When Technology is Ahead of Multifamily Regulations – What Are Your Options

The rapid evolution of technological advances in energy and utility metering and billing platforms is constantly surpassing the current regulatory arena causing most companies to turn a blind eye. From new software-based HVAC systems to touchscreen metering devices, in-house legal and compliance departments are encountering difficulties in advising their clients appropriately considering legislation is light years behind.

In looking at the Texas market, many companies are selling smarter technology to multifamily building owners at low costs with enhanced energy efficiency, guaranteed savings and cost-recovery for utility usage. Simultaneously, the Substantive Rules governing electric, water, and HVAC metering of multifamily properties in Texas remain steadfast with requirements to use only watt-hour or volumetric sub-meters or choose to allocate energy and utility charges by subpar standards, such as by square footage or number of occupants.1 Such outdated regulations limit owners from using smarter technology that may provide a more accurate measurement of energy and utility usage.

That being said, every new technology doesn’t necessarily warrant new legislation; however, outdated legislation can create havoc for regulatory and compliance teams. For example, attempting to accurately determine whether use of energy efficient systems that provide Green Building Certifications is within compliance may set up companies for potential risks against future regulatory violations and litigation.

Allocation: Is it Really Fair?

The multifamily industry needs to remain aware of the currently regulatory landscape and its puclimits in allowing property owners and consumers to potentially benefit from smarter technology.

Specifically, in Texas, tenants may be billed for water and electric usage based solely on the square footage and/or occupancy of their apartment unit. This type of current legislation may cause tenants to pay for energy usage not used solely by the tenant.

You may have one tenant occupying an 800-square foot apartment unit and three
tenants occupying a similar 800-square foot apartment unit while both units are billed for the same amount of energy usage. By adding smarter technology solutions as an option under current regulations, property owners may be able to more accurately measure usage by applying additional factors, such as thermostat set points, valve position and timing, as well as individual unit energy load (demand) for a more accurate assessment of energy usage.

The scenario above is common. In Texas alone, the Public Utility Commission of Texas lists 6,970 submetered and allocated properties. Of that 6,970, only 24% are submetered, with the remaining 75% allocated.

The following provides a high-level overview of some compliance issues with the use of smarter technology for measurement of energy and utility consumption:

Key Focal Points with Technology and the Resulting Issues
Why Regulatory Change is Critical

The primary reason for regulatory change is to meet the demands of property owners who are seeking more energy efficient systems to accurately assess energy charges to their residents. In turn, consumers are seeking more accurate billing methods for energy consumption. Property owners benefit from smarter technology due to the design/installation flexibility, lower installation and maintenance expense, long-term energy cost savings and green building certifications. In addition, consumers also benefit from smarter technology with more accurate measurement devices/software, energy savings due to efficiency, and lower costs allocated as a result of an owner’s savings realized overall.

So where lies the disconnect between regulatory agencies and the industry? Due to the literal meaning of the regulations and lack of regulatory action in the past years, property owners are limited in their use of smarter technology since such use will prevent recovery of energy and utility charges from their residents. In addition, property owners are entrusting the sellers of the smarter technology to provide the due diligence that will allow implementation and use of the technology in this current regulatory arena. Unfortunately; however, property owners are stuck with an enormous project that is of no use after proper review of regulations. Meanwhile, residents continue to be billed charges based on the most inaccurate methodologies of square footage and occupancy or outdated metering systems. 

To avoid these issues and take advantage of the smarter technology, consider the following steps to avoid future compliance issues:

Steps to Consider to Help Avoid Compliance Issues

  • Prior to purchase of smart technology systems, complete due diligence in (1) regulatory research (i.e., regulatory landscape, intent, need for approvals, etc.), (2) manufacturer studies, specifications, testing, actual use, and (3) review of seller’s references.
  • Search for third-party billing providers willing to work with you through the regulatory approval procedures, if necessary.
  • Conduct proper training of leasing staff to keep residents well-informed.
  • Ensure lease language incorporates new technology/billing methodologies with simple summary notices for ease of reference by residents.

