subsequent reports highlighting

progress in implementing the strategy were required every 2 years thereafter.

———. 2008. Implementing HUD’s Energy Strategy. Washington, DC: U.S. Department of

Housing and Urban Development. https://www.hud.gov/sites/documents/DOC_4321.PDF.

Section 154 of the Energy Policy Act of 2005 requires that “[t]he Secretary of Housing

and Urban Development shall develop and implement an integrated strategy to reduce

utility expenses through cost-effective energy conservation and efficiency measures and

energy-efficient design and construction of public and assisted housing.” This document

is the second report (2008) required by this provision.

U.S. Department of Housing and Urban Development Public Affairs. 2018. “HUD Rental Assistance Demonstration Reaches Historic 100,000 Unit Milestone.” U.S. Department of

Housing and Urban Development.

https://archives.hud.gov/news/2018/pr18-103.cfm.

Federal Guidance

Energy Policy Act (EPACT) of 2005, 42 USC § 13201.

https://www.govinfo.gov/content/pkg/PLAW-109publ58/html/PLAW-109publ58.htm.

Section 154 of the Energy Policy Act of 2005 requires that “The Secretary of Housing

and Urban Development shall develop and implement an integrated strategy to reduce

utility expenses through cost-effective energy conservation and efficiency measures and

energy-efficient design and construction of public and assisted housing.”

Public Utility Regulatory Policies Act (PURPA) of 1978, 16 U.S.C. § 20601.

https://www.usbr.gov/power/legislation/purpa.pdf.

PURPA was developed to encourage equitable rates to electric customers, greater

conservation of energy supplied by electric utilities, and optimization of the facilities and

resources used by electric utilities. Increasing the level of granularity of information

concerning customer energy use was viewed as essential to meeting these goals, and

many policy changes and standards (e.g., prohibition of master metering in new

construction and standards for time-variant pricing) were suggested. PURPA required

each state regulatory authority and nonregulated utility to consider the adoption of a

number of standards, including the prohibition of master metering in new buildings,

within two years of the passage of PURPA. However, PURPA included provisions that

allowed the state to take into consideration applicable state laws when determining that

the new standards were applicable.

U.S. Department of Housing and Urban Development Guidance

24 CFR 965 at Subpart D. https://www.hud.gov/sites/documents/24CFR965UTILITY.PDF.

U.S. Department of Housing and Urban Development. n.d. “ECM: Miscellaneous ECMS, M4.

Install Checkmetering or Individual Metering.” U.S. Department of Housing and Urban

Development.

https://www.hud.gov/program_offices/public_indian_housing/programs/ph/phecc/strat_m4.

A description of submetering and various items for consideration when pursuing it.

———. n.d. “Multifamily Asset Management and Project Servicing (4350.1).” U.S. Department

of Housing and Urban Development.

https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh/4350.1.

———. 1992. “HUD Handbook 4350.1: Chapter 12. Energy Conservation.” U.S. Department of

Housing and Urban Development. https://www.hud.gov/sites/documents/DOC_35282.PDF.

———. 1998. “Utility Allowance Guidebook.” U.S. Department of Housing and Urban

Development. https://www.hudexchange.info/resource/2267/utility-allowance-guidebook/.

Environmental Protection Agency

U.S. Environmental Protection Agency. 2003. “Applicability of the Safe Drinking Water Act to

Submetered Properties.” Memorandum, U.S. Environmental Protection Agency, Regional

Administrators, Regions I–X. Washington, DC: U.S. Environmental Protection Agency.

https://nepis.epa.gov/Exe/ZyPDF.cgi/P100NBAL.PDF?Dockey=P100NBAL.PDF.

https://www.regulations.gov/document?D=EPA-HQ-OW-2007-0838-0001.

In 2003, the EPA issued a memorandum to revise its policy on submetering water systems

under the Safe Drinking Water Act (SDWA). Prior to this memorandum, the EPA required

property owners to meet all the drinking water requirements under SWDA section 1411. The

EPA determined that this policy was a disincentive to submetering. The EPA affirmed that

submetering is a tool for reducing water usage, and the application of submetering does not

change the quality of the water provided. As a result, owners submetering water usage are

not subject to additional quality standards. Also, in this memorandum, the EPA noted that

water savings from RUBS are uncertain; RUBS or other allocation systems do not meet the

definition of submetering. Therefore, this change in policy does not cover RUBS systems,

and “Primacy Agencies” (states) will need to determine if these systems are subject to the

requirements of SWDA section 1411.

Department of Energy

U.S. Energy Information Administration. 2015. An Assessment of Interval Data and Their

Potential Application to Residential Electricity End Use Modeling.

https://www.eia.gov/consumption/residential/reports/smartmetering/pdf/assessment.pdf.

The EIA and EERE conducted a research project on EIA’s energy consumption end-use

models for commercial and residential units. The study led to updates to modeling practices

and included an assessment of current interval data from advanced metering infrastructure

systems and submeter systems managed by utilities throughout the United States.

State and Local Resources

Arizona Department of Water Resources. 2018. Water Metering. Phoenix, AZ: Arizona

Department of Water Resources.

https://new.azwater.gov/sites/default/files/media/Metering%20Water%20-%20FINAL%2008-24-

18.pdf.

Description of the Arizona rules related to water submetering and types of applicable

meters.

Commonwealth of Massachusetts. 2020. “Electric Submetering.” Mass.gov.

https://www.mass.gov/service-details/electric-submetering.

Overview of resources and regulations pertaining to electrical submetering for

Massachusetts.

City and County of Honolulu, Department of Environmental Services. 2016. Submetering for

Irrigation. Honolulu, HI: City and County of Honolulu.

https://www.honolulu.gov/rep/site/env/wwm_docs/Submeter_Program_Information_June_2016.

pdf.

Guidelines for residential and irrigation water submetering.

The City of Seattle. 2004. Seattle Municipal Code Chapter 7.25, Questions and Answers. Seattle,

WA: City of Seattle.

http://www.seattle.gov/Documents/Departments/HearingExaminer/ResidentialThirdPartyBilling

QuestionsandAnswers.pdf.

Description of the Seattle rules related to utility submetering.

Department of Food and Agriculture, California Division of Measurement Standards. 2013. Field

Reference Manual: California Code of Regulation Title 4, Division 9. Sacramento, CA:

Department of Food and Agriculture Standards.

References submeter meter specifications and testing procedures.

Fambrough, Judon, and E.V. “Rusty” Adams, III. 2016. Landlords and Tenants Guide Special

Report No. 866. College Station: TX, Texas A&M University Real Estate Center.

https://trerc.tamu.edu/wp-content/uploads/2023/10/Landlord-and-Tenants-Guide.pdf.

Description of the Texas rules related to utility submetering.

Hirschfeld, Herbert E., Jospeh S. Lopes, Howard Schechter, and Ruth Learner. 2001. Residential

Electrical Submetering Manual. Prepared for the New York State Energy Research and Development Authority. Albany, NY: New York State Energy Research and Development.

Authority. https://www.nj.gov/emp/home/docs/pdf/080508_NJApartmentAssoc_FennessyC.pdf.

Legacy manual for electric submetering that guides policymakers and contractors.

Lopes, Joseph S., and Herbert E. Hirschfeld. 2018. Maryland Public Service Commission—

Master Meter Conversion Study. Prepared for the Maryland Public Service Commission.

Baltimore, MD: Maryland Public Service Commission. https://www.psc.state.md.us/wp-

content/uploads/Final-Master-Meter-Conversion-Study-2018.pdf.

Study of costs and benefits of transitioning Maryland metering from master metering to

submetering for certain applications of water, energy, and natural gas.

MeterNet. 2018. Sub-Metering Services. Guide to Water Sub-Meters in California, 5th ed.

Fallbrook, CA: MeterNet. https://meternetusa.com/assets/2018-california-sub-metering-

guide.pdf. Technical regulations for water submetering equipment in California.

New York State Energy Research and Development Authority (NYSERDA). 2021. “Submetering

for Multifamily Buildings.” NYSERDA. https://www.nyserda.ny.gov/All-Programs/Multifamily-

Building-Programs/Submetering.

NYSERDA website outlining the benefits of submetering multifamily buildings.

Penney, Brad, Zack Miller, and Quincy Dodge. 2017. Multifamily Housing and Energy Efficiency: An Opportunity for Virginia to Lead. Richmond, VA: Multifamily Energy Efficiency

Coalition.

https://assets.ctfassets.net/ntcn17ss1ow9/1gEt3gTYn0AwalZgkpo9IA/0794712cdeb2603506cd4

219be0dee01/MFEE-Report-11.10.pdf.

Overview of key strategies to improve energy efficiency for multifamily buildings,

including the application of submetering in Virginia.

Pacific Gas and Electric Company (PG&E). n.d. “Sub-Metered Tenant and Landlord

Responsibilities.” PG&E. https://www.pge.com/en/account/billing-and-assistance/understand-

your-bill/sub-metered-tenant-and-landlord.html.

Description of the utility’s rules related to water submetering.

Public Utility Commission of Texas. n.d. Utili-Facts: Submetered Utility Service for Property

Owners Guide. Austin, TX: Public Utility Commission of Texas.

https://www.puc.texas.gov/consumer/facts/factsheets/waterfacts/TenantGuideSubmeteredService

.pdf.

Description of the Texas rules related to water submetering.

Public Utility Commission of Texas. n.d. Utili-Facts: Submetering for Apartments, Condos and Mobile Home Parks. Austin, TX: Public Utility Commission of Texas.

https://ftp.puc.texas.gov/public/puct-info/consumer/facts/factsheets/elecfacts/submetering.pdf,

Description of the Texas rules related to electrical submetering.

San Francisco Public Utilities Commission. 2018. Residential Water Submetering in San Francisco: Frequently Asked Questions. San Francisco, CA: San Francisco Public Utilities

Commission. https://sfpuc.org/sites/default/files/documents/Residential-Submetering-

FAQs_Jun2018.pdf.

Description of the San Francisco rules related to water submetering.

Wilson, Brian C. 2001. A Water Conservation Guide for Public Utilities. Albuquerque, NM: New

Mexico Office of the State Engineer. https://www.ose.state.nm.us/WUC/PDF/nm-water-

manual.pdf.

Discusses benefits of water submetering and technology options.

Savings Potential

Alencar, Christine, and Douglas Livingston. 2019. “Piloting Sustainability in UVA Research

Labs.” White paper, University of Virginia (UVA), Charlottesville, VA.

https://sustainability.virginia.edu/sites/g/files/jsddwu1096/files/2023-

04/GreenLabsWhitepaper31119-ONLINE.pdf

Arboleda, Gustavo, and Melinda Goldman. 2002. Overview of Retrofit Strategies: A Guide for

Apartment Owners and Managers. Prepared for U.S. Department of Housing and Urban Development, Office of Policy Development and Research. Washington, DC: U.S. Department

of Housing and Urban Development. https://www.huduser.gov/Publications/PDF/Book1.pdf.

Overview of water conservation retrofit strategies for multifamily properties. Appendix C

includes a submetering regulations summary.

Booz, Allen and Hamilton. 1979. Alternative Metering Practices: Implications for Conservation

in Multifamily Residences. Prepared for the Assistant Secretary for Conservation and Solar Applications, Office of Building and Community Systems. Washington, DC: U.S. Department of

Energy.

Concluded that individual metering and separate billing reduced electricity consumption

by 15 to 20 percent and gas usage by 5 to 7 percent.

Bronin, Sara. 2012. “Building-Related Renewable Energy and the Case of 360 State Street,”

Vanderbilt Law Review 65 (6): 1875–1934.

https://scholarship.law.vanderbilt.edu/cgi/viewcontent.cgi?article=1366&context=vlr.

Lessons learned and policy analysis for submetering of building-related renewable energy

through a case study of 360 State Street in Connecticut.

General Services Administration. 2012. Submetering Business Case: How to Calculate Cost-Effective Solutions in the Building Context. Washington, DC: General Services Administration.

https://www.gsa.gov/system/files/Submetering_Business_Case_How_to_calculate_cost-

effective_solutions_in_the_building_context.pdf.

Financial implications of submetering in energy cost management strategies for water and

energy.

Goldman, C.A., and K.M. Greenly. 1986. “Measured Energy Savings in Retrofitted Multifamily

Buildings.” Paper presented at the 13th Energy Technology Conference, Washington, DC, March

17–19. https://escholarship.org/content/qt0bj1z1pk/qt0bj1z1pk.pdf.

Energy savings of 10 to 25 percent for submetering applications in multifamily buildings.

H2O Degree. 2016. “Cheverly Crossing Case Study: Submeter Data and Water Leak Detection Help Apartment Building Property Owner Cut Utility Expenses by Over Half.” Case study, H2O

Degree. http://www.h2odegree.com/library/casestudy_cheverly.pdf.

Case study for comprehensive water, electric, and natural gas submetering in a master-

metered apartment building in Maryland. Key results include the following:

• “Tracking electric usage at Cheverly Crossing immediately resulted in a 33%

decline in use. The three critical summer months in the first year of metering,

consumption was down by 49% compared to the same three months of the prior

year. Savings was $24,126 per year, of which $16,500 accrued in the summer months alone.”

• “While Cheverly Crossing reduced water use by 66% in the last 12 months

compared to the baseline, they reduced their water/sewer expense by over 80%.

The building’s water/sewer averaged $115 per apartment per month in the first nine months of 2008—in the first half of 2010, [it] dropped to an impressively

lower $13.25 average. In the first year after the submetering installation,

Cheverly’s total water/sewer expense went from $73,320 in 2008 down to a

significantly lower $13,565 during 2009. And since 2010, the results have been maintained at this low level.”

• “When the first year of submetering results from Cheverly Crossing were

analyzed, NOVO Properties showed a $70,000-plus per year cash flow

improvement and a $1.32 million boost in property valuation ($22,000 per unit).”

ICLEI, Institute for Market Technology. 2018. Commercial Energy Policy Toolkit—Factsheet for

Local Governments: Submetering. Bonn, Germany: ICLEI. https://www.imt.org/wp-

content/uploads/2018/02/Commercial_Energy_Policy_Fact_Sheet_-_Submetering.pdf.

Overview of the benefits and policy guidelines for commercial energy submetering.

King, Jennifer, and Christopher Perry. 2017. Smart Buildings: Using Smart Technology to Save

Energy in Existing Buildings. Washington, DC: American Council for an Energy-Efficient

Economy. https://eecoordinator.info/wp-content/uploads/2017/03/Smart-Building-Report.pdf.

As part of a larger package of smart technology, submetering can help to enable

additional energy savings from buildings.

