The Electric Equalizer

The first time many residents of Tower East, a luxury Upper East Side co-op, realized how a submetering project would change what they paid for electricity was when they got their first bills. The work occurred so seamlessly – taking a mere 10 days to install meters in 132 units – that many residents never knew what had happened.

The co-op took on the project in 2011 as a step toward improving its energy efficiency. It had always used a master-meter to track electricity usage in the building and divided the electric charges among residents based on their shares. The problem with relying only on a master-meter is that, because they never see an electric bill, residents tend to waste electricity. By installing a meter in each unit, residents know what they use and, consequently, have to pay more if they forget to turn their lights off.

“People with master-meter buildings have never faced an electric bill in their lives,” says Dean Zias, a project manager at the New York State Energy Research and Development Authority (NYSERDA) who oversaw the Tower East project. “They think it’s a God-given right, and therefore they will use as much as they want.”

Although submetering tends to reduce a building’s energy usage by 20 percent, convincing a board and shareholders to take on such a project is no easy feat. Often, residents balk at the idea of paying for their own usage because it could mean their bill will go up – and for about 20 percent of them, it usually does. (Another 20 percent usually see an immediate savings, says Zias; for the rest, the bill remains about the same.)

The second obstacle occurs when you have to convince shareholders and board members that installing a meter in their apartment won’t damage their walls or add an unsightly piece of equipment to their living space.

But Tower East managed to finesse the process with deft skill, convincing shareholders to accept the project and completing it relatively swiftly. “It was seamless. No one knew anything had happened,” says Richard Miller, the board president. “There was nothing you had to do; it just happened.”

Beginnings

The 35-story building first considered the project in 2007, when the co-op conducted a feasibility study, which estimated that annual savings would be close to $40,000 a year and payback would take less than two years. Despite the projected savings, however, the board rejected the idea.

A few years later, in 2011, things changed. Believing that the current system was unfair to the shareholders who tried to conserve energy, new leaders on the board were eager to pursue submetering again. Indeed: it rankled that a resident who left his lights on all day paid no more for electricity than one using energy-efficient bulbs and appliances.

Still, some members were reluctant to take on a project that would cost nearly $90,000 up front and require accessing every unit. Individual apartments accounted for only 40 percent of the building’s overall electricity bill, so even after the project, the building would still be responsible for the remaining 60 percent.

In 2007, the building spent $390,000 a year on electricity, according to Hebert E. Hirschfeld, an engineer who conducted a feasibility study for the property at that time. Building management declined to comment on how much the co-op spent on electricity, but with rates about 20 percent higher today, Hirschfeld estimates the property shelled out nearly $470,000 on electricity before it submetered the units. (Tower East has a particularly high common area electric bill because it has central air conditioning.)

However, Miller, the president, convinced members that if electric costs were reduced by 40 percent (or $188,000, according to Hirschfeld’s estimates), maintenance fees would be lower for all the shareholders, and that, says Miller, would up the value of the apartments. This seemed to convince wary members.

Moving Forward

In October 2011, the board selected AMPS-ELEMCO to design, install, and manage the billing of the new system. But in order to move forward, the board needed a majority approval of the shareholders.

Until December 2012, a market-rate building that was 100 percent owner-occupied could install a submetering system with a simple majority approval of the board and the shareholders. In those cases, the building only needed to send a letter to Con Edison alerting the company to the change. (Under new rules, buildings no longer need the shareholders’ OK, but must instead have their plan vetted by the New York State Public Service Commission, a process that can add months to the process.)

The board, represented by Robert Friess, president of AMPS-ELEMCO, presented the idea to all the shareholders at the building’s annual meeting. He explained how the process would work and how the billing would change after the submeters were installed. The board told residents that if they took individual electricity charges out of the maintenance costs, fees would go down. If they wanted to pay less for electricity, they could shut the lights off or upgrade their appliances. Without submetering, they would have no control over soaring electric costs. By tying the argument to maintenance costs, he convinced residents of the plan’s benefits to them.

Most questions focused on how billing would work – few residents suspected that they might be the ones who would see a higher bill and fewer still asked about what toll the installation process would have on their individual units. Recalls Miller: “They loved the fact that they didn’t have to pay for their neighbors, and [that] they have the ability to reduce their costs.”

Many were also concerned about how long the project would take and how inconvenient it would be. As Tower East is a luxury building, many residents had high-end finishings in their apartments and worried that a meter might be an eyesore or the installation could damage expensive tiles.

