It’s a new year but not a new day for water sub-metering. While a few states and municipalities have jumped on the bandwagon of requiring sub-metering for billing of individual units at multifamily properties, the industry does not anticipate a major push for implementation of such laws on either the national or local level in 2012.

Sub-metering is currently a requirement in Massachusetts, North Carolina and Texas. If residents are to be billed for water, a multifamily developer must install sub-meters to accurately assess the usage of each individual unit. Certain municipalities are beginning to dive in, too. In 2010, San Diego became a trailblazer for obligatory sub-metering when the city passed an ordinance requiring sub-meters at all new multifamily developments, as well as in existing multifamily properties where interior plumbing is being replaced entirely.

The move to mandate sub-meters, however, has been slow to spread, and the prospects for a pick-up in pace in 2012 are not bright.

As 2011 drew to a close, there appeared to be a glimmer of hope on the horizon for mandated multifamily sub-metering in California with Assembly Bill 19, introduced by State Assembly member Paul Fong in late 2010. AB 19 flowed with ease through the Assembly Committee on Water, Parks, and Wildlife, which green-lighted the bill with a unanimous vote in March 2011. That, however, was just the beginning. Last year brought resistance and a series of amendments, and the New Year has brought renewed disappointment. Fong’s office confirms that AB 19 is, in legislative lingo, dead.

That’s right—water sub-metering legislation in one of the country’s most energy efficient states has gone down the drain.

“There are so many parties that want different things,” Jeffrey Peterson, executive vice president and general counsel for American Utility Management, says of AB 19. “Tenant groups don’t want administration fees, but landlords do. Utility companies do not want to be involved but some tenant groups and landlords are saying, ‘We do want you involved.’ There’s push and pull, and that’s the problem with state-level legislation. There are so many parties involved and there are so many voices having concerns, so they have a very difficult time pushing forward legislation to require sub-metering. It’s easier on the local level, but it’s more effective on the state level.”

Among the many voices that frequently come into play in official matters of submetering, are those who express wariness of the potential abuse of submetering laws among landlords. “In some states where you have no oversight at all, where there’s nothing preventing the landlord from garnering any income off of passing over utility costs, you may have those people who do the wrong thing,” explains Kimberly Godsey, director of legal affairs with energy management solutions provider Minol USA. “In Texas, we have rules that actually restrict what we can and cannot do as far as submetering [and] allocation. In Florida, you have those rules; in North Carolina, you have those rules.”

Advocating a system of checks and balances for multifamily submetering, Godsey believes, is a task that falls on the shoulder of conservation associations. “You’re seeing some states giving in to relaxed efforts in regards to submetering and some states hindering efforts to push it. So if we all don’t band together to help push these efforts in a way that everyone is accepting of the thought of submetering, and are not seeing it as an effort to increase the landlords profit or undermine the tenant, then we’re not going to have a broad agreement across the states.”

And then there are those occasions when the unexpected can cause a pool of naysayers to evaporate. Crisis put the Peach State on a fast track to making sub-metering at multifamily properties mandatory. “They’re running out of water; that was a big reason why Georgia wanted to put in rules requiring sub-meters,” AUM’s Peterson said. “A great way to make people use less water is to have them know what they’re using.” The severe drought led the U.S. Secretary of Agriculture to identify 151 of Georgia’s 159 counties as federal agriculture disaster areas in 2010, and in 2011, 150 counties earned the same unfortunate designation. Officials took swift action in light of the shortage. With the passage of the Water Stewardship Bill in 2010, Georgia became the first state to require sub-metering for both multifamily and commercial buildings.

The increasing scarcity of water may very well become the inspiration for new laws requiring sub-meters at new multifamily developments in other states. “I think what’s driving sub-metering right now is water shortages. It’s pretty clear that there’s a correlation and I think that’s where you will see legislation occur,” Harry Apostolos, president of Guardian Water & Power, notes. “Sub-metering can bring about anywhere from a 30- to 40- percent drop in water usage. A large percentage of people live in multifamily housing and a lot of it is not metered. It’s a way to conserve water usage by sending a price signal to residents so they can associate a block of water with the cost, and that’s what brings about conservation, making the connection between how much they use and the bill they get every month.”

AUM’s Peterson agrees that sub-metering laws will become more popular among states and even on a national level when options for addressing shortages dwindle. In other words, lawmakers will make the laws when they have to. “I would say that if certain issues arise—like population growth, droughts and the aging infrastructure rearing its ugly head and causing issues with capacity—everybody’s going to start looking at how we can conserve water,” he attests. “The multifamily industry is a large market and a large user of water and, without any requirements, tends to be wasteful.” As per a recently released report by CNT Energy and AEEE, multifamily units account for 17.4 percent of all residential housing in the country. Washington, D.C., New York and Hawaii lead the list with respective multifamily-unit percentages of 49.7, 32.4 and 32.3 percent.

Still, despite the benefits of conserving water and the reduction of costs for usage, laws necessitating multifamily sub-metering are by no means becoming a trend—at least not yet. Some believe a national mandate would solve the problem in one fell swoop. “I don’t think we’re a long way away from it,” Godsey of Minol USA says. “I know everything’s been pointing toward conservation efforts as a whole nationwide, so sub-metering being a part of that, I don’t think we’re far from it. Will it pass this year? I’m not sure because the magnitude of such oversight is going to fall upon the states’ hands. I think that’s what’s going to be the primary issue.”