Maruejols, Lucie, and Denise Young. 2011. “Split Incentives and Energy Efficiency in Canadian Multi-Family Dwellings,” Energy Policy 39 (6): 3655–3668.

Maruejols and Young (2011) reported that average energy usage by Canadian tenants of

low-rise apartments was more than twice as high as when utility costs were included in

the rent. These three studies are representative of the findings of other researchers and

reinforce the current messaging of the federal government (GSA) and state authorities

(various) that submetering can significantly reduce utility use.

Munley, Vincent G., Larry W. Taylor, and John P. Formby. 1990. “Electricity Demand in Multi-Family, Renter-Occupied Residences,” Southern Economic Journal 57 (1): 178–194. Wein, Olivia, and Charlie Harak. 2003. Soaking Tenants: Billing Tenants Directly for Water and Sewer Services. Boston, MA: National Consumer Law Center.

After evaluating electricity usage in an all-electric apartment complex in the Washington,

D.C. area, Munley, Taylor, and Formby found that tenants who did not pay for usage

consumed 32 percent more electricity on average than usage-paying tenants.

Pazuniak, Roman, Vincent Reina, and Mark Willis. 2015. Utility Allowances in Federally

Subsidized Multifamily Housing. New York: New York University, Furman Center.

https://furmancenter.org/files/NYUFurmanCenter_UtilityAllowances_June2015.pdf.

Offers strategies to reduce HUD portfolio energy usage through adjustments to utility

allowances.

Rao, Prakash, Michael Muller, and Garan Gunn. 2017. “Conducting a Metering Assessment to

Identify Submetering Needs at a Manufacturing Facility,” CIRP Journal of Manufacturing

Science and Technology 18: 107–114.

https://escholarship.org/content/qt9mn7b13n/qt9mn7b13n.pdf.

“This paper presents a metering assessment to identify the optimal use of submeters and

applications of the collected data at a manufacturing facility.... The benefits of conducting

a metering assessment are presented using an example from a [small to midsized

manufacturing] metal tube manufacturing facility.”

Stanton, Tom, and Katheryn Kline. 2016. Energy and Water Utility Billing Rules, Standards, and

Practices: A Survey of the State of the Art and Ideas About Future Directions. Silver Spring,

MD: National Regulatory Research Institute (NRRI). https://pubs.naruc.org/pub/FA85BBE5-

D376-1AC1-73FB-75434B8A758F.

“Summary of state utility billing rules and practices and related customer

communications. Explores possible linkages among the billing rules and practices and

related customer communications and how to improve them so that complaints might be

avoided. Based on the literature review and information gathered from state utility

regulatory commissions, consumer advocates, and utilities. Includes an inventory of

regulatory agencies and codes for each state.

“Part II reviews methods for the work, including a literature review, email survey of state

public utility regulatory commissions, and analysis of complaints data.”

U.S. Department of Energy, Energy Efficiency and Renewable Energy. 2011. Nissan North

America: How Sub-Metering Changed the Way a Plant Does Business. Washington, DC: U.S.

Department of Energy, Energy Efficiency and Renewable Energy, Industrial Technologies Program.

https://www1.eere.energy.gov/manufacturing/tech_assistance/pdfs/nissan_case_study_02.pdf.

“At its largest U.S. auto manufacturing facility in Smyrna, Tennessee, Nissan discovered

a wealth of savings opportunities through the plant’s sub-metering efforts. The process of

connecting all of the plant’s large, energy-consuming pieces of equipment to sub-meters

and a central software system was initially met with some reservation by plant staff

because it was viewed as a time-consuming project. However, once the plant was fully

metered and reports of end-use energy consumption profiles were generated, the value of

the new system and its capabilities were immediately recognized by staff and corporate

leaders alike.”

https://docplayer.net/19565043-Soaking-tenants-billing-tenants-directly-for-water-and-sewer-

services-by-olivia-wein-and-charlie-harak.html.

Need for customer protection to ensure benefits of water submetering.

Zhai, Zhiqiang, and Andrea Salazar. 2020. “Assessing the Implications of Submetering with

Energy Analytics to Building Energy Savings,” Energy and Built Environment 1 (1): 27–35.

https://www.sciencedirect.com/science/article/pii/S2666123319300029.

Analysis of the effectiveness of submetering for energy information systems for 21

building portfolios across the United States.

Submeters installed in green labs at UVA highlight opportunities for electricity and water

savings from submeters.

Appendix B: 50-State Submetering Regulation Review

Region 1

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

“The Public Utilities Regulatory Authority is in charge of regulating services and rates for electricity, natural gas, and water. Implementing billing services using submeters or ratio utility billing systems (RUBS) is allowed for electricity and water, but submetering is not allowed for natural gas billing.

“In July of 2013, the submetering laws in the state of Connecticut were redefined. Before this new legislation passed, submetering was only allowed at recreational campgrounds and individual slips at marinas for metering the electric use by individual boat owners.

“Now, thanks to a new energy bill signed into law by the Governor, any commercial, industrial, multifamily residential, or multi-use building where electric power or thermal energy is provided by a

CT Y (7, 8) 6 4, 5, 6) 1) Y (1, 2, 3, Class I renewable source is allowed to install submeters. 5 ”

Connecticut General Statutes Chapter 277 § 16-19ff. Submetering regulations and application process.

2) Regulations of Connecticut State Agencies; Title 16, 16-11-100.7 Definition of submetering

customer (facility or campground authorized by PURA).

3) 8 Regulations of Connecticut State Agencies; Title 16, 16-11-236. Calculating costs for

submeters.

4) Regulations of Connecticut State Agencies; Title 16, 16-11-237.9 Installation and maintenance

of submeters.

5 Banyan Utility. 2024. Connecticut. https://banyanutility.com/state-directory/connecticut/. 6 Connecticut General Statutes, Chapter 277, Department of Energy and Environmental Protection Public Utilities Regulatory Authority. § 16-19ff;

https://www.cga.ct.gov/current/pub/chap_277.htm#sec_16-19.

7 Regulations of Connecticut State Agencies; Title 16, 16-11-100; https://eregulations.ct.gov/eRegsPortal/Browse/RCSA?id=Title_16Subtitle_16-11Section_16-

11-100&content=submeter/.

8 Regulations of Connecticut State Agencies; Title 16, 16-11-236; https://eregulations.ct.gov/eRegsPortal/Browse/RCSA?id=Title_16Subtitle_16-11Section_16-

11-236&content=submeter/.

9 Regulations of Connecticut State Agencies; Title 16, 16-11-237; https://eregulations.ct.gov/eRegsPortal/Browse/RCSA?id=Title_16Subtitle_16-11Section_16-

11-237&content=submeter/.

44

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

5) 10 Connecticut PURA Submeter Application.

6) PMC Property Group, Inc., et al. v. Public Utilities Regulatory Authority et al., 2019 WL

1593888.11 Court decision on submetering in multifamily housing units.

7) Regulations of Connecticut State Agencies; Title 16, 16-11-55.12 Sale on a measurement basis

for water, submetering allowed with Commission approval only.

8) Water Submetering application form.

“As a general rule, the use of ratio utility billing systems (RUBS) and submetering is not prohibited in the state of Maine. The Public Utilities Commission is in charge of implementing utility billing rules in the state. They have not set forth any regulations that prevent the billing practices.”13

1) Maine Rev. Stat. Ann. Title 35-A, § 313.14 Submetering permitted in campgrounds.

Y (3,4,5) 2) 15 Maine Rev. Stat. Ann. Title 35-A, §313-A. Submetering by electric vehicle charging station

ME Y (1,2) providers. (municipalities)

3) City of Portland Water/Wastewater Submetering.16 Allows for deductive/subtractive and

sewer/reverse mode submetering for calculation of wastewater charges.

4) 17 Belfast Water District Sub-Metering. Water service submetering is determined by the utility on a

case-by-case basis.

10 CT PURA Submeter Application; https://www.ct.gov/pura/lib/pura/electric/Electric_Submetering_Instructions.pdf. 11 PMC Property Group, Inc., et al. v. Public Utilities Regulatory Authority et al., 2019 WL 1593888;

https://www.mitchellwilliamslaw.com/webfiles/PMC%20Property%20Group%20Inc%20v%20Public%20Utilities%20Regulatory%20Authority.pdf.

12 Regulations of Connecticut State Agencies; Title 16, 16-11-55; https://eregulations.ct.gov/eRegsPortal/Browse/RCSA/Title_16Subtitle_16-11Section_16-11-

55/.

13 Banyan Utility. 2024. Maine. https://banyanutility.com/state-directory/maine/.

14 Maine Legislature Revised Statutes, Title 35-A: Public Utilities, Chapter 3: Rates of Public Utilities, § 313; http://www.mainelegislature.org/legis/statutes/35-

A/title35-Asec313.html.

15 Maine Legislature Revised Statutes, Title 35-A: Public Utilities, Chapter 3: Rates of Public Utilities, § 313; http://www.mainelegislature.org/legis/statutes/35-

A/title35-Asec313-A.html.

16 City of Portland Water/Wastewater Submetering Program; https://www.portlandmaine.gov/DocumentCenter/View/1444/Rules-and-Regulations-for-the-Use-of-

the-Sewer-System?bidId=.

17 Belfast Water District Terms and Conditions; http://belfastwater.org/terms-conditions.htm.

45

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

5) Westbrook Planning & Code Enforcement, Wastewater Utility System Submeter Application.

Provides guidance on wastewater submetering provided Chapters 26 and 27 of the City of Westbrook City Ordinance are followed.

6) Maine Rev. Stat. Ann. Title 35-A, § 3210. Defines Thermal Energy and the ability for it to be

metered for an end user.

“According to the Massachusetts General Laws Chapter 186 Section 22: A landlord may cause to be installed by a plumber licensed in the commonwealth, at the expense of such landlord, submetering equipment in the landlord’s building to measure the quantity of water provided for the exclusive use of each dwelling unit, provided that such equipment meets the standards of accuracy and testing of the American Water Works Association or a similar accredited association; and provided further, that a sub-meter is installed for each dwelling unit in the building and for the common areas of the building, so that all water used in a building is measured by both a primary meter and a sub-meter. The practice of utility billing for natural gas, trash, and electricity is prohibited in the state of Massachusetts. The only billing practice that is allowed is billing for water using a submetering system. The property manager is not allowed to charge any fees.”18

1) Massachusetts General Laws Part 2, Title 1, Chapter 186, § 22.19 Submetering definitions and

MA N (2,3) N (2,3) Y (1) regulations for landlord submetering, including charges, customer protection, maintenance, terms

of agreement, etc. Also includes public housing development exemption.

2) Massachusetts Submetering Overview. Electric submetering is prohibited because it is the resale

of electricity. Owners of a multi-unit property with a single meter may recover utility costs from a tenant by including electricity in the tenant’s rent. Rent inclusion is permitted if the owner does not measure the tenant’s electricity use or charge the tenant separately for electric service based on usage.

3) Massachusetts State Sanitary Code, 410.354. Residential property owners are required by the

state Sanitary Code to pay for electricity for each unit unless the unit has a separate meter that is installed, maintained, and read by a utility company and a written rental agreement between the owner and the tenant provides for payment by the tenant in rent.

NH Y (5) “If the owners of the multitenant dwellings are not profiting from utility billing or providing utilities to the Y (3,4) Y (1,2) (Municipality) public in general, they are not regulated by the Public Utilities Commission. The restrictions include the

18 Banyan Utility. 2024. Massachusetts. https://banyanutility.com/state-directory/massachusetts/.

19 Massachusetts General Laws Part 2, Title 1, Chapter 186, Section 22. https://malegislature.gov/laws/generallaws/partii/titlei/chapter186/section22.

46

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

rules regarding the disclosure of specific information to the residents in the rental agreement. The information should include such things as who is responsible for the payment of utilities, trash, and other charges.”20

1) 21 New Hampshire Rev. Stat. Ann. Chapter Puc 502.15. Definition of master meter system for

natural gas.

2) New Hampshire Rev. Stat. Ann. Chapter Puc 505.01d.22 Prohibition of master metering without

written approval from the commission.

3) 23 New Hampshire Rev. Stat. Ann. Chapter Puc 302.14. Definition of electricity master metering.

4) 24 New Hampshire Rev. Stat. Ann. Chapter Puc 303.02. Prohibition of master metering for multiple

dwelling units.

5) Town of Bow, Code of the Town of Bow, Chapter 174. Water submetering permitted with prior

written approval.

In the state of Rhode Island, it is legal to bill the tenants for utilities. The terms of the agreement have to be included in the rental contract.25

RI Y (1)

1) 815-RICR-20-00-1 § 1.3A 19.26 Definition of master meter natural gas system and submetering.

“Vermont has the most complicated sets of rules and regulations when it comes to utility billing. In general, fees are allowed but regulated by some specific laws. However, if the fees become a source of profits for the property owners, they could spell legal trouble. Using the ratio utility billing system (RUBS) is not allowed in some cities. Vermont is considered one of the most complicated places to

VT (1,2) implement a submetering system. Vermont has specific rules regarding the meter approval and

licensing of installers.

“In the state of Vermont, a person operating a recreational campground may provide submetered electric service to campground users on a nonprofit basis if such service is provided in accordance with

20 https://banyanutility.com/state-directory/newhampshire/.

21 New Hampshire Code of Administrative Rules, Puc 500 Rules for Gas Service; https://www.puc.nh.gov/Regulatory/Rules/Puc500.PDF.

22 New Hampshire Code of Administrative Rules, Puc 500 Rules for Gas Service; https://www.puc.nh.gov/Regulatory/Rules/Puc500.PDF.

23 New Hampshire Code of Administrative Rules, Puc 300 Rules for Electric Service; https://www.puc.nh.gov/Regulatory/Rules/Puc300.PDF.

24 New Hampshire Code of Administrative Rules, Puc 300 Rules for Electric Service; https://www.puc.nh.gov/Regulatory/Rules/Puc300.PDF . 25 Banyan Utility. 2024. Rhode Island. https://banyanutility.com/state-directory/rhodeisland/.

26 815-RICR-20-00-1 1.3A 19; http://www.ripuc.ri.gov/rulesregs/divrules/REG_10851_20190822144131.pdf.

47

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

rules adopted by the board, including rules relating to notice of rates and charges, accuracy of electrical submeters, and reasonable billing and complaint procedures.”27

1) 30 V.S.A. § 249a. Campground submetering.28 Electric submetering for campgrounds.

2) 29 Vermont Utilities Electric Service Requirements Manual § 709. Sub Metering. A customer

may, at their expense, install, maintain, and operate check metering equipment, provided such equipment does not interfere with the Utility’s equipment. No electric energy shall be metered by a customer for resale to others.

