ENGINEER CO-OP CONDO ENERGY POLICY OP-ED

The New York State Energy Research and Development Authority (NYSERDA) recently launched the Electricity Reduction for Master-Metered Buildings (ERMM) program described above. It also offers nominal incentives for replacing appliances and lighting with more energy-efficient equipment. A primary purpose of this program is to make up for the significant lack of submetering implementations undertaken under the previous Multifamily Performance Program.

In a master-metered building, co-op and condo residents don't pay for their own actual electrical energy usage, but are charged a flat rate that is typically included in monthly maintenance or common charges. Local utilities do offer a favorable bulk rate to master-metered buildings, which in Con Edison territory is substantially less than the directly metered rate.

Measure for Measure

Regardless, it has long been recognized in the energy field that "you can't manage what you can't measure," and many previous NYSERDA studies that I conducted have confirmed that installing "pay for what you use" submeters in a master-metered building will reduce its electrical energy consumption by 18 to 26 percent. If the consumer has to pay for what he or she actually uses — which is really the necessary ingredient to conserving — you will have a meaningful energy policy.

Most of the roughly 4,000 master-metered buildings in New York State (representing around 500,000 apartments) are in the New York City metropolitan area, including a sizable number of Mitchell-Lama buildings. You'd think these buildings would be prime candidates for ERMM. But because of very restrictive requirements, the ERMM program excludes low-income housing, Mitchell-Lama rental and limited-equity co-op buildings (originally constructed during the 1960s as master-metered buildings because of lower construction costs and relatively cheap electricity) and even market-rate rental buildings that contain a single tenant receiving assistance from programs such as Section 8.

In fact, this is how bizarre the rules are: a building with 1,000 apartments that includes a single apartment occupied by a Section 8 tenant is excluded from the ERMM program.

Why would an energy program be launched that excludes the substantial majority of potential participating buildings? Good question. When I asked NYSERDA staff members about that, they responded that the program parameters were stipulated by the New York State Public Service Commission (PSC), an agency whose mission includes protecting consumers and supporting New York State policies designed to improve overall energy efficiency. So, why is the PSC standing against one of its own stated goals?

Alice in Energy Land

In order to understand the PSC's policy, you have to look at some facts: NYSERDA-sponsored energy studies have confirmed that, in a master-metered building, about 10 percent of all the apartments consume roughly 25 percent of the residential electricity, regardless of the size, location or tenant makeup of that building. These residents use more than twice the electricity of the average apartment. Installing "pay for what you use" submeters in such buildings would force this minority to pay its fair share of actual usage, which, in turn, would mean a larger monthly bill — something those residents would naturally oppose.

In a 1,000-unit cooperative, for example, unless they altered their consumption patterns, about 100 shareholders would end up paying more for their electricity. Typically, a group of these "abusers" of electricity will band together to attempt to derail the submetering process by lodging complaints with the PSC and/or with their local politicians.

This represents a perfect example of a vocal minority imposing its will on the silent majority —  something we often see in our society. If, for instance, a local politician receives 20 to 30 complaints about a "pay for what you use" submetering proposal in a 500-unit building, he may then intervene on their behalf by contacting the PSC, appeasing a small segment of his or her constituency at the expense of the majority who would support responsible energy policies.

The PSC itself, which is staffed by public servants, is uncomfortable when contacted by politicians and feels required to investigate every complaint. According to PSC staff members, this sort of intimidation wears down the staff and frequently results in delays or denials in approval of "pay for what you use" submetering applications. It also results in the development of ineffective policies that, in the case of ERMM, undermine the intent of the program and the creation of effective conservation policies.

In some cases, PSC staff members would probably prefer to rid themselves of these complaints by letting submetering disappear altogether. That disappearance would certainly simplify matters —  regardless of the public benefits of energy conservation.

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