How to Submeter

By Lisa Iannucci, Contributing Editor

Submetering has taken a serious place in the discussion of how residents can conserve resources. Until recently, allocation billing was the most common method used to bill residents on their usage, with the calculated amount included in the resident’s monthly charges.

Submetering proponents say that it’s an incentive for residents to conserve and reduce their bills. Critics say that there isn’t enough data to show that submetering is financially successful for a building.

Michael Miller, CEO of American Utility Management, says, “There is this perception that if you put a submeter in the unit, there will be a reduction in usage, but the data doesn’t corroborate that. You may also spend $50,000 for installation to get the same economic benefits of allocation billing. From the owner’s perspective, it’s an enormous amount of capital to lay out.”

The National Multiple Family Submetering and Allocation Billing Program’s 2004 study showed that submetering can save 15 percent, while no water savings were found through allocated billing. However, it stated that any separate billing system should be coupled with complete plumbing fixture upgrades within a specified time.

Miller explains that an owner also has to budget for maintenance fees. “You need about $3,000 to $5,000 in maintenance costs per year, because these systems do need to be repaired.”

If a building is going to be submetered, there are additional factors to consider.

“Not all buildings can be submetered,” says Jeff Bauer, vice president of utilities, AIMCO. “It depends on the age of the building and whether it has one point of entry for the water.”

Safety is also a concern. “Pipes that are too old or a building that has had galvanized piping could be an issue,” says Bauer.

Most importantly, managers should research local building codes before any submetering work begins. “The building might need to be brought up to code before a meter is allowed to be installed,” says Bauer.

Working with residents during a submetering installation might also bring its own challenges. “There’s the inconvenience factor, so it needs to be planned out well and [residents] need to be told that someone is coming to the unit,” says Miller. “There’s also the chance, although it’s remote, that there could be water damage.”

The bottom line is to consider whether the cost of installation will ultimately save you in the long run, or if allocating the expenses is more suitable.

To comment, e-mail Erika Schnitzer at [email protected]