27 Banyan Utility. 2024. Vermont. https://banyanutility.com/state-directory/vermont/.

28 Regulations of Connecticut State Agencies; Title 16, 16-11-55; https://eregulations.ct.gov/eRegsPortal/Browse/RCSA/Title_16Subtitle_16-11Section_16-11-

55/.

29 Vermont Utilities Electric Service Requirements Manual; https://greenmountainpower.com/wp-content/uploads/2016/08/VT-Utilities-Electric-Service-

Requirements-Manual.pdf.

48

Region 2

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

“In New Jersey, the jurisdiction of the Board of Public Utilities is not clear. According to the Board of Public Utilities, submetering is not allowed for natural gas and electricity except for existing, older submetering systems.

“In the state of New Jersey, the term ‘Submetering’ is the practice of generating profits from billing the residents. The term ‘Check metering’ is used when meaning not-for-profit billing practices.

“Billing for water and sewer is also allowed using master metering (RUBS) or check metering. The owners could also charge administrative fees related to billing processes.

“The New Jersey Board of Public Utilities authorizes submetering for industrial or commercial buildings, publicly financed and government-owned buildings, cooperative housing or condominiums, and charitable institutions. In 2005, the Board issued a 5-year pilot program for residential submetering of electricity and gas. Residential buildings constructed in the state of New Jersey after

NJ Pending (3), August 8, 2011, must install submeters.”30 N (1,2) Y (4) 31 1) New Jersey Administrative Code § 14:6-6.2 Definitions. General definition for a master

metered system.

2) New Jersey Administrative Code § 14:6-6.3 Service to master meter systems.32 3) No gas utility in this State shall provide gas service to any newly

developed master meter system as defined in N.J.A.C. 14:6-6.2.

4) 33 Assembly No 2910 218th Legislature Water Conservation and Metering Act. This bill

permits the submetering of water consumption in multifamily dwellings to promote water conservation.

5) State of New Jersey Board of Public Utilities, Division of Water, Order Approving Water

Submetering, Docket No. WO11060381, 8/18/11. Determination in response to the petition by the New Jersey Apartment Association finds that water submetering in newly constructed residential apartments is in accordance with the law and the public interest. Buildings constructed prior to the order are unable to submeter.

30 Banyan Utility. 2024. New Jersey. https://banyanutility.com/state-directory/newjersey/.

31 New Jersey Administrative Code § 14:6-6.2 Definitions; New Jersey Administrative Code § 14:6-6.2.

32 New Jersey Administrative Code § 14:6-6.3 Service to master meter systems, New Jersey Administrative Code § 14:6-6.3.

33 Assembly No 2910 218th Legislature Water Conservation and Metering Act; https://www.njleg.state.nj.us/2012/Bills/A2000/1577_I1.HTM.

49

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

“The practice of billing rental residents for utilities is allowed in the state of New York with a few restrictions.

“An application must be submitted to the Public Service Commission and approved prior to the start of a submetering system installation. The application requires specific information about the submetering system and the safeguards protecting the tenant’s rights and the language in the lease agreement describing the specifics. In addition to the above rules, the city of New York has extra regulations to monitor pollution and enforce water conservation.”34

1) 35 New York CRR Title 16 Part 96. General provisions for residential submetering in multi-unit

premises.

2) 9 CRR-NY 2202.16 Rent decrease for reduction of services, etc.36 Where the conversion is to

submetering of electricity, with the tenant purchasing electricity from the owner or a contractor retained by the owner, who purchases electricity from a utility at the bulk rate, such schedule of

NY Y (1, 2, 3, 4, rent reductions is based on the median monthly cost of electricity to tenants derived from data N (7) Y (8) 5, 6, 7) from the United States Census Bureau’s 2002 New York City Housing and Vacancy Survey, as

tabulated by the New York City Rent Guidelines Board, 51 Chambers Street, Suite 202, New York, NY, and available on its website at www.housingnyc.com, adjusted to reflect the bulk rate for electricity plus a reasonable service fee for the cost of meter reading and billing, based on the maximum estimated fee included in the Residential Electric Submetering Manual revised October 2001, published by the New York State Energy Research and Development Authority, 17 Columbia Circle, Albany, NY, and available on its website at www.nyserda.org, and reflected in Operational Bulletin 2003-1.

3) 9 CRR-NY 2102.4 Grounds for decrease of maximum rent.37 Every three years, the New York

State Energy Research and Development Authority issues a new residential electric submetering manual setting forth a new maximum estimated submetering service fee; DHCR shall move to amend the regulations to incorporate that document by reference.

4) New York Consolidated Laws, General City Law - GCT § 25-aa. Definitions.38 Definitions for

eligible energy users for special submetering rebates.

34 Banyan Utility. 2024. New York. https://banyanutility.com/state-directory/new-york-utility-regulations/.

35 New York CRR Title 16 Part 96.

36 9 CRR-NY 2202.16 Rent decrease for reduction of services, etc.

https://govt.westlaw.com/nycrr/Document/I4f87babdcd1711dda432a117e6e0f345.

37 9 CRR-NY 2102.4 Grounds for decrease of maximum rent. 9 CRR-NY 2102.4.

38 New York Consolidated Laws, General City Law - GCT § 25-aa. Definitions; https://codes.findlaw.com/ny/general-city-law/gct-sect-25-aa.html.

50

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

5) 39 New York Consolidated Laws General City Law Special Rebates $25-BB. Rebates for

energy redistribution in NYC.

6) New York Consolidated Laws, Public Service Law - PBS § 66-m. Green jobs-green New

York on-bill recovery.40 The commission shall not approve any application for the conversion to submetering of any master meter which is subject to any on-bill recovery charges.

7) 16 CRR-NY 231.1 Prohibition of residential submetering required.41 All gas corporations,

electric corporations, gas and electric corporations and municipalities other than those named in subdivision (a) of this section, which have not filed with this commission tariff provisions prohibiting the submetering of gas or electricity for residential purposes shall, within 30 days, after service of this Part, file appropriate amendments to their tariff schedules, to become effective on not less than 30 days’ notice to the public and this commission, prohibiting the submetering, remetering or resale of gas or electricity for residential purposes.

8) 42 20 CRR-NY 44.3 Activities not subject to tax. Where an owner of real property pays charges

for water supplied to a building, on a meter, frontage, or other basis, and in turn charges the tenant or tenants in the building for the quantity of water consumed by them at the same rates as he is required to pay, such owner is not considered a utility.

39 New York Consolidated Laws General City Law Special Rebates $25-BB. https://codes.findlaw.com/ny/general-city-law/gct-sect-25-bb.html.

40 New York Consolidated Laws, Public Service Law - PBS § 66-m. Green jobs-green New York on-bill recovery; https://codes.findlaw.com/ny/public-service-

law/pbs-sect-66-m.html.

41 16 CRR-NY 231.1 Prohibition of residential submetering required, 16 CRR-NY 231.1.

42 20 CRR-NY 44.3 Activities not subject to tax, 20 CRR-NY 44.3.

51

Region 3

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

“Billing tenants for utilities and submetering are allowed in the State of Delaware. The Public Service Commission does not regulate these activities for property owners who are not performing them for profit. Except for the metering systems that have been established prior to July of 1996, property owners can only charge for utilities using a submetering system, including water, gas, and electricity charges. In these cases, the use of ratio utility billing systems (RUBS) is not allowed. The landlord could also provide a trash bin for the tenants and charge for trash collection. The tenants cannot be charged for more than the actual cost of the utilities.

“When it comes to gas and water meters, the state of Delaware follows the standards set forth by the National Conference of Weight and Measures, which means that all metering equipment must

DE be approved by the National Type Evaluation Program (NTEP) and the National Institute of Y (1,2,3) Y (1,2,3) Y (1,2,3) 43 Standards & Technology (NIST) before being installed.”

1) Delaware Code Title 25 § 5312 Metering and charges for utility services.44 Landlords are

allowed to install and maintain meters for determination of utility services by each residential

rental unit. This rule was amended by 70 Del. Laws, c. 513, § 2; 80 Del. Laws, c. 71, § 1.

2) Delaware Code Title 25 Chapter 61 Commercial Leases § 6101 Metering and charges for

utility services.45 Commercial submetering for utility services is allowed for landlords if the bill does not exceed what it would have been under the public utility structure.

3) Delaware Code Title 25 Chapter 70 Manufactured Home Communities § 7020 Fees;

services; utility rates.46 Allowed fees and recovery for submetering of manufactured homes.

DC Y (1,2) Y (1,2) Commission to establish rules on cost allocation using submeters for natural gas and electricity. 1) Washington, DC Code § 34-1552 Commission to promulgate rules, including standards.47

43 Banyan Utility. 2024. Delaware. https://banyanutility.com/state-directory/delaware/.

44 Delaware Code Title 25 § 5312 Metering and charges for utility services. https://delcode.delaware.gov/title25/c053/index.shtml. 45 Delaware Code Title 25 Chapter 61 Commercial Leases § 6101 Metering and charges for utility services.

https://delcode.delaware.gov/title25/c061/index.shtml.

46 Delaware Code Title 25 Chapter 70 Manufactured Home Communities § 7020 Fees; services; utility rates.

https://delcode.delaware.gov/title25/c070/sc02/index.shtml.

47 Washington, DC Code § 34-1552 Commission to promulgate rules, including standards. http://dccode.org/browser/#/34/34-1552.

52

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

2) 48 Washington, DC Code § 34-1553 Energy submetering and energy allocation equipment.

Submetering is allowed if it is authorized in the rental agreement. Also establishes fees and recordkeeping for owners.

“Although utility billing for multifamily residential communities is allowed in the state of Maryland, several local restrictions may apply. The submetering systems need to be approved by the Maryland Public Service Commission for electricity and natural gas billing. Fees are either not allowed or permitted with very strict local regulations. Water and sewer billings are not regulated on the state level but are subject to local restrictions.”49

1) Maryland Code, Public Utilities, § 7-301.50 Submeters need to be authorized and tested by the

Commission.

Locally 2) 51 Maryland Code, Public Utilities, § 7-303. Definitions and determination of cost allocation and

MD verification. Y (1, 2, 3, 4) Y (1, 2, 3, 4) Determined Y (8,9) 52 3) Maryland Code, Public Utilities § 7-304.1. Definitions for master metering. (5,6,7) 4) Code of Maryland Regulations Title 20 Public Service Commission, Subtitle 25 Electric

and Gas Submeters, Chapter 20.25.01 General Regulations. 53 The purpose of submetering is to encourage effective conservation.

5) Montgomery County Code of County Regulations Chapter 29.00.01 Ratio Utility Billing

System.54 Tenant protection and regulations for master-metering and use of ratio utility billing systems for Montgomery County.

6) 55 Howard County Bureau of Utilities Water Only Submetering Policy. Commercial and

industrial water and wastewater submetering regulations and permitting for Howard County.

48 Washington, DC Code § 34-1553 Energy submetering and energy allocation equipment. http://dccode.org/browser/#/34/34-1553. 49 Banyan Utility. 2024. Maryland. https://banyanutility.com/state-directory/maryland/.

50 Maryland Code, Public Utilities, § 7-301. https://codes.findlaw.com/md/public-utilities/md-code-public-util-sect-7-301.html.

51 Maryland Code, Public Utilities, § 7-303. https://codes.findlaw.com/md/public-utilities/md-code-public-util-sect-7-303.html.

52 Maryland Code, Public Utilities § 7-304.1. https://codes.findlaw.com/md/public-utilities/md-code-public-util-sect-7-304-1.html. 53 Code of Maryland Regulations Title 20 Public Service Commission, Subtitle 25 Electric and Gas Submeters, Chapter 20.25.01 General Regulations.

http://mdrules.elaws.us/comar/20.25.01.01.

54 Montgomery County Code of County Regulations Chapter 29.00.01 Ratio Utility Billing System. http://montgomeryco-md.elaws.us/code/core_ch29_29.00.01.

55 Howard County Bureau of Utilities Water Only Submetering Policy. https://www.howardcountymd.gov/Departments/Public-Works/Bureau-Of-Utilities/Water-

Meter-Division/Bureau-of-Utilities-Water-Only-Submetering-Policy.

53

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

7) Washington Suburban Sanitary Commission Residential Submetering Policy and

Billing.56 Water and sewerage submetering and bill calculation for Washington Suburban Sanitary Commission Territory.

8) 57 Maryland Code, Education § 9.5-503. Childcare centers’ “required space” needs to have

submetered utilities.

9) Maryland Code, Housing and Community Development § 4-901.58 Regular Rehabilitation

Projects include providing utility submetering in residential rentals.

“Landlords and property managers in Pennsylvania are not subject to the regulations of the Public Utility Commission but only if the landlord does not make any profits from being a utility reseller.

“The use of master metering (RUBS) and submetering is allowed for water, sewer, natural gas, and electricity billing.”59

Y 1) Borough of Quakertown, PA Municipal Code Part 8 §824 Submetering.60 Submetering is

PA Where 2) Pennsylvania Code § 32.25(d)(4)(iii). Refers to situations where sales tax is and is not applied Y Y (4,5,6) Locally (Except expressly prohibited.

to a reseller of a utility.

Determined— 3) PPL Electric Utilities, Rules for Electric Service. Permits electrical submetering.

1) (3) 4) Pittsburgh Water & Sewer Authority, Procedures Manual for Developers.

5) Chapter 6—Domestic Water Service 6.5. Water submetering is the responsibility of the

building owner.

6) Philadelphia Regulations, Chapter 4 Water 01.5. Property owners may install submeters to

measure water for their purposes.

“The owners of multifamily dwellings may install submetering equipment or use master metering

VA Y (6,7) (1,2,3,4,5,6,7) Y Y (RUBS) to allocate the cost of utilities to the residents and charge them additional administration (1,2,3,4,5,6,7) fees for the collection and processing of the payments. The terms of the agreement have to be

clearly stated in the rental contract or lease agreement. There is a cap on late fees that may be

56 Washington Suburban Sanitary Commission Residential Submetering Policy and Billing. https://www.wsscwater.com/customer-service/rates/submeter.html.

57 Maryland Code, Education § 9.5-503. https://codes.findlaw.com/md/education/md-code-educ-sect-9-5-503.html.

58 Maryland Code, Housing and Community Development § 4-901. https://codes.findlaw.com/md/housing-and-community-development/md-code-hous-and-

cmty-dev-sect-4-901.html.

