Metering System Helps Landlord Control Utility Costs-and Rents

With six apartment complexes and more than 1,600 units in its portfolio, Dublin, Ohio-based Platinum Property Management can boast of knowing a thing or two about running rental units. But when it acquired the 84-unit Western View Apartments last year, a new power monitoring system installed by the previous owners just prior to sale taught the company's managers a lesson regarding new options for managing utility costs.

The previous owner had recently installed a new electric submetering system that allows electricity usage to be billed directly to tenants, yet costs significantly less than rewiring individual meters for each unit.

Generally, for large complexes that don't have individual unit meters, landlords recover their utility costs by adding an estimated usage factor to monthly rents. However, this approach limits the incentive any one tenant might have to conserve electricity and forces higher annual rent raises than might otherwise be necessary to allow landlords to recoup rising utility costs.

The Western View development includes a number of three-story buildings, with wiring "daisy-chained" to a single circuit board in each building. Retrofitting individual exterior meters for each unit would have required running new wire from every apartment to the outside of the building.

This would have been an affordable alternative during construction but would have been an expensive after-the-fact option. The electrical contractor, Ron Ackley of Chillicothe, Ohio-based C & J Electric, estimated this method would cost eight times as much as the selected submetering approach.

This tactic supplies each apartment with a kWh submeter equipped with radio-frequency (RF) transmitters that communicate electricity usage to a central monitoring station. Intermediate repeaters are also installed where needed to boost signals. A third-party meter-reading service prepares bills and delivers them to the property manager, who then distributes them to each individual tenant.

Platinum Property managers say submetering helps them keep their rents competitive and provides an incentive to tenants to better manage their own electricity use. A before-and-after comparison substantiates the conservation hypothesis: Electricity consumption has dropped 17% in Western View's submetered units in the year since the system was installed.