Ultimately, the measure squeaked by with a slim majority. Once the shareholders had approved the program, Friess sent a letter to Con Ed, letting the company know about the project, and then submitted a proposal to NYSERDA so it could be eligible for a $34,000 rebate. The building paid for the $89,941 project out of its reserve funds. By March 2012, work was set to begin.

Although the Tower East board sees the approval process it underwent as fast – from the time it reconsidered the submetering idea, the project sped along – Hirschfeld counters: “Was it fast? I look at the [starting] time [as] when they first contacted me six years ago.” By not acting immediately, he argues, the building missed several years of savings.

Stepping In

A major challenge when submetering a building is that workers must get access to each apartment. If crews have trouble doing that, it can delay the entire process, adding to the final cost. Installing submeters in 132 units can take two months, as resident schedules need to be accommodated and damage to paneling and walls might need to be repaired. In units that have been remodeled and updated, installing the equipment can prove daunting. Usually, the biggest challenge is coordination. If the electrician finishes one unit at 11 A.M. but can’t get access to the next one until 2 P.M., the crew loses three vital hours in a day.

“Normally, when an engineer gives you a timeline, I double it,” says David Lipson, managing director at Century Management, which manages the property. “But this project went a lot smoother than anticipated. We projected two months, and they did it in under 30 days.”

Adrian Sanchez, the resident manager, knew he needed the full cooperation of the shareholders for the project to work smoothly. At the annual meeting, building management had told residents that Sanchez would need access to all the apartments to install the submeters, which are about the size of a deck of cards.

The building had chosen the Intech 21 Power Meter PM-2104, one of the four submeters eligible to participate in NYSERDA’s advanced submetering program. The five-by-five-inch device was placed next to the circuit breaker. Except in a few apartments that had been combined, the circuit-breakers were in the kitchens. The meters use a wireless communication technology that makes reporting data easier and is able to penetrate thick concrete walls with the aid of circuit relays along the way.

It wasn’t until long after they had signed off on the project that many of the shareholders realized that some paneling or cabinetry in their units might be disrupted. By that time, however, the project was already under way and they had no other options. Says Miller, “Nobody asked beforehand, ‘Will I have to change my shelving?’” In some cases, the building paid to restore damaged finishings.

Before work began, Sanchez met with Friess and the electricians to devise a plan. He visited every apartment, taking photographs of each one. The team targeted the most complicated units and anticipated problems. A week before the job started, Sanchez and the electrician visited every unit and planned out the schedule. They decided to tackle the most challenging apartments first. Notices were sent out to all the shareholders letting them know when they would be in their apartments and that they would need access. “We were proactive, we prepared, and we had a game plan,” says Sanchez.

Speedy Work if You Can Get It

A few days before work began, all the material arrived on-site. Sanchez made sure he had his carpenter, painters, and plaster workers available to do any repairs. He devised a schedule for how to proceed, starting with the most difficult unit, which had cabinetry and paneling blocking the area where the submeter would go. That apartment took the entire first day.

After that, work sped up. Sanchez divided work between two electricians so two apartments could be worked on at the same time. He sent his crew into a unit before the electrician arrived to prep it. After work was complete, another crew would come in to make any repairs. On his desk, he kept a calendar that listed all the apartments scheduled for the day. If they made their way through the list and still had time, he took an apartment from the following day and moved it up. “He’s very knowledgeable about the building and just has a very militant approach to a project like this,” says Lipson.

On average, the team completed 10 units daily. Some days, they did as many as 14. The crew took lunch every day and logged no hours of overtime. Having easy access to all the apartments guaranteed that the crew could work as fast as it needed without having to wait to get into an apartment. “I’ve been here for 10 years and the trust is there,” says Sanchez of his unfettered access to apartments. “The trust was carte blanche.”

The work was finished in two weeks. In August 2012, residents received their first bills. Some residents saw their bills spike. But others noticed a sharp drop.

Many of the residents who saw increases were caught off-guard. About 10 percent of the shareholders approached board members and building management, stunned by the changes. One shareholder who has a three-bedroom apartment saw his bill rise by 30 percent. He was using more than double the amount of electricity Miller used for the same size apartment.

“He said something about it to me,” recalls Miller. “But the answer was: this is your own fault.” Miller adds that complaints have dropped off substantially and he hasn’t heard from frustrated residents in several months. It is too soon to tell, however, if usage has fallen overall.

But change will come. “They have to adapt to the fact that they are now facing an energy bill,” concludes NYSERDA’s Zias. “Now they can consider their energy destiny.”