59 Banyan Utility. 2024. Pennsylvania. https://banyanutility.com/state-directory/pennsylvania/.

60 Borough of Quakertown, PA Municipal Code Part 8 $824 Submetering. https://ecode360.com/31568241.

54

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

charged. The companies engaged in installing the metering equipment have to be certified by the Department of Professional and Occupational Regulation.”61

1) Virginia Administrative Code Chapter 305. Rules for Electricity and Natural Gas

Submetering and for Energy Allocation Equipment 20VAC5-305-10. Definitions.62 Definitions for submetering and submetering equipment.

2) Virginia Administrative Code Chapter 305. Rules for Electricity and Natural Gas

Submetering and for Energy Allocation Equipment 20VAC5-305-20. General

Requirements. Submetering can only be used if all units utilize submetering and it is included in the rental or lease agreement. No restriction for mixed-use buildings so long as each use has a submeter.

3) Virginia Administrative Code Chapter 305. Rules for Electricity and Natural Gas

Submetering and for Energy Allocation Equipment 20VAC5-305-40. Submetering. When submeters are installed, all charges for electricity or natural gas used, except the allowed service charge, shall be calculated from the readings of such submeters.

4) Virginia Administrative Code Chapter 305. Rules for Electricity and Natural Gas

Submetering and for Energy Allocation Equipment 20VAC5-305-90. Billing for apartment

houses, office buildings, and shopping centers.

5) Virginia Administrative Code Chapter 305. Rules for Electricity and Natural Gas

Submetering and for Energy Allocation Equipment 20VAC5-305-100. Billing for

campgrounds.

6) 63 Code of Virginia Title 56 Chapter 10 § 56-245.2. Definitions. Definitions for submetering

and energy allocation equipment.

7) Code of Virginia Title 55.1 Chapter 12 § 55.1-1212 (Effective October 1, 2019). Energy

submetering, energy allocation equipment, sewer and water submetering equipment, and

ratio utility billing systems; local government fees.64

61 Banyan Utility. 2024. Virginia. https://banyanutility.com/state-directory/virginia/. 62 VA Administrative Code Chapter 305. Rules for Electricity and Natural Gas Submetering and for Energy Allocation Equipment.

https://law.lis.virginia.gov/admincodeexpand/title20/agency5/chapter305/.

63 Code of Virginia Title 56 Chapter 10 § 56-245.2. Definitions. https://law.lis.virginia.gov/vacode/56-245.2/. 64 Code of Virginia Title 55.1 Chapter 12 § 55.1-1212 (effective October 1, 2019). Energy submetering, energy allocation equipment, sewer and water

submetering equipment, and ratio utility billing systems; local government fees. https://law.lis.virginia.gov/vacode/55.1-1212/.

55

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

“In West Virginia, allocation of utility costs from the landlords to the tenants is allowed. The use of master metering (RUBS) or submetering to bill tenants for utilities is not prohibited.”65

1) West Virginia Code ARTICLE 6A. RESIDENTIAL RENTAL SECURITY DEPOSITS. §37-6A-1.

Definitions. 66 If the rental agreement so provides, a landlord may use submetering equipment,

WV Y (1) Y (1) Y (1) energy allocation equipment, or a ratio utility billing system.

2) Potomac Edison Company, Rates and Rules & Regulations for Electric Service in Certain

Counties in West Virginia, 19. Master Metering, Multi-unit residential buildings constructed after 1982 must be individually metered unless an exemption is deemed proper. Submetering is not permitted.

65 Banyan Utility. 2024. West Virgina. https://banyanutility.com/state-directory/west-virginia-utility-regulations/. 66 West Virginia Code Article 6a. Residential Rental Security Deposits. §37-6A-1. Definitions.

http://www.wvlegislature.gov/wvcode/ChapterEntire.cfm?chap=37&art=6A&section=1.

56

Region 4

Utility Eligible for Submetering

State Water Description/Sources

Electricity Natural Gas Other

Wastewater

“The Utility Services Division of the Alabama Public Service Commission is responsible for the regulation of natural gas utilities, wireline telecommunications, and private water and wastewater utilities. The Utility Services Division consists of an Economic Compliance Group and a Service Compliance Group. The Service Compliance Group includes the Telecom Services Section and the Consumer Services Section. The Consumer Services Section is responsible for consumer inquiries and complaints regarding electric service, natural gas, and water and sewer services. The Alabama Public Service Commission does not regulate property owners who do utility billing for their tenants, including electricity, gas, and trash billing, using submeters or ratio utility billing systems (RUBS).”67

The state of Alabama requires any utility with 100 or more customers to sell water based on

Y (3,4,5) metered volume. The only exceptions are temporary service, water used for street sprinkling

(Multi-Building protection, and any other flat-rate arrangement that the commission has approved. and sewer flushing (certain conditions apply), water used for public and private fire

AL N Y (1) Y (2) Condominiums

/Mobile All meters used by any utility in the state must meet the standards for cold water meters as

Homes) set forth by the American Water Works Association.

1) Alabama Public Service Commission Water Rules W-13. 68 Generally, requires all

water sold by a utility with 100 or more customers to be based on metered volume sales. The rule allows utilities to provide a flat rate or estimated service for temporary service where the water use can be readily estimated, for public and private fire protection, and for street sprinkling and sewer flushing under certain circumstances. Other flat-rate service arrangements must be approved by the commission.69

2) General Rules of the Alabama Public Service Commission: Meter Rentals (Rule

7). 70 No rental shall be charged by any utility for any meter installed by it which is used by the utility as the basis for rendering its bills, except where such additional meter is furnished by utility at the request of the customers for submetering or for convenience of

67 Banyan Utility. 2024. Alabama. https://banyanutility.com/state-directory/alabama/. 68 Water Rules of the Alabama Public Service Commission W-13. https://psc.alabama.gov/wp-content/uploads/2021/12/WaterRules.pdf.

69 https://www.ncsl.org/research/energy/utility-submetering.aspx.

70 General Rules of the Alabama Public Service Commission (Rule 7). http://www.psc.alabama.gov/Administrative/GenRules_01_10_05.pdf.

57

Utility Eligible for Submetering

State Water Description/Sources

Electricity Natural Gas Other

Wastewater

the customer. Where additional meters furnished by the utility are to be used as submeters or for the convenience of the customer, a charge for such meters may be made in accordance with a schedule approved by the Commission.

3) § 27A:5. Form—Bylaws of multi-building, mixed-use condominiums.71 6.22.6.

“Rates and charges to be paid by Unit Owners shall be based on the actual cost of the energy consumed. The Condominium Board or its agent may charge the Unit Owner the actual cost of providing an electricity billing statement charged by the Managing Agent or a submetering company. The capital and repair costs of the electronic submetering equipment will not be passed on to Unit Owners as part of their charges for electrical service. The capital costs of submetering the Property have been included in the Purchase Price for each Unit. Any costs for repair of the submetering system will be treated as a Residential Common Expense of the Condominium and paid for through Residential Common Charges.”

4) Decker v. Marshall: Caselaw on electric utility submetering in mobile home

parks.72 Precluded cooperative from selling electricity for submetering or resale, but did not preclude cooperative’s policy as to mobile home park owners’ metering and billing options respecting tenants, which allowed service to be billed in owner’s name and owner to be responsible for collection and payment of bill for electric service to tenant.

5) Davidson v. Marshall-DeKalb Elec. Co-op.73 Submetering/Resale Restriction.

FL Y (1,2) Case Law: “Many restrictions apply on the local level, but submetering practice is permitted on the state level. Using ratio utility billing systems (RUBS) and submetering are allowed by the state of N (7) Y Viterra Energy Florida for electricity, gas, and water. Some restrictions are employed by different counties in N (11, for (3,4,5,6,8,10,12) Florida. resale, (Municipalitie Servs. v.

depending on Gateway GP s) (Municipalities) “As an example, in Osceola County, Toho Water Authority is in charge of water resources. Sawgrass Mills, municipality) They have specific regulations prohibiting the owners of multifamily residential units from Inc. , 858 So. 2d charging administrative fees as part of submetering utility billing. They also require the

71 § 27A:5. Form—Bylaws of multi-building, mixed use condominiums, 10 Com. Real Estate Forms 3d Appendix 27A § 27A:5. 72 Decker v. Marshall-DeKalb Elec. Co-op., 659 So. 2d 926 (Ala. 1995).

73 Davidson v. Marshall-DeKalb Elec. Co-op., 495 So. 2d 1058 (Ala. 1986).

58

Utility Eligible for Submetering

State Water Description/Sources

Electricity Natural Gas Other

Wastewater

1208 (Fla. Dist. submetering systems to be approved by the Toho Water Authority and to be inspected for

Ct. App. 2003) accuracy within the required time intervals.

“In Miami-Dade County, the use of ratio utility billing systems (RUBS) is not allowed for water and electricity billing. The submetering systems have to be approved and the meters have to

Fla. Pub. Serv. 74 be tested for accuracy.”

569 So. 2d Although submetering is permitted in Florida, it is not required. According to the Fla. Com v. Bryson,

1253 (Fla. Administrative Code §25-6.049, “Where individual metering is not required and master metering is used in lieu thereof, reasonable apportionment methods, including submetering, 1990) may be used by the customer of record or the owner of such facility solely for the purpose of

allocating the cost of the electricity billed by the utility.”

Falk 1) Florida Administrative Code § 25-6.049.75 “Where individual metering is not required v. Beard ,

1086 (Fla. including submetering, may be used by the customer of record or the owner of such 76 facility solely for the purpose of allocating the cost of the electricity billed by the utility.” 614 So. 2d and master metering is used in lieu thereof, reasonable apportionment methods,

1993)

2) 2012 Legis. Bill Hist. Florida H.B. 7117.77 In order to fulfill the submetered data

reporting requirements, agencies will be required to install submeters for total building electrical consumption and demand at all state-owned and metered state-leased facilities larger than 5,000 net square feet. Where a building has particularly large energy consuming systems such as heating, ventilation & air conditioning (HVAC) or water heaters, additional submetering requirements may apply. This plan also outlines acceptable submetering schemes for all types of energy-consuming systems found in state buildings.

3) Fort Myers Beach, Florida, Code of Ordinances § 30-24 (g).78 This category of

service is available where submetering or separate metering is desired or needed. This type of service must be approved by the town manager or designee. Submeters are for

74Banyan Utility. 2024. Florida. https://banyanutility.com/state-directory/florida/.

75 https://www.flrules.org/gateway/RuleNo.asp?title=ELECTRIC%20SERVICE%20BY%20ELECTRIC%20PUBLIC%20UTILITIES&ID=25-6.049.

76 https://www.ncsl.org/research/energy/utility-submetering.aspx.

77 2012 Legis. Bill Hist. FL H.B. 7117.

78 Fort Myers Beach, Florida Code of Ordinances Sec. 30-24.

59

Utility Eligible for Submetering

State Water Description/Sources

Electricity Natural Gas Other

Wastewater

customers’ benefit only, and only actual charges for service may be billed to the

submetered properties. No administrative costs or other charges may be added by the owner. The town does not maintain, read, or otherwise utilize submeter information for billing purposes.

4) Panama City Beach, Florida, Code of Ordinances § 23-14 (3).79 The City Manager is

authorized and directed to grant a franchise to submeter and resell potable water service, or potable water and sewer service if available, to each landlord or nonprofit entity meeting the requirements of Section 23-32(a) who shall supply and update annually such information as the City Manager may require in order to determine that such requirements are being met.

5) Fort Myers, Florida, Code of Ordinances § 90-2 (c) (2).80 The owner of the building or

development may only bill to tenants the actual charges of water and sewer service, plus sales tax, to the building or development, as billed to the owner by the city. The owner may add no administrative costs or other charges. Any owner engaging in submetering shall provide to the utility billing department a detailed description of the methods used in submetering, demonstrating the charges to the consumers do not exceed rates charged by the city.

6) 81 Hernando County, Florida, Code of Ordinances § 28-238 (b) (1-3). Up to a total of

four (4) residential units shall be considered a separate unit for payment of water and sanitary sewer fees and charges, and separate connections (water and/or sanitary sewer), and water meters shall be required for each unit.

7) If a landlord or condominium association with a master meter chooses to submeter

individual units within a multi-unit complex, whether residential or commercial, such landlord or condominium association shall not be considered a utility subject to

regulation by the county if the landlord or association provides service solely to its own tenants or unit owners without specific compensation for such utility service.

79 Panama City Beach, Florida Code of Ordinances Sec. 23-14.

80 Fort Myers, Florida Code of Ordinances Sec. 90-2.

81 Hernando County, Florida Code of Ordinances Sec. 28-238.

60

Utility Eligible for Submetering

State Water Description/Sources

Electricity Natural Gas Other

Wastewater

8) The department may require a submetering agreement defining ownership and

responsibility for maintenance of any lines between the point of connection and any submeters as a condition for department approval of plans for development.

9) Chattahoochee, Florida, Code of Ordinances § 60-1.82 Resale of natural gas is

prohibited, even by means of submetering.

10) 83 Altamonte Springs, Florida, Code of Ordinances § 26-91.

a. Multifamily subdivisions and condominium complexes shall be master metered at

the public right-of-way or public utility easement.

b. Commercial development shall have a master meter serving each lot or

developable building site. The master meter shall be located at the public right-of-way or public utility easement. On-site water systems downstream of and served by a master meter assembly shall be maintained by the homeowners association, owner’s association, or the property owner. The installation, operation,

maintenance and reading of submeters shall be the responsibility of the property owner or established association.

11) Chattahoochee, Florida, Code of Ordinances § 59-1. Resale of electrical current

prohibited.

12) Code of Ordinances City of West Palm Beach, Florida, § 90-31. Water submetering

permitted provided charges are not above cost.

GA Y “The current laws and regulations in Georgia allow submetering and ratio utility billing Georgia utilizes Y (1,2) systems (RUBS) for all utilities. The owners of multifamily residential units could install master meters (Municipalities) Master meters— meters to measure the utility consumption in each housing unit and bill the residents often, which accordingly. The owners could also charge reasonable fees for installing, maintaining, and Municipalities involves using Depending on N control master billing of the metering systems. The only restriction is that the terms of the charges should the same meter the 84 meter be disclosed to the tenants prior to the establishment of a lease contract.” for multiple municipality, regulations for occupancies on the resale of mobile home a multi-unit electrical

82 Chattahoochee, Florida Code of Ordinances Sec. 60-1.

83 Altamonte Springs, Florida Code of Ordinances Sec. 26-91.

84 Banyan Utility. 2024. Georgia. https://banyanutility.com/state-directory/georgia/.

61

Utility Eligible for Submetering

State Water Description/Sources

Electricity Natural Gas Other

Wastewater

current is parks often property or Under the 2010 Water Stewardship Act, all new multi-unit residential buildings and certain prohibited. (installed by the businesses. retail and light industrial buildings in the state of Georgia that were granted a construction

county), multi- RUBS are used permit after July 1, 2012, are required to install submeters.

buildings wastewater use based on their measured usage. Although not required, the act also natural gas, All tenants in buildings that were built after this date must be charged for water and residential for electricity,

water (although encourages property owners of existing multi-unit buildings to install and start using sewer, and

how they are submeters. regulated is 1) 2010 Water Stewardship Act.85 Requires submetering of each new multi-unit building based on the and certain retail and light industrial buildings. Tenants must be charged for water and

municipality). wastewater based on their usage. Encourages but does not require the installation of

Many municipal submeters in existing multi-unit buildings.

available for 2) 16 Southeast Transaction Guide § 305.03 (2019). Master meter—relationship to statutes are

master condominiums. metering 3) Georgia. Comp. R. & Regs. r. 391-3-5-.02 (Lexis Advance through Rules and regulations. Regulations Filed through January 24, 2020). Definitions.

