Note: The information on this page is for reference by state legislators and legislative staff. If you are a homeowner, landlord or tenant with questions about submetering in your area, please contact your state department or public utility commission department of consumer protection.
Utility submetering is the implementation of meter systems that allows the operator of a multi-unit property to bill each unit for individual utility usage through the installation of additional meters behind a utility meter.
Submetering can be managed by a third-party entity that does not produce electricity, gas or water but resells utilities to the customers behind the utility meter. Utility submetering can also be the installation of an additional meter on the customer side of a utility meter to obtain data about a specific end use or uses inside a facility. Utilities may install these meters on specific appliances as part of utility-managed interruptible service rates or demand response. Submetering differs from master-metering, where a landlord purchases energy at a commercial customer rate and then sub-meters electricity to tenants at a residential or smaller commercial rate.
Twenty-two states, three counties and Washington, D.C., have statutes, regulations, or rulings on utility submetering, as shown in the table below. Several local ordinances are also included in the chart below. While state approaches to utility submetering vary, polices may establish provisions for acceptable uses of submetering in properties, create a mechanism for determining customers charges, and determine if building owners may charge customers additional fees.
Several states, including Alabama, Arizona, California and Texas, have separate provisions for submetering water versus electricity. At least three states—Alabama, Connecticut and Maryland—require a utility commission’s approval for specific components of submetering policy. Submetering policies determine if pricing is calculated volumetrically or formulaically while one state requires pricing to be “equitable” to customers.
Policies also address additional fees and service charges by utilities and building operators, including formula-based fees or service charges, device fees; flat service charges; and other “reasonable” fees or charges. Additionally states may prohibit additional fees and service charges. Statutes also address submetering versus mastermetering policies in specific circumstances. A number of policies address fees for late payments separately than other fees and charges. An Oklahoma regulation authorizes submetering if the intent is energy conservation.
Note: The information on this page is for reference by state legislators and legislative staff. If you are a homeowner, landlord or tenant with questions about submetering in your area, please contact your state department or public utility commission department of consumer protection.
CHART: State Submetering Policies
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