While the current regulatory landscape does not incentivize owners to incorporate smarter technology and more energy efficient products within their properties, there are a few methods available that may allow owners to take advantage of energy savings.  Until legislation catches up, owners may have to take the extra, but necessary, steps to ensuring proper implementation of these smarter systems for measurement of energy and utility consumption.

Kimberly Godsey, Esq.
Attorney, Director of Legal Affairs
972.386.6611, x422

Kimberly has a wealth of experience in regulatory review and compliance. She led the development of Minol’s internal regulatory database that covers all fifty states and contains third-party utility billing compliance information from the utility provider requirements through state regulations. She has facilitated seminars for multifamily property owners in Texas and Massachusetts discussing utility billing compliance. She is a member of the Utility Management and Conservation Association.

She is a graduate of Texas Wesleyan School of Law (currently Texas A&M University School of Law) and is a licensed attorney in the state of Texas.

(1) See P.U.C. Subst. R. § 25.142, § 25.142, and 30 TAC § 291.121-127.


Electric Retrofits: What You Need to Know

If you own or manage a building with master metered electricity that is not submetered, you are likely getting zapped!

The average monthly cost for an apartment’s electricity usage is approximately $1,419 per year or about $118 per month. That equates to, not including common area expenses, a $23,600 electric bill just on interior usage for a 200 unit community.

If you haven’t considered submetering, now may be a good time to evaluate your options. Submetered apartments save between 15-25% on electricity versus non-submetered apartments. In addition to promoting conservation, many owners see a return on investment in less than 18 months.

Master Metered Electricity
A multifamily building with one master meter installed by the provider, or multiple in the case of garden style buildings, captures both common and interior usage for that particular building’s usage. In this scenario, the owner pays the entire bill directly to the provider.

Submetered Electricity
Submetering measures each individual apartment’s usage. The submeters are installed off the main line in a position that will capture all usage for lighting, appliances and HVAC where applicable (may require separate metering). The resident’s specific usage is billed back and allows for a fair and equitable solution to recoup interior electric expenses.powerstrip

Is Submetering the Right Choice for You?
The building’s electrical configuration will determine what type of submetering solution you will need so it is critical to know what to look for before investing.

Below are key items to evaluate:

  1. Locate the distribution panel. Is it in a common area closet, basement, outside or in each apartment?
  2. If the distribution panel is located in a common area closet, does the distribution panel have a circuit breaker for each unit so that each can be turned off by itself at the panel? For example: 12 units per floor or 12 units per building.
    • If each unit can be turned off individually at the panel, it makes sense and is less disruptive and expensive, to submeter at the panel. The submeters are installed either in the distribution panel itself or right next to it.
    • If you can’t turn off one unit at a time, the submeter must go inside the unit next to the distribution panel, usually in or near the kitchen. A flush mount meter is recommended for aesthetics.
    • If the apartment distribution panel is in a closet, a protruding submeter can be used.
  3. An outdoor distribution panel follows Steps 1 and 2 but requires a different, weather grade submetering solution. For example: An outside NEMA enclosure to house the meters.
  4. Determine the Amp Rating on the main distribution panel: 20, 50, 100, 150, 200 or other.
  5. Are the apartments labeled on the distribution panel? If not, this will need to be audited and identified prior to installation.
  6. Determine the phasing for the distribution panel: Single-phase, three-phase, Delta phase or other.
  7. How many wires feed the distribution panel? 2, 3, 4 or other?
  8. The number and location of the building(s) will determine how the electronics needed to read the meters will be installed. A site map is important. Certain topography (mountains and hills) requires careful placement of electronics so reads can be collected. Basements may require more signal strength.
  9. Determine where the data collector (a small computer that collects the reads) will go. An interior, dry and sometimes climate controlled space is required.

After conducting the above analysis, you are now ready to choose a submetering solution. A Request for Proposal (RFP) may be the easiest way to gather comparable proposals.  An RFP allows vendors to propose solutions based on your requirements so you can compare hardware specifics, pricing and labor. Remember that a licensed electrician should be included in the labor pricing and a drywall/painter as well if installing within the apartments.