4) Relevant Municipal Documents (ordinances/definitions)

5) Atlanta, Georgia, Code of Ordinances § 8-2002.

6) Atlanta, Georgia, Code of Ordinances § 154-115.

7) Effingham County, Georgia Code of Ordinances § 5.4.

8) Palmetto, Georgia, Code of Ordinances § 6-31.

9) Roswell, Georgia, Code of Ordinances § 24.5.9.1.

10) Wayne County, Georgia Code of Ordinances § 32-111.

Related “According to the Kentucky Public Utility Commission rules, landlords who are not making a

KY caselaw: N N Y (1) profit from billing their tenants are not considered a public utility and are exempt from their

Dennis rules.

Anderson Park

85 2010 Water Stewardship Act. http://www.legis.ga.gov/Legislation/20092010/103008.pdf.

62

Utility Eligible for Submetering

State Water Description/Sources

Electricity Natural Gas Other

Wastewater

Lake “The landlords are permitted the use of ratio utility billing systems (RUBS) and submetering

Apartments, for electricity and natural gas. The property managers are also allowed to charge the tenants

LLC v. for trash. Water billing is also allowed, and the owners may charge reasonable fees provided

Louisville & all rates and terms are disclosed in the rental agreement.”86

Jefferson Cty.

Dist. provisions. A property using a submeter in this context will not be considered a public , No. 2012- water system and will not be regulated by the Kentucky Public Service Commission. CA-000288- Metro. Sewer 87 401 KAR 8:020. Public and semipublic water systems; submetering; general

Landlords may only charge tenants for actual water usage as measured by the submeter.

MR, 2014 Ky.

App. Unpub.

LEXIS 822 (Ct.

App. Oct. 17,

2014)

“Regulating utilities, including electric, gas, water, and sewer, is the responsibility of the Mississippi Public Service Commission (MPSC).

“Using submetering for water billing is allowed but not the use of the ratio utility billing system (RUBS). The tenants may be charged for water and sewer separately.

“The use of a submetering system for billing has to be disclosed to the tenants, and a written acknowledgment has to be obtained from them.” 88

MS N N Y (1,2)

1) Mississippi Code. Ann. § 77-3-97.89 A multi-unit building owner or manager may

provide for submetering of each dwelling or rental unit in order to measure the water usage. If submetering is utilized, tenants may be charged separately for water and wastewater usage. Each owner/manager must disclose the use of submetering to each tenant in a written document.

2) 2002 Mississippi ALS 513, 2002 Mississippi Laws 513, 2002 Mississippi S.B. 2797.

An act to promote the conservation of water resources through the authorization of

86 Banyan Utility. 2024. Kentucky. https://banyanutility.com/state-directory/kentucky/. 87 401 Ky. Admin. Regs. 8:020.

88 Banyan Utility. 2024. Mississippi. https://banyanutility.com/state-directory/mississippi/.

89 Miss. Code. Ann. § 77-3-97 (West). https://www.ncsl.org/research/energy/utility-submetering.aspx.

63

Utility Eligible for Submetering

State Water Description/Sources

Electricity Natural Gas Other

Wastewater

submetering of water and wastewater services being provided to residents of multi-unit dwellings.

“Utility billing using a master metering (RUBS) system is not allowed in North Carolina. The residential rental units must have a separate submeter that measures the actual utility usage of the residents. This requirement is true for water, sewer, electricity, and natural gas billing systems implemented by the rental unit owners or their agents. A maximum administration fee of $3.75 per month could be applied for water billing if it is approved by the Utilities Commission.”90

1) Article 9E. Master Electrical and Natural Gas Meters Prohibited. § 143-151.42.

Prohibition of master meters for electric and natural gas service.91 “[I]t shall be unlawful for any new residential building, as hereinafter defined, to be served by a master meter for electric service or natural gas service. Each individual dwelling unit shall have individual electric service with a separate electric meter and, if it has natural

NC Y (6) Y (2,6) Y (3,6) gas, individual natural gas service with a separate natural gas meter, which service and

meters shall be in the name of the tenant or other occupant of said apartment or other dwelling unit. No electric supplier or natural gas supplier, whether regulated public utility or municipal corporation or electric membership corporation supplying said utility service, shall connect any residential building for electric service or natural gas service through a master meter, and said electric or natural gas supplier shall serve each said apartment or dwelling unit by separate service and separate meter and shall bill and charge each individual occupant of said separate apartment or dwelling unit for said electric or natural gas service.”

2) 92 North Carolina G.S.A. § 62-50 § 62-50. Safety standards for gas pipeline facilities.

Regulatory authority for gas/natural gas brought to mobile home parks/condos/multi-unit dwellings and measured on a submeter.

90 Banyan Utility. 2024. North Carolina. https://banyanutility.com/state-directory/northcarolina/.

91 https://www.ncleg.net/EnactedLegislation/Statutes/HTML/BySection/Chapter_143/GS_143-151.42.html.

92 N.C. Gen. Stat. Ann. § 62-110.

64

Utility Eligible for Submetering

State Water Description/Sources

Electricity Natural Gas Other

Wastewater

3) 93 § 62-110 (g). Certificate of convenience and necessity. Billing procedures for water

usage in multi-unit dwellings. A lessor shall not utilize a ratio utility billing system or other allocation billing system that does not rely on individually submetered hot water usage to determine the allocation of water and sewer costs.

4) North Carolina Gen. Stat. Ann. § 130A-315 (d).94 “Water quality regulations…When a

person that receives water from a public water system is authorized by the Utilities

Commission, pursuant to G.S. 62-110(g), to charge for the costs of providing water or sewer service, that person shall not be subject to regulation under this Article solely as a result of submetering and billing for water service. The supplying water system shall perform the same level of monitoring, analysis, and record keeping that the supplying system would perform if the providing water system had not been authorized to charge

for the costs of providing water or sewer service pursuant to G.S. 62-110(g).”

5) 20 North Carolina Index 4th Landlord and Tenant § 68.95 Please see for links to

applicable statutes.

6) 96 North Carolina Gen. Stat. Ann. § 42-42.1. Allows landlords to bill via submetered

quantities in an effort to promote conservation. Places limitation on ability of landlord to shut off utilities for nonpayment purposes.

Many municipal “The Public Service Commission in South Carolina has ruled that the Office of Regulatory codes exist Staff is not involved in setting rates charged for utilities by the landlord resellers. According

SC Y (1,2) regulating the to the rules, tenants and landlords may include any legal terms in the rental contract, 97 N (4) N (4) use of master including the utility charges, if both sides are in agreement.” (Municipalities) meters for 1) York, South Carolina, Code of Ordinances § 44-89. All water service shall be water and rendered on a metered basis (except for private hydrants and sprinklers). Mobile home wastewater. (3) park owners may contract with the city to connect each home to the line within the park.

93 N.C. Gen. Stat. Ann. § 62-110.

94 N.C. Gen. Stat. Ann. § 130A-315.

95 20 N.C. Index 4th Landlord and Tenant § 68.

96 N.C. Gen. Stat. Ann. § 42-42.1.

97 Banyan Utility. 2024. South Carolina. https://banyanutility.com/state-directory/southcarolina/.

65

Utility Eligible for Submetering

State Water Description/Sources

Electricity Natural Gas Other

Wastewater

The city will handle the master meter readings and billing; the mobile home park owners will maintain the master meters.98

2) Batesburg-Leesville, South Carolina, Code of Ordinances § 8-2.99 Mobile home

parks intended to supply rental dwellings will be equipped with a master meter. Mobile home parks in which each dwelling is intended for individual ownership shall be provided with individual meters at each property. Mobile home parks that change primarily from individual ownership to rentals will be required to install a master meter.

3) Submeter.com/submetering-in-south-carolina.100 Submetering in South Carolina

requires knowledge of the state utility management rules. Although submetering for gas and electric is not regulated, water is. In addition, the resident’s lease must allow for utility billing.

South Carolina Code of Regulations, Chapter 103, 103–327. Master Metering. New apartments must be directly metered, with some exceptions.

Current “The state of Tennessee provides one of the most tolerant sets of rules when it comes to legislation in billing tenants for utility services. Submetering and master metering (RUBS) are allowed and progress— not regulated.” 101 established to

reach energy 1) 2019 Bill Text Tennessee H.B. 2570.102 Provide for an independent measurement and

TN N (1) N (1) Y (2,3,4,5) use objectives verification audit of measured energy use every twelve (12) months following the

on new occupancy of the building.

construction. 2) 1999 Bill Text Tennessee H.B. 3159.103 Multi-unit dwelling owners may not charge (1) individual units separately for each dwelling’s water consumption unless each unit has

its own, provided submetering unit.

98 York, South Carolina Code of Ordinances Sec. 44-89.

99 Batesburg-Leesville, South Carolina Code of Ordinances Sec. 8-2.

100 NES. 2023. Submetering in South Carolina. https://www.submeter.com/submetering-in-south-carolina/.

101 Banyan Utility. 2024. Tennessee. https://banyanutility.com/state-directory/tennessee/.

102 2019 Bill Text TN H.B. 2570.

103 1999 Bill Text TN H.B. 3159.

66

Utility Eligible for Submetering

State Water Description/Sources

Electricity Natural Gas Other

Wastewater

Municipalities 104 3) 2001 Bill Text Tennessee H.B. 566. Every master meter customer is responsible for have also maintenance and repair of its submeter facilities that are separate from the master

enacted meter. Every water utility shall have the right to refuse to provide service to submetered

legislation facilities. Every water utility offering service to submetered facilities shall have the right

regulating to establish and collect such fees and charges as it determines proper for such services.

water and 105 4) 2003 Bill Text Tennessee S.B. 768; same as 2003; Bill Text Tennessee H.B. 794 . stormwater Submetering regulations and billing for water and wastewater (includes definitions). meters.

Clarksville, water contamination levels provided through master meters. 5) 2008 Tennessee Regulation Text 10515.106 Regulation—specific monitorization of

Tennessee

Code of 6) Tennessee Compiled Rules & Regulations, Chapter 1220, 1220-04-04-.07

Ordinances § Disposition of Electricity (2) Master Metering. Direct metering required in new

13-309 apartment construction or renovations that require rewiring except for electricity for

central heating, ventilation, and AC. Does not apply to hotels, campgrounds, hospitals,

Memphis, or dormitories.

Tennessee

Code of Relevant Caselaw: Bd. of Waterworks of Baxter v. Smith Util. Dist. of Smith Cty., No. 86-

Ordinances § 324-II, 1987 Tenn. App. LEXIS 2543 (Ct. App. Mar. 6, 1987).

9-76-19

Millersville,

Tennessee

Code of

Ordinances §

19-127

104 2001 Bill Text TN H.B. 566.

105 2003 Bill Text TN S.B. 768; same as 2003; Bill Text TN H.B. 794.

106 2008 TN Regulation Text 10515.

67

Region 5

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

“The use of ratio utility billing systems is allowed for billing the tenants of a

multifamily housing unit in Illinois. The landlord is required to provide the tenants with a copy of the formula that is used to calculate the allocated utility payments

between the residents of the community. This information shall be provided to the tenants before demanding payments for the utilities. The main emphasis is on

disclosure of the information.

“The owners are not allowed to charge more than the total amount they are being charged by the public utilities. The tenants could request a copy of the public

IL Y (1,2) 107 utility bill from the landlord for their records.”

1) 83 Illinois Administrative Code 280. General rules and regulations on

metering gas, electric, water, and sewer. Does not explicitly discuss

submetering.

a. Summary: https://www.icc.illinois.gov/consumer/education/rules.aspx.

2) Illinois Statutes Chapter 765. Property § 1.2 prohibits switching “from

landlord-paid master metered utilities to tenant-paid individually metered

utilities or from landlord-paid to tenant-paid utilities” during a lease term.

“The responsibility of regulating different utilities rests upon the Indiana Utility

Regulatory Commission (IURC). Although the use of master metered (RUBS)

public utility services are not prohibited, the Indiana Utility Regulatory

Commission is favoring the use of submetering systems.

“The landlord may charge fees for the billing of water and sewer, including a set-

IN up fee, an administration fee of no more than $4/month, and a returned check Y (1) N Y (2,3) fee. The utility bill should contain an itemized list of fees, a description of services,

and a disclosure regarding the tenant’s right to file a complaint with the Indiana

Utility Regulatory Commission about excessive charges. Charging fees are not

allowed for electricity billing.

“In the state of Indiana, submetering equipment may be installed in individual

units of rented or leased units in a building or in individual units of a building

107 Banyan Utility. 2024. Illinois. https://banyanutility.com/state-directory/illinois/.

68

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

exempt from commission rules on master metering to fairly allocate the cost of

each unit’s electrical consumption.”108

1) Indiana Code § 8-1-2-36.5. Lays out rules on submetering installation and

billing for electricity.

2) Indiana Code 8-1-2-1.2. Regulations on water submetering.

3) Indiana Administrative Code 170 IAC Article 15. Regulations on water

submetering.

a. Factsheet: https://iaaonline.net/wp-content/uploads/2019/01/Utility-

Sub-Billilng-FAQs-from-IURC.pdf.

“The rules concerning utility billing are different for different parts of Michigan. The use of ratio utility billing systems (RUBS) and submetering is permitted for

electricity billing.

“In areas of the state that are serviced by Michigan Consolidated Gas Company, billing for natural gas is not permitted. Michigan Public Service Commission does not regulate water or sewer billing systems.”109

MI Y (N—Certain governing the practice of utility submetering or allocation in Michigan. However, Submetering for Y Y local jurisdictions may have enacted such measures.” 110 Municipalities) (3) Electric “With the exception of natural gas, there are no statewide rules or regulations

Mobile Home

Parks (4) 1) Michigan Gas Utilities Corporation (provider in Western and Southern

Michigan) prohibits gas submetering.111

2) DTE Gas Company Regulations. Submetering of gas service is prohibited.

