Most property owners understand the basic benefits of water submetering: residents can control and lower their total housing costs by conserving usage, communities benefit through lower operating expenses, and the environment benefits through ongoing efforts to conserve water usage. Less well understood, but equally important are the cost saving benefits that can be realized if your submetered properties are billed using independently constructed, property-specific billing rates.
Many utility billing services artificially force the total charges billed to residents to equal the master bill. This approach is simple, easy to administer and requires no understanding of the underlying tariff. Is this the right approach for your property? We don't think so.
First, since the amount billed to residents exactly equals the amount shown on the master utility bill, there is no way to independently verify that the utility is using the correct rate for your property. Utilities often make mistakes in setting up property utility billing rates. And these mistakes can result in ongoing, undetected overcharges.
Second, underground and internal water leaks remain undetected when resident charges are forced to equal the master charges. Since the master bill includes the costs associated with water leaks, residents may be charged for water that did not flow through their meter.
Third, if submeters in any unit are not working, the cost of water usage in those units is passed along to all other residents whose meters are working.
Our approach to rate development is threefold:
Understand the local tariff.
Test our understanding of the tariff by replicating the master utility bill.
Create a property-specific billing rate that conforms to the local tariff.
Property-specific billing rates leverage the cost saving potential of submetering, maximize recovery of utility costs and produce resident bills that accurately reflect usage.