Solutions by Electric Configuration

  • Distribution panel: The distribution panel is in a common area or basement and each apartment can be turned off at the panel. Mini meters are the best and least expensive solution. A mini meter is small, designed for residential application and generally works for 100A, 200A, and 400A electric submeters. They are perfect for metering electric consumption or production for nearly any 120V 2-wire or 120/240V 3-wire application.
  • Individual unit turn off: The electric for an apartment can only be turned off individually within the unit – A mini meter will still likely work plus an indoor flush mount enclosure. Additional expenses for drywall and paint work will need to be considered.
  • Outdoor application: An outdoor rated MMU (Multiple Meter Unit) is typically the best solution. An MMU allows for multiple outdoor submeters to be installed at the exterior distribution panel in a weather grade enclosure. Another option is to use socket style meters. There are pros and cons with these in that they rely heavily on available building space and if meter sockets are already available or would need to be installed.

Be prepared to bring in reliable electricians to help you select the highest quality and most cost effective submetering solution. They will also determine the best configuration for your building type. The payoff is well worth the effort – greatly increasing revenue and property value while also encouraging conservation.

Kate Forsyth
Director of Energy Management for Minol

About the Author
Kate joined the Minol USA team in August of 2009. She currently oversees the Energy Management Program with a special emphasis on utility provider bill payment, cost avoidance and green initiatives.

Prior to joining Minol USA, she was employed by REIT AvalonBay Communities, Inc. for more than 20 years. While with AvalonBay, Kate successfully lobbied for the passing of the submetering law in Massachusetts in 2005.

New Construction Utility Expense Management

Getting Your Asset Off to a Good Start from the Ground Up

What if on Day One of the earth moving on your new community you didn’t have to touch the utility aspect of the site?  And, if you wanted to understand what accounts have been created you only need to go to one place to see everything – from what utilities are set up to your current spend? And, what if you could outsource doing everything from powering up the accounts for the trailer right down to installing the last meter woodneeded at the lowest, possible rate available?

Introducing an Energy Manager to the construction team mix in the planning stages will help establish a strong utility expense management structures that carries throughout the life of the investment.

Finding the right person requires a basic understanding of the scope of work and practical benefits. They must have the knowledge to educate you on technology options, as well as the fine details associated with this complex service.

Anyone involved with new construction has experienced the hazards, frustrations, and hair pulling while trying to understand utility bills.

Benefits of Employing an Energy Manager from Day One: 

  • A controlled set up of utility accounts at the right time with the correct, lowest rate available is obviously the best case scenario. Let’s face it, construction companies have the accounts set up at the last minute, rarely worrying about whether the rate is correct. This is a temporary gig for them. You will manage or own the asset long term. An Energy Manager can handle set up based on the construction schedule, on time, at the right rate. No frantic phone calls and unnecessary delays to the project. And, if an issue arises, the Energy Manager sits on the phone with the utility company – not you.
  • The centralization and accessibility of data in an energy management software system is imperative. Imagine no more digging through piles of paper bills trying to find the one number you need. Also, with data being captured correctly and in detail, the ease of accessing it for monthly variance analysis and annual budgets is a breeze. Reports on usage, rates, expenses and exceptions is possible. And, so is making data-driven decisions.
  • Streamlining of A/P processes and the alleviation of work for the accounting and construction, teams, i.e., the rubber stamping of bills versus skilled, audit reviews before payment. For example, the initial paperwork to create accounts, important continuous service agreements and the creation of a standardized process with one point of contact for construction and management can all be handled by an experienced energy manager.