3) Michigan Public Service Commission. Regulates electricity and natural gas

billing.

4) Michigan Compiled Laws § 125.2328: The Mobile Home Commission

Act. Authorizes submetering for mobile home parks for electricity, fuel, and water service.

108 Banyan Utility. 2024. Indiana. https://banyanutility.com/state-directory/indiana/.

109 Banyan Utility. 2024. Michigan. https://banyanutility.com/state-directory/michigan/.

110 Guardian Water & Power. 2024. Michigan Submetering—Must Read Before You Submeter in Michigan. https://www.guardianwp.com/single-

post/2019/01/19/Michigan-Submetering---Must-Read-Before-You-Submeter-in-Michigan.

111 Guardian Water & Power. 2024. Michigan Submetering—Must Read Before You Submeter in Michigan. https://www.guardianwp.com/single-

post/2019/01/19/Michigan-Submetering---Must-Read-Before-You-Submeter-in-Michigan.

69

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

5) Wisconsin Electric Power Company Rules and Regulations State of

Michigan. Where the resale of electric service exists, the company will be under no obligation to furnish or maintain meters or other facilities for the

resale of service by the reselling customer to the ultimate user. The use of

“master metering” will be limited to existing customers.

“There are several conditions for implementing a submetering system in

Minnesota. The property owner is required to provide specific information to the

tenants about the actual cost of the utility bills for the entire property. All the terms must be specified in the rental agreement as to who is responsible for making

payments of the utility charges. Charging fees are allowed but under very strict

rules and cannot be done to generate profits.

“In the state of Minnesota, a public utility and the Public Service Commission

cannot limit the availability of submetering to a building occupant when the

building is served by a public utility’s master meter that measures the total electric

Y (1,2), Y energy delivered to the building.”112

MN (5)—Utility, N 1) Minnesota Stat. § 216B.022. A public utility and the Public Service Y (1–3) Y (1–3) Y (6) (4)— Commission cannot limit electrical submetering. Municipality 2) Minnesota Stat. § 504B.215. Requirements for submetering billing.

3) Minnesota Statutes 325E.026. Unauthorized Use of Utility Meters and

Sub-meters.

4) City of Detroit Lakes Electric Service Rules and Regulations. No electric

submetering of electric service is allowed.

5) Northern States Power Company. The Company permits redistribution and

submetering where allowed by law, but a landlord may not charge the tenants

more than the landlord is charged by the Company.

6) Minnesota Electric Vehicles Pilots. Permitted submetering of level 2

chargers for the residential pilots.

“The state of Ohio allows utility billing of the rental dwellings by the landlords.

OH However, some cities within the state prohibit the use of the ratio utility billing Y (1) Y (1) Y (1)

systems (RUBS).

112 Banyan Utility. 2024. Minnesota. https://banyanutility.com/state-directory/minnesota.

70

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

“The rules state that a landlord could not turn the practice into a profit-generating business. The methods used for calculating the utility bills and the administration fees must be clearly defined in the rental agreement.”113

1) Ohio Public Utilities Commission (PUCO) has supervisory authority over all

public utilities and prescribes rules to protect consumers. Submetering

companies fall under PUCO jurisdiction if the company fails the Shroyer Test, initiated by customer complaints—this follows instances in Ohio where

residents were overcharged via submetering.

a. Ohio Public Utilities Commission Submetering FAQ:

https://www.puco.ohio.gov/be-informed/consumer-topics/submetering-

frequently-asked-questions/

b. PUCO Investigation of Submetering Docket.

“Billing for electricity using the ratio utility billing system (RUBS) is prohibited

since dwellings built after 1980 are required to have separate electrical meters

installed. This stipulation would put the responsibility on the owners to disclose to the future tenants if the utility charges are not included in the rental payments.

“Billing renters for natural gas, water, and sewer charges is allowed using

submeters or master meters (RUBS) if the owner does not charge the tenants

more than the utility companies charge the property.”114

WI N (1), Y 1) Wisconsin Administrative Code, PSC 113.0803. Individual electric meters

(2,3)—Utility Y Y (2,4) are required for non-transient multi-dwelling unit residential buildings, mobile

home parks, and commercial establishments—buildings constructed after

1980 shall have separate meters for each unit.

2) Wisconsin Public Service Commission. “Should the Utility Master Meter or

Individually Meter Multiple Unit Condominiums and Apartments? Can the

owner privately meter individual units?” The PSC notes that no rules or

regulations prohibit submetering.

3) Wisconsin Electric Power Company Rules and Regulations.

Requirements for submetering with permission, rates cannot exceed those

filed with the Company.

113 Banyan Utility. 2024. Ohio. https://banyanutility.com/state-directory/ohio.

114 Banyan Utility. 2024. Wisconsin. https://banyanutility.com/state-directory/wisconsin.

71

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

4) Public Service Commission of Wisconsin, Schedule X-1 Water Utility

Operation Rules. The owner of multi-unit buildings can provide dedicated meters to each unit and is required to provide interior plumbing and meter

settings to enable individual metered service to each unit and individual

disconnection without affecting service to other units. Each meter and meter

connection will be treated as a separate water utility account for the purpose

of the filed rules and regulations.

72

Region 6

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

“The Arkansas Public Service Commission does not regulate municipally owned utilities, public power agencies, or exempt wholesale generators.

“However, the rates and services of public utilities, including electricity, natural gas, and water, are regulated.”115

1) General Service Rules—5.20—B. General Requirements. States that new

construction residential properties cannot install master meters or combine bills of

AR individual customers, with some exceptions if master metering does not conflict with N (1) N (1) Y (2,3)

energy efficiency goals of the Arkansas Energy Code.

2) Policy on Regulatory Compliance for a Submetered Property Engineering Section

/Arkansas Department of Health. Describes rules regarding submetered water systems. Notes that RUBS is not considered submetering for the purposes of this policy.

3) Central Arkansas Water Company Regulations. Submetering of water for the

purpose of reselling by a customer is prohibited. Submetered water is under the

jurisdiction of the Arkansas Department of Health.

“The use of ratio utility billing systems (RUBS) and submetering is not prohibited when billing residents for electricity, natural gas, and trash. The practice is not allowed for billing of water and sewer unless the provider is a municipality.” 116

The Louisiana Public Service Commission has ruled that water submetering is prohibited.117

1) Louisiana Public Service Commission—General Order § 901, “Submetering” and

Resale of Utility Service; Prohibition. Appears to ban water submetering unless the

LA Y Y N (1, 2, 3, 4) customer is a municipality; prohibits RUBS.

2) Shreveport, Louisiana, Regulations. “(a) It shall be unlawful for any person to

construct, occupy, or allow to be occupied any structure in which the construction plan provides for a master meter and submetering of the water consumption of one or more owners or tenants unless the plan has been approved by the director. (b) It shall be unlawful for any person to connect to a house line for a separate property or multiple properties with the intent to re-sell water which has passed through their water meter without prior authorization from the department.”

115 Banyan Utility. 2024. Arkansas. https://banyanutility.com/state-directory/arkansas.

116 Banyan Utility. 2024. Louisiana. https://banyanutility.com/state-directory/louisiana.

117 Banyan Utility. 2024. Louisiana. https://banyanutility.com/state-directory/louisiana.

73

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

3) Ruston, Louisiana, Code of Ordinances Chapter 27-126 Residential Rate

Schedule. Service under residential rates shall not be resold, submetered, used for standby, or shared with others.

4) Louisiana Public Service Commission Guidelines and Requirements for Water

and Wastewater Utilities. No submetering is permitted unless the customer is a municipality or public utility.

5) City of New Orleans Article II § 30-64 e. Implies electric submetered service is an

option.

“The owners and property managers are allowed to use submetering and ratio utility billing systems (RUBS) to bill tenants for the utilities. The Public Regulation Commission does not regulate this practice.

“The only restriction is that the property managers have to provide the residents with a copy of the master utility bills if requested. The owners are responsible for the utility costs for the common areas and vacant units. The monthly service fees could not exceed $5.00 per billing cycle. These rules apply to water, sewer, natural gas, trash, and electricity billing.”118

1) New Mexico Statutes—Chapter 47—Property Law, 47-8-20 Obligations of Owner—

Part F. Residents in direct and submetered units are entitled to receive copies of utility

NM Y (1), N—Rio bills upon request. When common area charges are apportioned between units, Y (1) Y (1) (4) residents are to be provided calculations upon request. Owners cannot charge Rancho (3) administrative fees of more than $5 for each month.

2) New Mexico Office of the State Engineer—A Water Conservation Guide for Public

Utilities. Discusses benefits of water submetering.

3) Rio Rancho Water and Wastewater Rules and Rates—Chapter 51.03. Water service

submetering is not allowed.

4) New Mexico Administrative Code, Title 17: Public Utilities and Utility Services (17

NMAC). General rules on utilities.

5) City of Santa Fe 25-1: Implied submetering. Submeter means a device owned by the

property owner and installed for the purpose of measuring the consumption of water for individual dwelling units as set forth in Rule 18 of Exhibit A, Chapter XXV SFCC 1987.

Y (3) N “The use of master-metered (RUBS) and submetered systems for billing the residents of a

OK Y (1) Y (2) (4,5,6)— multifamily residential complex is permitted in the state of Oklahoma.

Municipalities

118 Banyan Utility. 2024. New Mexico. https://banyanutility.com/state-directory/newmexico.

74

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

“The billing entity could make no more than 10% profits from the utility charges collected from the renters. The reseller’s ‘per unit’ utility costs have to be disclosed in each invoice.

“In the state of Oklahoma, residences, apartment complexes, or similar residential units and multicommercial unit complexes may be or may continue to be served with a single utility meter and consumer submeter system, if such measuring of electrical service is deemed to encourage conservation of energy; contribute to the efficient use of facilities and resources of electric utilities; and result in equitable rates to the electrical consumers affected by such meters.”119

1) Oklahoma Administrative Code § 165:35-13-7. Authorizes apartment complexes and

multi-commercial to submeter electricity provided they promote energy conservation and result in equitable rates.

2) Oklahoma Administrative Code § 165:45-7-11. Gas Measurement Requirements—(g)

Service to newly-constructed multiple residences, apartment complexes, or similar residential units shall be individually metered, one meter per residence, and billed under the applicable rate schedule. (j) Except as provided in this subsection, no consumer shall separately meter or submeter and separately bill another consumer for gas. A landlord or innkeeper may include the cost of gas in rent. A landlord may utilize any formula in computing the energy component of rent, provided that component is not separately metered and billed as “gas.” (k) Service to previously constructed multiple residences, apartment complexes, or similar residential units may continue to be provided with a single meter or multiple meters. At the option of the utility, individual consumers may be served with individual meters at the applicable rate schedule.

3) TITLE 165. CORPORATION COMMISSION CHAPTER 65. WATER SERVICE

UTILITIES PERMANENT RULES, 165:65-9-1. References rules relating to recordkeeping for submetering water.

4) Rogers County Rural Water District Rule #6. Standard water service connection is for

the sole use of the applicant or the consumer and does not permit the extension of pipes to transfer water from one property to another, resell, or submeter water to any other consumer.

5) Pittsburg County Rural Water, Sewer, Gas and Solid Waste Management. Service is

for Sole Use of the Consumer: A standard water and waste disposal service connection is for the sole use of the applicant or the consumer and does not permit the extension of pipes to transfer water from one property to another, nor to share, resell, or submeter

119 Banyan Utility. 2024. Oklahoma. https://banyanutility.com/state-directory/oklahoma.

75

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

water to any other consumer or allow another user to connect to the applicant’s sewer line.

6) Washington County Rural Water District. Sole Use: A standard water service

connection is for the sole use of the applicant or the consumer and does not permit the extension of pipes to transfer water from one property to another, nor to share, resell, or submeter water to any other consumer.

“Texas has one of the most detailed sets of rules and regulations concerning tenant billing services by the owners.

“The owners of residential dwellings may use metering or ratio utility billing systems (RUBS) for tenant billing. Additional charges and fees are not allowed under this system except for a limited amount for late fees and reconnect fees. The maximum fee amounts have a cap. The rental contract must clearly outline the charges and methods used for calculating utility bills. It is the responsibility of the management team to maintain records of the master utility bills. These records have to be available for inspection by tenants upon request.

“The Texas Water Code requires each unit in a building with five or more residential units built after Jan. 1, 2003, to have either an individual water utility meter or a submeter. If feasible, it requires water companies to install individual meters in such buildings at the building owner’s request.

TX Y (1,2,6,7) Y (3) Y (4,5,7) (8)

“The water company can charge reasonable costs for installing the meters. If the water company determines that installing these meters is not feasible, the law requires the property owner to install a plumbing system compatible with submeters.

“The code also requires property owners to maintain adequate records and make them available to tenants and submeters to meet certain standards for accuracy, testing, and record keeping.”120

1) Texas Utilities Code Ann. § 184.012. A political subdivision may not authorize the

construction or occupancy of a new apartment house, including the conversion of property to a condominium, without direct metering or submetering for electricity.

2) Title 16, Texas Administrative Code, Chapter 25, Subchapter 6—Submetering.

General rules on electrical submetering.

a. Substantive Rules Applicable to Electric Service.

120 Banyan Utility. 2024. Texas. https://banyanutility.com/state-directory/texas.

76

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

b. Public Utility Commission of Texas, Utili-Facts—Submetered Utility Service

for Property Owners Guide.

c. Public Utility Commission of Texas, Utili-Facts: Submetering for

Apartments, Condos and Mobile Home Parks.

3) Texas Utilities Code 124.02—Submetering. Authorization for natural gas submetering

for apartments and mobile home parks.

4) Texas Water Code § 13.501 through 13.506. Requires each unit in a building with five

or more residential units built after Jan. 1, 2003, to have either an individual water utility meter or submeter. Lays out guidelines for billing.

5) Title 16, Texas Administrative Code, Chapter 24 Subchapter I. General rules on

water submetering.

a. Public Utility Commission of Texas Water Submetering FAQ Site.

6) El Paso Electric Company second Revised Rule No. 19. Describes requirements for

billing submetered residents for electricity.

7) City of Austin Chapter 15-9 Utility Service Regulations. Regulations for submetering

of electricity and water.

8) Landlords and Tenants Guide. Submetering guidance for landlords and tenants.

