The Death of Submetering

The board of directors at the North Queensview Homes was getting desperate. Electricity bills at the 364-unit co-op were staggering, and there seemed to be little that the board could do because the property was a “master-metered” complex, where electricity usage passed through one meter and residents were billed a proportionate amount, based not on usage but on their apartment size.

“Because you didn’t pay for what you used, there was no incentive to conserve,” says board president Anthony Gigantiello. “Some people were using electricity indiscriminately, which wasn’t just wasteful – they were being subsidized by the rest of the building. It wasn’t fair.”

But North Queensview found a solution. In 2015, the board had submeters installed in each unit so that residents would be billed for what they actually used. Besides the potential future savings in electricity, the board got a break on installation costs, thanks to an incentive program by the New York State Energy Research and Development Authority (NYSERDA), which covered half the cost of the devices.

“Having residents be responsible for their electric bills was a huge line item off our budget and allowed us to reduce monthly maintenance by an average of $50 per apartment right away,” says Gigantiello. Because they were charged for what they used, “people stopped leaving lights on all night and their ACs on 24/7. They feel good about conserving. Everybody is very happy.”

But such happy endings may be a thing of the past. Though the popularity of submetering began to take off about a decade ago, and though there have been some inspiring success stories, NYSERDA has terminated its Advanced Submetering Program (ASP), which had offered reimbursements of up to $250 of the average $500 submeter purchase price per apartment for multifamily residential dwellings with more than 50 units. At the same time, the New York State Public Service Commission (PSC), which regulates and oversees public utilities, imposed a new regulation requiring buildings installing submeters to incorporate a “disconnect capability,” which enables building owners or boards to shut off an apartment’s electricity for non-payment, in accordance with the Home Energy Fair Practices Act.

Dean Zias, NYSERDA’s project manager for New York City, says the changes are part of Governor Andrew Cuomo’s “Reforming the Energy Vision” strategy, which is designed to make the state’s electrical system cleaner and more affordable. “Rather than encouraging conservation by offering government cash incentives, there’s a bigger focus now on getting private companies involved in energy efficiency and encouraging market competition to bring costs down,” Zias says. “Programs like ASP don’t fit in with the new plan.”

The immediate effect, however, could be painful for co-op and condo boards looking to reduce energy bills. “For the vast majority of master-metered buildings, the disconnect capability requirement will more than double the cost of submetering,” says energy consultant and engineer Herbert Hirschfeld. “NYSERDA still offers an incentive through another program that would be roughly $15 per apartment, which basically amounts to nothing. The combination of the drastic NYSERDA cuts and the PSC requirement essentially marks the end of submetering in the existing residential building marketplace.”