A central point of contact smooths the transition from construction to management with business rules dictating the allocation of bills to be paid based on certificate of occupancy acceptance:

  • Once operational, the Energy Manager continues to add value by eliminating work load for management and expertly handling all your utility needs:
  • Continuous bill auditing using defined metrics. Utility providers never stop making mistakes and rate errors or leaks left unnoticed will cost you big if undetected. Issue resolution on behalf of management is also a critical component. Early detection of problems, such as leaks, and quick resolution are vital to quality utility bill management.
  • Negotiation of procurement contracts is more than just calling brokers and looking for the lowest price. There are dangerous pitfalls of low kWh/high extra fees. A seasoned Energy Manager is crucial to avoiding costly mistakes. Important steps will include reviewing historical usage patterns for your portfolio, aggregating load to gain maximum deal, determining hedging options, scrutinizing hidden fees, finding reputable brokers to contact, manage and negotiate the proposal process, and ultimately present the best options for your consideration. Once a provider is chosen, the Energy Manager maintains and manages the contracts going forward.
  • Failure to connect management and billing. This shouldn’t be a manual process completed on site. Management teams are busy and will miss opportunities to capture all failures to connect problems. An Energy Manager uses a software program designed to capture all failures to connect based on rent roll data versus bill service periods. These would then become exceptions and billed out with an additional penalty fee where allowable by law.
  • If the data is centralized, a budget should be created at an account level based on historical usage patterns, current rate and researched increases triggered to occur in the month forward when actually taking place. Further, anomalies from the previous year, such as leaks, credits or true ups should be scrubbed so the next year’s budget isn’t skewed. This is not the common practice of last year’s expense plus 3-5% increases. It takes a seasoned energy management veteran’s depth of knowledge in utilities to create a realistic budget.

In conclusion, efficient and effective utility bill management is a reality. An Energy Manager will make sure your management associates never open another utility bill envelope.  They will save you time and money and likely make you even more money. Paying a utility bill can cost you upwards of $15 per bill to process. Considering that utilities comprises 16% of your expenses, finding a good energy management program should be a top initiative and not an afterthought.

Kate ForsythKate Forsyth
Director of Energy Management
410.292.7132   kforsyth@minolusa.com

Kate joined the Minol USA team in August of 2009. She currently oversees the Energy Management Program with a special emphasis on utility provider bill payment, cost avoidance and green initiatives. Prior to joining Minol USA, she was employed by REIT AvalonBay Communities, Inc. for more than 20 years. While with AvalonBay, Kate successfully lobbied for the passing of the submetering law in Massachusetts in 2005.

Minol Announces the Release of the Minomess 130 Polymer

Lighter weight and more cost-effective water submetering solution for optimal
Utility Expense Management

Addison, TX – June 24, 2015 – Minol announced the release of the Minomess 130 polymer water meter today at the National Apartment Association’s Annual Conference. The Minomess, specifically designed for multifamily and commercial usage, provides owners and managers with a cost-effective solution for managing their utility expenses.

In the past decade, U.S. cities have seen a trend toward higher water bills. A few of the driving factors are excessive consumption, increasing water costs, decaying infrastructures and droughts. According to a recent Circle of Blue survey, the price of residential water service in 2015 is uMinomess Polymerp 6 percent in 30 major U.S. cities; a 41 percent rise since 2010. With utilities accounting for 15% or more of an owners’ overall expense, submetering has become a necessity in sustaining positive cash flow throughout the portfolio. Three states, Texas, Georgia and California, require submetering on new construction with more states likely to follow suit.

“Studies show that submetering may result in a 10-26 percent reduction in that utility’s consumption,” said Corey Hauser, Vice President of Meter Data Management for Minol. “Installing a submetering solution not only increases property value and revenue but promotes conservation by measuring individual consumption and proactively identifying leaks. The Minomess polymer gives owners an even more cost-effective metering solution to maximize the value of their assets.”

The Minomess polymer meter is a single-jet meter for cold water applications. The polymer meter body provides a lighter weight and more cost-effective submetering option. The Minomess polymer and Minomess brass for hot or cold water application are both ANSI/NSF 61 certified and comply with AWWA C712, ISO 4064 and G13IT19001-ISO9000 performance standards.

Minol’s in-house Meter Data Management Team successfully maintains 1.5 million hardware components nationwide by proactively managing daily meter health for water, gas and electric systems. Traditional AMR systems are designed just for meter reads. Minol’s MDM solution provides two-way data to insure accurate data which results in accurate billing.