77

Region 7

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

“Billing tenants for utilities is not regulated by the Iowa Utilities Board. The use of submetering and ratio utility billing system (RUBS) is allowed. The only restriction is that the landlords and property managers have to disclose the details of utility rates and charges before signing a rental agreement.”121

1) Iowa Code Chapter 20 Service Provided by Electric Utilities 199—20.3(476) General

service requirements. Energy saving thresholds for master metering eligibility.

IA Y (1) Y (2) N (3) 2) Iowa Code Chapter 19 Service Supplied by Gas Utilities 199—19.3(476) General service

requirements. Allowance for master metering where individual metering is impractical; cost of individual metering exceeds long-term benefits; benefits of individual metering are more effectively accomplished by master metering.

3) Iowa Code Chapter 21 Service Provided by Water Utilities 199—21.3(476) General water

service requirements. 21.3(1). Separate metering for premises. Separate premises shall be separately metered and billed. Submetering shall not be permitted.

“The utility regulating agency, the Kansas Corporation Commission, is only in charge of electricity and natural gas and not the water or sewer. The rental agreement needs to include who is responsible for payment of the utility charges.”122

1) Kansas 2019 Statutes Article 27 12-2723. No city or public water supply system shall

KS Y (1,2)

prohibit the installation of a separate water meter for each dwelling unit within a building containing multiple dwelling units in lieu of installation of a master meter for the entire building.

2) Kansas Statues Chapter 58, Article 25. Landlords and tenants—Provisions for landlords to

submeter water.

“In Missouri, only investor-owned utilities are regulated by the Missouri Public Service Commission.

MO Y Y Y

“The use of submetering and ratio utility billing system (RUBS) is allowed for electricity and water billing. In the state of Missouri, reselling natural gas is prohibited, but charging for the exact

121 Banyan Utility. 2024. Iowa. https://banyanutility.com/state-directory/iowa.

122 Banyan Utility. 2024. Kansas. https://banyanutility.com/state-directory/kansas.

78

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

amount of gas used by each resident is allowed as long as the property owner is not making any profits from the billing practice.”123

1) Division 4240 PSC Chapter 20 Electric Utilities 20 CSR 4240-20.050.124 Each residential

and commercial unit in a multiple-occupancy building, construction of which has begun after June 1, 1981, shall have installed a separate electric meter for each residential or commercial unit.

2) City Utilities Service Rules and Regulations.125 City Utilities has adopted the Public Utility

Regulatory Policy Act (PURPA) of 1978 standards (latest revision) regarding Master Metering of a Multiple Tenancy Premise. Master Metering of electric and gas Service shall be prohibited or restricted to the extent as defined in these Service Rules and Regulations and as required by the Missouri Public Service Commission (PSC) Code of State Regulations 240-40.

3) 126 Division 4240 Public Service Commission Chapter 40 20 CSR 4240-40.020. Master

meter system means a pipeline system for distributing gas within, but not limited to, a definable area, such as a mobile home park, housing project, or apartment complex, where the operator purchases metered gas from an outside source for resale through a gas distribution pipeline system. The gas distribution pipeline system supplies the ultimate consumer, who either purchases the gas directly through a meter or by other means, for instance, by rents.

“Utility billing is not regulated by the Nebraska Public Service Commission.

“It is permissible to use ratio utility billing system (RUBS) or submetering to generate utility bills for multitenant dwellings. It is recommended to include the terms of occupancy in the rental contract. This should specify obligations of either party as it pertains to payment of utility bills.”127

NE N (1,2) N (3)

1) Nebraska Power Review Board Regulations Title 12 Guidance Note. The Board’s

interpretation of Nebraska law is that a violation occurs when a nonutility entity sells electricity to third parties, and the compensation paid by the third party is based on the actual amount of electricity used by the third-party customer as measured by an electric meter or other similar device. Whether the entity is making a profit from the sale of electricity is not relevant. A.

123 Banyan Utility. 2024. Missouri. https://banyanutility.com/state-directory/missouri.

124 Division 4240 Public Service Commission Chapter 40 20 CSR 4240-40.020. https://www.sos.mo.gov/CMSImages/AdRules/csr/current/20csr/20c4240-40.pdf.

125 City Utilities Service Rules and Regulations. https://www.cityutilities.net/wp-content/uploads/legal-servicerules.pdf.

126 Division 4240 Public Service Commission Chapter 40 20 CSR 4240-40.020. https://www.sos.mo.gov/CMSImages/AdRules/csr/current/20csr/20c4240-40.pdf.

127 Banyan Utility. 2024. Nebraska. https://banyanutility.com/state-directory/nebraska.

79

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

Example: If a landlord meters or otherwise measures the consumption of electricity on the pertinent property and charges tenants an additional amount based on the actual usage, the landlord is selling electricity to third parties and is operating as an electric power supplier. This would include rental properties such as apartment complexes, duplexes, and mobile home parks.128

2) Lincoln Energy Services Regulations. Electric service purchased by a Customer is for the

sole use of the Customer in and upon the premises to which such service is supplied. Customers are prohibited from reselling energy as well as rendering a bill on a metered basis to lessees, tenants, and others. Existing submetered facilities can remain as is if the end user does not pay more for electric consumption than the applicable LES rate. Violations may result in legal recourse.129

3) 130 Omaha Utility District Regulations. New submeters are prohibited. Single-Family

Residential. Each individual single-family residence shall have its own meter. Submetered service from another metered line is prohibited. Water lines shall not be extended to another residence or place of business.

128 Nebraska Power Review Board Regulations Title 12.

https://powerreview.nebraska.gov/sites/powerreview.nebraska.gov/files/doc/Guidance%20Documents%20Policy%2012%20-%20%285-31-19%29_1.pdf.

129 Lincoln Energy Services Regulations. http://www.les.com/pdf/rates/service-regulations.pdf.

130 MUD Omaha, Water Regulations. https://www.mudomaha.com/sites/default/files/Water%20Rules%202016.pdf.

80

Region 8

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

“The properties that are served by a private water company are not regulated. The practices of the properties served by municipal providers are subject to specific rules and restrictions.

“The Colorado Public Utilities Commission does not regulate billing systems of the property managers, mobile home parks, or condominiums as long as the total amount collected from the residents is not greater than the total utility bill for the whole complex.

“When it comes to submetering programs, the state of Colorado has one of the highest penetration rates in the western region. This is in large part due to most water districts in the state raising water rates and implementing tiered rate structures. As a result, more and more property owners are opting to implement submetering and RUBS programs.”131

1) Code of Colorado Regulations, Rules Regulating Electric Utilities 4 CCR 723-3,

3803. Exemption Requirements. “Check-Meters” defined as a meter or other device

CO Y (2) Y—Municipalities if it is used solely to reimburse the master meter owner by means of an appropriate Y (1,3,6,9) used to measure electric consumption by an end user. Tenants can be check-metered

N (8) (4,5,7,10) allocation procedure, and the master meter owner cannot receive more funds than the

actual amount billed.

2) Code of Colorado Regulations, Rules Regulating Gas Utilities and Pipeline

Operators 4 CCR 723-4, 4803. Exemption Requirements. “Check-Meters” defined as a meter or other device used to measure gas consumption by an end user. Tenants can be check-metered if it is used solely to reimburse the master meter owner by means of an appropriate allocation procedure, and the master meter owner cannot receive more funds than the actual amount billed.

3) Code of Colorado Regulations, 723-3-14(d). Submetering, described as the resale

of electricity by a master-metered customer, is prohibited. Check-metering is permitted provided tenants are not charged more than the cost of the service.

4) 2019 Denver Amendments to the 2018 Edition of the ICC Plumbing Code, 401.3.2

Metering. Individual units shall be metered for water for usage to be recorded and billed. Applies to new construction. Exemption for central domestic central water

heating system.

131 Banyan Utility. 2024. Colorado. https://banyanutility.com/state-directory/colorado.

81

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

5) Westminster, Colorado, Municipal Code, 8-7-4.—Specifications. New

developments must be submetered for water other than single-family detached or attached homes.

6) Colorado Springs Utilities Rules and Regulations. Submetering, for the purpose of

resale of a service, by a Master Metered Customer of Utilities is prohibited. However, a Master Metered Customer may install their own check-meter.

7) Colorado Springs Utilities Water Service Regulations. Requirements and

regulations for water submetering.

8) City of Trinidad, Colorado, Municipal Code Gas Tariff. Natural gas submetering is

not permitted.

9) City of Loveland Power Regulations. Submetering is allowed, but customers will

provide all equipment.

10) City of Aurora, Colorado, Water Efficiency Plan. Special rebates and incentives for

water submetering.

“The owners and property managers of the multiple occupancy buildings are allowed to use ratio utility billing system (RUBS) or submetering to generate utility bills for electricity and natural gas. The only exception is that the subscribers of Northwestern Energy are not allowed to use ratio utility billing system for the buildings that were built after 1981.

“Water and trash billing is not regulated provided the fees and charges are reasonable.”132

1) Public Service Regulation, Chapter 38.5, Utility Division, 38.5.1602 Prohibition of

MT Master Meters. New buildings must have electric usage delivered to individual meters Y (1,2) Y (2) Y (2)

except for hotels, motels, hospitals, dormitories, and other transient lodging, or where the cost exceeds the long-run benefits.

2) Public Service Commission Montana, Fact Sheet: Landlord Submetering. The

PSC does not consider a landlord a regulated utility in the event of submetering water, electricity, or gas, provided the landlord does not receive a profit from submetering, or that utilities are included in rent. It states that “there are no statutes or rules on this policy (except the landlord does meet the definition of public utility).”

“Submetering and master-metering (RUBS) rental residential dwellings are permitted in

ND the state of North Dakota when billing tenants for utilities. The rental unit owners and Y (1,2) Y (2)

managers are not subject to the Public Service Commission regulations.

132 Banyan Utility. 2024. Montana. https://banyanutility.com/state-directory/montana.å

82

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

“According to the North Dakota Administrative Code, electric service furnished by a public utility under established rate schedules shall not be resold or submetered by a customer unless the rate schedule under which the customer receives service specifically so provides.”133

1) North Dakota Administrative Code § 69-09-02-15, Standards of Service—

Electric. Electric service furnished by a public utility under established rate schedules shall not be resold or submetered by a customer unless the rate schedule under

which the customer receives service specifically so provides.

2) North Dakota Administrative Code § 69-09-01-11, Standards of Service—Gas.

References submeters and approved charges approved by the PSC.

“Ratio utility billing system (RUBS) and submetering are not regulated by the Public Service Commission in South Dakota. Therefore, the landlords and the property

managers are allowed to provide their tenants with utility billing services.

“It is recommended that the terms of the rental agreement specify who is responsible for the utility charges.”134

1) South Dakota Administrative Rule 20:10:26:03 Individual Meter—When

Required. Individual gas or electric metering is required for new multiple-occupancy buildings and new mobile home parks and trailer courts, and in substantially

remodeled or renovated buildings.

2) South Dakota Administrative Rule 20:10:26:04 Individual Meter—When Not

SD

Required. Provides some conditions where individual meters are not required.

3) South Dakota Codified Laws Chapter 49-34B. Definition of master meter systems

for natural gas.

4) Northwestern Utilities South Dakota Gas and Electric Rate Schedules. All

buildings, mobile home parks, and trailer courts for which construction was begun after June 13, 1980, shall be metered separately for each residential or commercial unit, with the exception of hospitals; nursing homes; transient hotels and motels; dormitories; campgrounds; other residential facilities. Exceptions can be granted by the Commission.

5) City of Sioux Falls Municipal Code Chapter 10. Procedure for securing master

meter exemptions for water service.

133 Banyan Utility. 2024. North Dakota. https://banyanutility.com/state-directory/northdakota.

134 Banyan Utility. 2024. South Dakota. https://banyanutility.com/state-directory/southdakota.

83

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

6) City of Belle Fourche South Dakota Municipal Code Chapter 13.08. Water service

for multi-unit buildings and campgrounds is required to be master metered

“In Utah the regulations are lacking when it comes to owners of residential rental units billing their tenants for utilities. It may be necessary to obtain a business license from the Division of Public Utilities and be subjected to inspections. The rental contract should clearly define the responsibilities of the parties paying for the utilities.”135

1) Utah Administrative Code R746-210-1 Public Utility Regulatory Policy Act

Standards for Master-Metered Multiple Tenancy Dwellings. Adopts the standards

UT Y (1) Y (1) Y (1) of PURPA where possible. R746-210-2 lays out exceptions.

2) Utah Administrative Code R746-210-5. Submetering as an Alternative to

Individual Metering. States that submetering is not an acceptable alternative to direct metering because submetered customers are not a regulated utility.

3) Rocky Mountain Power Electric Service Regulation No. 7 State of Utah. Individual

metering required with some exceptions in multifamily buildings. With the exception of grandfathered accounts, submetering is not allowed.

There is limited guidance on utility submetering in Wyoming. References below are not applied to the chart categories as a result.

1) Wyoming Statutes, Title 37. Public Utilities.

2) Wyoming Community Development Authority, Affordable Rental Housing

Compliance Manual, January 1, 2018. Notes that the Wyoming Affordable Housing Plan does not allow submetering.

WY 3) Wyoming Public Service Commission Rules § 246 via Powder River Energy

Regulations. The practice of reselling a utility commodity by a person to his tenant is not permitted within the certificated area of any utility company when such practice is specifically prohibited by a tariff; no gas or electric utility shall provide master metered service to mobile home parks.

4) Dominion Energy Natural Gas Tariff. No submetering of natural gas to mobile home

parks.

135 Banyan Utility. 2024. Utah. https://banyanutility.com/state-directory/utah.

84

Region 9

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

State regulations permit the submetering of electricity, natural gas, and water in multifamily buildings. A landlord who operates only in a cost recovery mode and does not charge more for services than what the utility provider charges them is not considered to be public utility by the Arizona Corporation Commission.

“Arizona requires all large providers located in an Active Management Area—areas with a heavy reliance on mined groundwater—to meter all water deliveries to municipal service connections on its systems. The only exceptions are connections to construction users, dwelling units in individual multifamily units, mobile homes using master meters, and fire service connections. Providers not located within an Active Management Area are not required by the state to meter water delivery.” 136

1) Arizona Revised Statutes Annotated § 33-1314.01. A landlord may charge separately for gas,

water, wastewater, solid waste removal, or electricity by installing a submetering system or by allocating the charges separately through a ratio utility billing system. Landlords may recover the charges by the utility provider plus an administrative fee for actual administrative costs only. No

Y Y Y separately and state the administrative fees with submetering. additional charges can be imposed. Rental agreements must indicate which utilities are charged

AZ (5–8)

(1,2) (1,2) (1–4) 2) Arizona Revised Statutes Annotated § 33-2107. Outlines permissible fees charged for

administrative costs.

