Submetering: No Longer a No-Brainer

On paper, electric submetering is a no-brainer for co-op and condo boards. Instead of the “master meter” system of dividing the building’s total electricity bill by the number of apartments, under submetering each apartment pays for the electricity it uses. The incentive to conserve is obvious, and total usage – and costs – usually go down sharply. Despite some pushback from residents who resisted the change for selfish reasons (because they had to pay for their wasteful ways), more and more boards were embracing submetering.

But early this year, the New York State Energy Research and Development Authority (NYSERDA) terminated its Advanced Submetering Program, which had offered reimbursements up to $250 for the average $500 submeter purchase price per apartment for multifamily residential buildings with more than 50 units. Meanwhile, the state Public Service Commission imposed a new rule requiring buildings installing submeters to include a “disconnect capability,” which allows boards to shut off an apartment’s electricity for non-payment. This capability more than doubles the cost of installing submetering – effectively making it unaffordable for many boards.

These developments were bad news to Brightwater Towers, a 734-unit complex across the street from the New York Aquarium in Coney Island. A Mitchell-Lama cooperative that was converted into a condominium in 1992, the 24-story dwelling, like all of the state housing program’s buildings, is notoriously energy-inefficient.

“We’re paying about $1 million a year,” says board president Pavel Moreff. “We became interested in submetering about a year ago because we knew it was the only way to change people’s behavior and make them consume less. But we faced a big obstacle because our bylaws clearly state that the board of directors must supply electricity to unit owners.”

In the interim, the board took steps to curb electricity costs, including changing hundreds of fixtures to more energy-efficient ones. “But there were a lot of other major items on the agenda that were more urgent, like plumbing jobs and exterior repairs,” says Nicholas Dubovici of FirstService Residential, the property’s general manager. “It was overwhelming to add submetering to the mix, so the discussion was tabled.”

The board finally met with energy consultant and engineer Herbert Hirschfeld in March, only to learn about the NYSERDA incentive cuts. “Even that didn’t kill our interest at first,” says Dubovici. But once they were informed about the disconnect capability requirement, board members voted unanimously against proceeding.

“The cost of submetering has simply become...prohibitive,” says Dubovici. Brightwater, he adds, has since started turning off half the bulbs in the lobby overnight in an attempt to power down.

A no-brainer has become unaffordable.