How to Calculate and Increase the Cap Rate on Your Multifamily Asset

The financial market has changed in the past decade with an emphasis on less speculative valuing of investment properties and more reliance on hard numbers. Investors evaluating multifamily assets are far more conservative in valuing a potential purchase for income growth in both the short and long term.  As a result, it is critical to understand a property’s net value and continually look for areas to improve cash flow.

While market location and prospective neighborhood improvements are enticing, today’s buyer is more interested in the capitalization rate (Cap Rate) as a true measure of worth. Cap Rate is defined as the ratio of a property’s net income to its purchase price. The obvious first step in understanding a property’s value is to calculate the Cap Rate.
Cap Rate Calculation

Let’s take this example:

A property of 300 rental apartments with a gross annual rent of $300,000

According to a 2013 NAAHQ survey, a master metered community spends about 46% of its income on operating costs. Of that amount, 13% is utilities. Conversely, a submetered or individual metered property spends about 53% of its income on operation costs with a cost of 6.2% for utilities.

A master metered property with an income of $300,000 will spend $138,000 in
operating expenses

A submetered property with an income of $300,000 will spend $158,000 in
operating expenses

The value of a property is calculated using a Gross Rent Multiplier or GRM.  If the property is in a good neighborhood with good occupancy, take the Annual Income x a Range of 9-11 multipliers to get what the property value should be.

GMR = $300,000 x 11 = $3.3 million

Now put it all together to get your Cap Rate:

Master Metered Property with a Net Operating Income of $138,000/$3,300,000 valued asset
= 4.27% Cap Rate
Submetered Property with a Net Operating Income of $158,000/$3,300,000 valued asset
= 4.8% Cap Rate

8 Tips to Increase a Property’s Income and Reduce Expenses to Improve the Cap Rate:

  1. Never underestimate relentless collection actions – For example, if your residents know you will begin to call, email and send letters 5 days after the rent was due, they will know you mean business.
  2. Carefully screen all residents through a proven application process to avoid delinquent payers and property damage.
  3. Additional income opportunities, with little to no investment, such as coin operated laundry machines, paid parking for premium spots, storage, pet deposits and premium apartment locations are easy to implement on new move-ins and renewals.
  4. Utility recovery can be done two ways where allowed by law: submetering and allocation. A 300 unit community with a cost of $397 annually per unit and a $35,100 investment will recoup about $31,266 the first year, $85,737 year two and $97,387 year three assuming a 2.5% turnover and a 15% common area expense. Simply put, submetering requires an investment and measures each apartment’s utility use, allowing the owner to bill the resident back. A typical payback is 12-13 months. Allocation has no investment and is a billing method that assigns a portion of the utility expense to each apartment based on a number of possible calculations: by occupant count, square feet, number of bathrooms, etc. All residents signed up at move in and renewal would result in net income.
  5. Conservation of common areas in the area of lighting, building envelope, insulation and central system upgrades can greatly reduce utility expenses. Each likely upgrade would need to be carefully vetted to determine the payback so you would know exactly when to expect an increase in income.
  6. Reduce vacancy. Keep in mind that every day an apartment sits vacant on a rent of $1,000 per month, you are losing approximately $33. At a 5% vacant rate, that’s $495 a week and $14,850 a month. Make sure your leasing staff is dedicated, skilled and focused on leasing as a top priority. To borrow a hospitality phrase – “Heads in beds!” – is what the daily goal should be.
  7. Raise rents annually so residents expect an increase and are prepared for it. A lower, consistent annual increase is better than trying to increase rents drastically and losing residents.
  8. Property improvements: If there is an improvement you can make that you can charge for and show a payback within a reasonable period, consider it.

It’s worth taking the time to determine and understand your Cap Rate. Once you do, you can review your options for increasing income. Each property has the potential to increase its Cap Rate. The question is how will you make it happen and what’s the best way to do it?