Another major barrier that is hindering action on sub-metering is a simple one. “There’s a ‘there are bigger fish to fry’ mentality,” Peterson notes. “Legislators go onto the energy side—the high-efficiency features, the installation of Energy Star appliances in apartments—rather than the water side. The idea is, ‘Let’s tackle the low-hanging fruit, big costs first and then we’ll tackle the smaller things.’”

On a national level, Peterson, Godsey and Apostolos concur: Sub-metering legislation is coming, but it’s anyone’s guess as to when it will make a splash in the halls of leading lawmakers. “It will probably be when the cost of water gets to a point that it shows up in the newspaper headlines and people are made more aware of it,” Peterson speculates. “But it’s hard to predict if that’s 2012 or ’14 or ’20. At some point it will, but nobody knows when.”

#http://www.multihousingnews.com/features/going-down-the-drain/1004050166.html

By Harry Apostolos, CEO

Guardian Water & Power

INTRODUCTION

“You can’t manage what you don’t measure” is an old business adage. It means that unless you measure something you won’t be able to tell if it’s getting better or worse. You also won’t be able to manage for improvements.

The measure-manage concept is especially true when discussing utility expense management. In the multifamily housing industry, utility expense management starts with submetering. Submetering systems generate the data needed to calculate consumption-based utility bills.

Interval submetering transforms submetering data into actionable information that lets residents and managers more effectively manage utility expenses.

SUBMETERING

The benefits of submetering have been clearly documented. Industry studies show that utility usage drops up to 39% when individual submeters are installed in each apartment unit. These studies compare resident consumption patterns in metered apartments receiving monthly utility bills vs. unmetered apartments where residents are unaware of their actual utility usage and the cost associated with that usage.

Those residents who receive a monthly utility bill based on metered service consume significantly less than those in un-metered apartments. But what if residents (and property managers) could see actual usage before the next monthly bill arrives? Could actions be taken to drive utility usage even lower and to build better resident relations?

INTERVAL SUBMETERING

Advances in measurement and information technologies now make it possible to transform monthly utility bills into daily (or more frequent) consumption snapshots. Properties equipped with radio frequency submetering systems and appropriate backend software applications can transmit individual or property-wide snapshots for viewing on computers or smart phones.

The accompanying graph shows an apartment resident’s cumulative water usage as of December 15^th compared with cumulative usage on the 15^th day of the 12 preceding months.

By comparing current month-to-date consumption with prior month’s usage, residents can make adjustments in their usage or detect possible maintenance problems – before the end of the billing period. This helps residents lower their utility charges and promotes resource conservation.

“We’ll look for large usage spikes in occupied units and alert residents before the end of the billing period,” says Steve Hess, President of Kohr Royer Griffith Inc. “If the spikes continue for several days, they will set up a maintenance call to see what’s going on. We’ll also look for vacant units that show water usage, which usually means a toilet is running.”

For property owners and managers, interval submetering helps build better resident relations and better bottom lines. To illustrate the point, the following chart ranks 30 apartment units from highest to lowest water usage during the first 15 days of December 2011.

CSN Realty, a real estate investment and property management firm located in Deal, New Jersey, uses consumption rankings like the one above in two ways:

“First, we look for vacant units that show water usage,” said Matthew Marshall, CSN’s Senior Finance Manager. “Vacant units that show usage usually mean a toilet is running. Leaks like these that go undetected for weeks eat into our bottom line. Guardian daily consumption profiles help us avoid costly leaks. Second, we also look for large usage spikes in occupied units and alert residents.  If the spikes continue for several days, we set up a maintenance call to see what’s going on,” says Marshall. Building better resident relations is an important part of CSN’s utility expense management program.

CONCLUSION

“Not everything that counts can be counted” is another old adage which means that there are some important things that can’t be measured. However, in the multifamily housing industry, utility expenses definitely count, and they can certainly be counted in daily increments with interval submetering to reduce utility expenses and promote conservation.

ABOUT GUARDIAN WATER & POWER, INC.

Guardian Water & Power is a leading provider of submetering and utility cost recovery services for multifamily and commercial property owners. Guardian services include submetering system installation for water, gas and electric, billing and collection services, regulatory research, rate analysis, utility billing auditing, loss detection and control services.

GUARDIAN SCAN+®

Guardian Scan+® is an interval submetering service that helps reduce utility expenses in multifamily properties. Property owners, managers and maintenance personnel can access this new information service at Guardian’s website. Guardian Scan+® provides utility usage profiles on a unit-by-unit basis in continuous 24-hour time increments. “We designed Guardian Scan+® so that property managers can quickly identify water leaks and vacancy heat loss,” said Robert Kennedy, Guardian’s System Development Manager. “Leaks and heat losses that would otherwise go undetected until release of the next monthly property report, can now be proactively identified.”

1. Where all common areas are separately metered, subtract the actual common area usage from the total amount of water purchases.

2. Where common areas are not separately metered, subtract 15% from the total amount of water purchased where there is an installed landscape irrigation system.

3. Where there is an installed landscape irrigation system that is separately metered, subtract 5% from the total amount of water purchases where there are other common areas that are not separately metered, such as a pool or laundry room.

4. Where there is no installed landscape irrigation system, subtract 5% from the total amount of water purchases where there are common areas that are not separately metered.

This article was originally published by the Cumberland County Apartment Association.