3) Arizona Water Metering Overview. Frequently Asked Questions concerning submetering.

4) Sierra Vista, Arizona, Code § 151.16 (2013). Requires all new multifamily developments with

more than four units to provide submetering, with some exceptions for low-income housing units, alternate water savings approaches, and ratio utility billing systems.

5) Arizona Administrative Code, Corporation Commission—Fixed Utilities, Title 14, Chapter

2, Article 2, R14-2-205. Master Metering, Disallows electrical master metering in mobile home parks and apartment buildings unless under certain circumstances.

6) Arizona Administrative Code, Corporation Commission—Fixed Utilities, Title 14, Chapter

2, Article 3, R14-2-305. Master Metering, Disallows natural gas master metering in mobile home parks.

7) Arizona Administrative Code, Title 14, Chapter 2, Article 4, § R14-2-408. The Arizona

Corporation Commission’s Rules on Water requires all water delivered by a regulated water utility to be billed on the basis of metered volume sales.

136 Banyan Utility. 2024. Arizona. https://banyanutility.com/state-directory/arizona.

85

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

8) Arizona Corporation Commission—Commission Rules on Wastewater. Overall wastewater

rules for Arizona.

State regulations permit the submetering of electricity, natural gas, and water in multifamily buildings. California submetering regulations specify the types of meters to be installed, licensing of installers, and allowable fees.

As of January 1, 2018, California State Senate Bill 7 (SB 7) required water submetering in all new-construction multifamily dwellings. The goal of SB 7 is to hold tenants accountable for water usage and encourage conservation while providing consumer protection. Further water rulemaking is possible as long as any new rules are at least as stringent as what is in the new code section. (See Article 5. § 537.3 (c) of SB7 regarding Multiunit Structures.)

1) California SB 7 Law. Requires new multifamily construction after 1/1/19 to be submetered.

Lays out guidelines on technical standards and utility billing standards.

2) California Civil Code § 798.40. Requirements for utility submetering systems regarding billing

periods, posting of rates, and relevant contact information.

3) California Public Utilities Code § 739.5. Requires the master-meter customer to charge

submetered users the same rate as that from the utility. Requires the corporation furnishing

CA Y Y Y service to the master-meter customer to establish uniform rates that will provide a sufficient (8–19) (1–5) (1–5) (6,7) differential to cover the reasonable average costs to master-meter customers of providing

submeter service. These costs shall not exceed the average cost that the corporation would have incurred in providing comparable services directly to the users of the service.

4) California Business and Professions Code § 12240. Requirements for submetering fees for

marinas, mobile home parks, recreational vehicle parks, and apartment complexes.

5) California Public Utilities Code 12821.5. Master-meter customer is responsible for

maintenance of submetering system and must provide itemized bills to customers.

6) California Water Code, § 525 through § 527. California has generally required utility water

meters for all new water service connections installed since 1992. Over time, this requirement has extended to all existing water service connections; some urban water suppliers have until Jan. 1, 2025, to comply. Charges for any customer with a metered connection must be based on the actual volume of water delivered, as measured by the water meter. Allows the water companies to recover their related costs through rates, fees, or charges.

7) California Public Utilities Code 2705.5. Administrators of a water submetering system are not

subject to public utility regulations provided that water is charged at the same rate as provided by the utility.

86

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

8) San Diego Water Submetering Ordinance. Requires water submeters in new multifamily

buildings when replacing interior piping. Provides certain exemptions and lays out requirements on fees.

9) San Francisco Water Submetering Frequently Asked Questions.

10) City of Santa Barbara Water Ordinance Report. Regulations for private submetering.

11) MeterNet—Guide to Water Sub-meters in California. Overview of rebates and requirements

for various water districts. Various Small Cities & Water Districts require prior approval to install submeters.

12) California Division of Measurement Standards Title 4 Division 9 Field Reference Manual.

Submeter specifications and testing procedures.

13) PG&E Gas Rule 18: Supply to Separate Premises and Submetering of Electric Energy.

14) California Water Code—Division 1—Chapter 8—ARTICLE 5. Multiunit Structures—§ 537.

Owners of multi-unit buildings shall install water meters.

15) Corona Municipal Code, Title 13. Requirements for separate water service.

16) San Diego Gas & Electric Company Tariff, Rule 24, § (B)(1)(d). Gas submetering for select

customers.

17) Richmond Fair Rent Ordinance. Individual metering for water.

18) Regulations for Chapter 17.23 Including Apartment Rent Ordinance. San Jose City Council

voted to require utility charges to be included in the rent charged for rent-stabilized apartments under a ratio utility billing system.

19) San Diego Municipal Code, Chapter 14. Water submeters required for new construction.

State regulations permit the submetering of electricity, natural gas, and water in multifamily buildings. Submetering is allowed provided the owners do not profit from billing the tenants for utilities.

HI Y Y Y 1) Administrative Rules Chapter 6-60-5. Defines master metering as service to multifamily

(1) (1) (1) submetered. Requires individual metering of utilities in newly constructed apartments. (2,3) accommodations through one meter on a single premise where individual tenants are not

2) Honolulu Water Submetering. Guidelines for residential and irrigation water submetering.

3) Hawai’i Energy Submetering Incentive Program. Hawai’i Energy submetering eligibility

requirements.

NV Y State regulations concerning the submetering of electricity, natural gas, and water in multifamily Y Y (2–6) buildings could not be located. Landlord-tenant laws imply submetering as a possibility. (1) (1) (1)

87

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

Based on discussions with PUC staff, in the absence of specific state laws specifically discussing submetering, Nevada tacitly allows the submetering of electricity, natural gas, and water. The rental contract should specify who is responsible for the payment of utility bills.

1) Nevada Revised Statutes, Title 10, Chapter 118A—Landlord and Tenant Dwellings. Leasing

language must specify who is responsible for utilities and implies submetering is permissible.

2) Nevada Revised Statutes 704. Regulation of Public Utilities Generally.

3) Nevada Revised Statutes 704.940 (1) & (4). Mobile Home Parks—Landlords prohibited from

charging tenants more for utilities than what Is billed by the utility.

4) Nevada Revised Statutes 704.940(3), (4), (5). Mobile Home Parks—Landlords prohibited from

billing tenants for common area costs for water.

5) NAC 704.980 to 704.991. Mobile Home Parks—Guidelines on establishing service charges for

submetered tenants.

6) PUCN Mobile Home Park Guide. Mobile Home Parks—Guidelines where mobile home parks

are equipped with submeters or RUBS approach.

88

Region 10

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

“Landlords are not prohibited from billing tenants for electricity, gas, and trash through the use of the ratio utility billing system (RUBs) or submetering.

“A provisional or traditional certificate from the Regulatory Commission of Alaska (RCA) is required for apartment owners providing water or wastewater service to the tenants.

“The lease must specify the rights and obligations of the landlord and tenants.” 137

1) Alaska Statute (AS) 42.05.221 and RCA Regulations. RCA Provisional Certification is

AK Y (1) required for submetering water and sewage.

2) AAC Chapter 52: Operation of Public Utilities. General regulations of electricity and natural

gas metering, but no specific guidelines on submetering.

3) 3 AAC 50.200. Individual electric meters. States that electric utilities shall install an individual

meter to measure the energy consumption attributable to each residential and commercial unit in a multiple-occupancy building and each mobile home unit in a mobile home park if construction of the building or mobile home park was begun after December 31, 1982, with some exceptions.

“Privately owned utilities are regulated by the Idaho Public Utilities Commission. Those regulations do not apply to submetering or ratio utility billing system (RUBS). In general terms, ratio utility billing system is not allowed for electricity billing. The lease contact should clearly specify who has the responsibility of paying for utilities. If a master metering system (RUBS) is used in the multifamily

ID N (1) complex, the owner must inform the new tenants about the shared meters before the lease or rental

agreement is signed.”138

1) IDAPA 31.26.01 Master metering Rules for Electric Utilities.139 Master metering is prohibited

after 1980 except for mobile home parks.

“A landlord in Oregon could charge the tenants for utilities no more than what the utility providers are

OR Y (1,2,3) Y (1,2,3,4) charging the property. All the fees and the methods used for calculating the bills have to be

disclosed to the residents. The use of submetering and ratio billing systems (RUBS) is permitted in

137 Banyan Utility. 2024. Alaska. https://banyanutility.com/state-directory/alaska.

138 Banyan Utility. 2024. Idaho. https://banyanutility.com/state-directory/idaho.

139 IDAPA 31.26.01 Master Metering Rules for Electric Utilities. https://adminrules.idaho.gov/rules/current/31/312601.pdf.

89

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

Oregon. The renters have a right to request and inspect the master utility bills. Charging administration fees are not allowed.”140

1) 2017 ORS 90.532 Billing methods for utility or service charges.141 Billing methods including

submetering relationships and ratio utility billing between tenants and landlords. Pro-rata billing not allowed for water and sewage services.

2) 2017 ORS 90.536 Charges for utilities or services measured by submeter.142 Service

charges for submetering of electricity, water, and sewage.

3) 2017 ORS 90.534 Allocated charges for utility or service provided directly to space or

common area.143 Allocation of charges for provision of service to shared spaces and common areas.

4) ORS 90.531 to 90.539. City of Portland—allows for multifamily tenant water submetering.

“The implementation of RUBS or submetering is allowed as long as the amount of the utility bills is not higher than the actual amount charged by the utility provider company.

“Enacted in 2003, Washington’s Municipal Water Law requires all municipal water suppliers (public

Y Y service connections by January 2017.” and private water utilities serving at least 15 residential connections) to have meters on all of their 144

WA Y (3,6) Determined Municipal Municipal

Determined 145 1) Seattle Municipal Code SMC 21.49.100.G Prohibition of Submetering. Prohibition of

(1,3,6) (2,6) electric submetering for Seattle Power and Light Customers.

2) Seattle Municipal Code, Title 7, Chapter 7.25, SMC 7.25.040(A).146 Water billing and meter

reading for submetering in Seattle, Seattle FAQ.

3) Gas and electric submetering is regulated by the Washington Public Utility and

Transportation Commission. 147 Several local jurisdictions have also enacted regulations.

140 Banyan Utility. 2024. Oregon. https://banyanutility.com/state-directory/oregon.

141 2017 ORS 90.532 Billing methods for utility or service charges. https://www.oregonlaws.org/ors/90.532.

142 2017 ORS 90.536 Charges for utilities or services measured by submeter. https://www.oregonlaws.org/ors/90.536.

143 2017 ORS 90.534 Allocated charges for utility or service provided directly to space or common area. https://www.oregonlaws.org/ors/90.534.

144 Banyan Utility. 2024. Washington. https://banyanutility.com/state-directory/washington. 145 Seattle Municipal Code SMC 21.49.100.G Prohibition of Submetering.

https://library.municode.com/wa/seattle/codes/municipal_code?nodeId=TIT21UT_SUBTITLE_IVLIPO_CH21.49SELIDE_21.49.100APCOPR. 146Seattle Municipal Code (Title 7, Chapter 7.25, SMC 7.25.040(A).

https://library.municode.com/wa/seattle/codes/municipal_code?nodeId=TIT7COPR_CH7.25THPABIRE. 147 Guardian Water & Power. 2023. Submetering in Washington State—Important Things to Consider Before Implementing a Submetering System.

https://www.guardianwp.com/single-post/2019/02/24/submetering-in-washington-state-important-things-to-consider.

90

State Description/Sources Water Electricity Utility Eligible for Submetering

Natural Gas Other

Wastewater

Electric and natural gas submetering in Washington appears to be permitted as long as electricity is billed at the actual cost to the property and no fees are included in resident bills.

4) Washington Energy Code requires newly built apartment communities with central hot water to

meter domestic hot water.

5) Washington’s Municipal Water Law. Requires all municipal water suppliers (public and private

water utilities serving at least 15 residential connections) to have meters on all their service connections by January 2017.

6) City of Auburn—Local Submetering Ordinance.

91

References

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as Mixed-Income Community.” Building Design+Construction.

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EKM Metering. n.d. “Split-Core CT, 400A, 400A:26.6mA, 25mm (0.98″) Hole Diameter, ESCT-

025-400UL.” EKM Metering. https://www.ekmmetering.com/products/split-core-400a-25mm-ct.

Fontanazza, C., Notaro, V., Puleo, V. & Freni, G. (2014). The apparent losses due to metering

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Pay for Utilities,” Resource and Energy Economics 26: 51–75.

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U.S. Department of Housing and Urban Development

Office of Policy Development and Research

Washington, DC 20410-6000

January 2025

Table of Contents

Executive Summary ..................................................................................

Introduction .......................................................................................

Master Metering and Direct Metering ................................................................

Submetering ........................................................................................

Benefits of and Barriers to Submetering ............................................................

Benefits ...........................................................................................

Barriers ...........................................................................................

Submetering Regulations ............................................................................

50-State Review of Submetering Regulations .........................................................

Notable Findings Regarding Submetering .............................................................

HUD Guidance and Regulations .......................................................................

24 CFR 965 .........................................................................................

Capital Fund Guidebook (Regarding Master Metering) .................................................

Electric Riser Topologies ..........................................................................

Water and Wastewater Submeters .....................................................................

Natural Gas Submeters ..............................................................................

Steam Submeters ....................................................................................

Billing Systems ....................................................................................

Best Practices .....................................................................................

Cost Effectiveness .................................................................................

Tenant Outreach ....................................................................................

Case Studies .......................................................................................

RiseBoro Community Partnership .....................................................................

The Related Companies/Chicago Housing Authority ....................................................

Conclusions and Recommendations ....................................................................

Appendix A: Additional Reading .....................................................................

Federal Guidance ...................................................................................

U.S. Department of Housing and Urban Development Guidance ..........................................

State and Local Resources ..........................................................................

Savings Potential ..................................................................................

Appendix B: 50-State Submetering Regulation Review .................................................

Region 2 ...........................................................................................

Region 3 ...........................................................................................

Region 4 ...........................................................................................

Region 5 ...........................................................................................

Region 6 ...........................................................................................

Region 7 ...........................................................................................

Region 8 ...........................................................................................

Region 9 ...........................................................................................

Region 10 ..........................................................................................

References .........................................................................................

Exhibit 4: States That Permit Submetering by Type of Utility and HUD Field Office Region .... 11

Exhibit 7: Shared Riser ............................................................................

Exhibit 9: Dedicated Riser .........................................................................

Exhibit 14: Oscillating-Piston Meter ...............................................................

Exhibit 17: Typical Multijet Meter Accuracy Curve ..................................................