Kate Forsyth

Kate Forsyth

Director of Energy Management, Minol

Kate joined the Minol USA team in August of 2009. She currently oversees the Energy Management Program with a special emphasis on utility provider bill payment, cost avoidance and green initiatives. Prior to joining Minol USA, she was employed by REIT AvalonBay Communities, Inc. for more than 20 years. While with AvalonBay, Kate successfully lobbied for the passing of the submetering law in Massachusetts in 2005.

Illuminate Your Lighting Efficiency

Shedding the Light on Energy Savings

The EIA says 50-75% of your utility expenses are for electricity and of that, approximately   21% is just lighting. If you spend an average of $100,000 annually on one building that adds up to $21,000 just to keep the lights on! By simply making your lighting 25-50% more efficient, you could save up to $10,500 each year.

It sounds easy and it is. Below are some steps to get you started:

Step 1:   Determine how much you are using and spending

lighting-tipIt’s critical to know what you are doing now so you can assess opportunities for energy savings later.  You will need 12 months of common area bills that include the building’s interior lighting.  This should include all account numbers, billing date cycles, number of days in each bill, usage in kWh and demand kW, and expense. At the end of each month, calculate the rate by dividing expense by usage. This will give you a base analysis for where you are now versus when you initiate your lighting cost avoidance program. If possible, include a hyperlink to actual bill images to be referenced later as needed.

Step 2Complete a building lighting audit

You need to know what type of lighting you have, how often it’s in use and where it’s located.  A building diagram with notes is very helpful.  It is best to do the audit both during and after business hours. Below are some examples of questions to answer:

  • Are lights off in unoccupied spaces? (Stairwells, parking levels, fitness centers, business centers, party rooms, offices, basements).  There may be opportunities for reduced or sensor lighting.
  • Are lights in the models on sensors or timers to be off when unoccupied?
  • What are the model, types, and usages for your lighting fixtures in the main hallways and business areas?
  • What are the hours when lighting is used in business areas, hallways, basements, storage, garage, fitness, and business rooms?
  • Are you installing energy efficient lighting in vacants when turned?
  • Do you have the number of fixtures, number of lamps per fixture, type/number of lamps per ballast, wattage?
  • What dates were fixtures installed and what is their condition?
  • What is the daylight availability (windows near lighting)?
  • Are the tasks performed in the space (critical or secondary)?

Step 3: Low hanging fruit: Consider where you can change lighting hours, add motion sensors, timers, light reducers and use energy saving lamp bulbs.

This is the easiest, least expensive step you can make.  You know you can’t rely on people to remember to turn off lights but for a small expense you can make sure lights not used are off or energy reduced during day light hours or evening hours. Sensors, light reducers or timers in models, business centers, fitness facilities, basements and storage areas are key energy savers.  Even in the garage and stairways, you can usually install light reducing devices that will use half the energy when not in use without violating any safety requirements. Make sure you rid every lamp of incandescent light bulbs – these not only use more energy to light the space, they put off 2-3 times the heat and last a fraction of the life of an energy efficient bulb.

Step 4Hallway lighting

Hallway lighting can easily account for a large chunk of your common area electrical bill.  By choosing the best lighting for the task you can reduce your usage by 20-50%. If the fixtures are well-maintained, it may be worthwhile to research your options for replacement bulbs that would fit and be more energy efficient. If it’s time for replacement, you may pay for the new fixtures in energy savings within a reasonable time. A simple pay back analysis can help you determine what your best option might be:

To calculate a simple payback on your investment, divide the cost of the new fixtures by the annual cost savings using current rates. You have already determined your annual usage and rates in Step 1.  Now, you can apply the energy savings by installing the new equipment to the usage once

you have that number divided by the cost of the investment.  Easy Tip: Hallways and ceilings painted in light reflective colors increase the light glow and help reduce energy usage.

Finally, once you’ve completed Steps 1-3, it’s recommended to consult with lighting experts on your findings and determine the most efficient next steps toward energy savings. You and your budget will be glad you shed some light on your energy expense!


Kate Forsyth
Director of Energy Management and North East Sales Representative
410.292.7132  Ι  kforsyth@minolusa.com  Ι  linkedin

Kate Forsyth_thumbnailKate joined the Minol USA team in August of 2009. She currently oversees the Energy Management Program with a special emphasis on utility provider bill payment, cost avoidance and green initiatives.

Prior to joining Minol USA, she was employed by REIT AvalonBay Communities, Inc. for more than 20 years where she was responsible for increasing water, sewer, electric and gas collections via onsite associate training; augmenting utility reimbursements by instituting a collection and training process, creating and implementing a new utility recovery program, “Hot Water Energy, as well as developing a reinstatement and centralization of the collections programs for AvalonBay’s portfolio which consisted of more than 150 properties. While with AvalonBay, Kate also successfully lobbied for the passing of the submetering law in Massachusetts in 2005.

Water Submetering Best Practice Series: Part 1 of 3

Preparing for a New Construction Submetering Installation

I travel quite a bit for my job and it’s a rarity when I look out the cab window on my way to a client meeting that I don’t see dirt being moved. The construction market is hot for multifamily, university and affordable housing. While some markets are seeing a slight slowdown, particularly those heavily driven by the energy industry, most are still in boom mode.

Multifamily Executive still projects 2015 new construction to rise 76 percent above the historical average to 211,000 units. This would represent the highest level of new completions in a calendar year since the 1990’s. To put it in perspective, in 2012 new completions totaled just 79,000 units.

With so many projects and tight deadlines, submetering is often overlooked in the initial planning process – even in states that require submetering on new construction such as Texas, Georgia and California. Planning early not only saves time and money but headaches for your Project Management team.

If you are a contractor, your goal is to complete the project on time and on budget. If you are an owner or management company, your goal is to recover utility expenses that otherwise hit your bottom line. With rising water costs and shortages nationwide, water meters are becoming a standard fixture in new construction. One of the biggest pitfalls for not planning that impacts both parties is the costs involved when the plumber has to go back and installSubmetering Benefits tubes and couplings in each unit after he’s already completed the initial work.

Best Practices for a Seamless and Cost Effective Submetering Project

Plan Early
Don’t wait until the building is framed. The best case scenario is to include the request for submeters in the architectural plans. Also, make sure to identify which contract the submetering installation will be under – General Contractor, Mechanical Engineer or Plumber contract. You will then want to work closely with them to select the best meters for your project.

Choose Wisely
When selecting meters, make sure they are designed for horizontal installation. Work with your project team to insure sufficient room has been provided for the meter so read accuracy is not effected.  Another critical component is the AMR system. Always choose a non-proprietary AMR system to avoid technical and financial challenges as your system ages.

Central Boiler Systems
Are you installing a central boiler system? If yes, each unit must have a single entry point for both cold water and hot water with shut off valves. If you are not installing a central system, you will only need a single meter for each unit. Make sure the meter is easily accessible. Typically, next to or above the hot water tank is the best location for optimal performance.

If you are using gas to heat the boiler, make sure you meter everything so the owner can recapture gas costs associated with the water systems.

Valve Location
Valves must be in an accessible area. Preferably, valves are located outside the wall in an accessible area so the system can be maintained. If they are in the wall, access panels must be able to open. Otherwise, if valves are completely inaccessible, the building must be shut down to perform maintenance.

Tubes and Couplings
Don’t forget tubes and couplings need to be installed by a plumber during rough plumbing. These are sent by your submetering provider to the plumber or GC. It is their responsibility to install during rough in.

Timing is Everything
Do not put in a meter right before the plumber flushes out the lines. Lines get flushed when they are ready for their certificate of occupancy.

Hold the Phone
Make sure you have an Ethernet connection. Analog phone lines are being phased out and you don’t want to find yourself with an outdated connection.

Start Planning for Submetering Early in the Project
The sooner you plan, the better chances for a seamless installation. There is no financial benefit to having your plumber install a submeter versus your submetering provider. It is best to have your submetering provider manage the installation since they will need to install the transmitter and calibrate each meter to the appropriate transmitter. Properly commissioning the system to insure the transmitter is connected to the assigned unit is imperative to make sure the owner is billing the correct unit.

Be prepared to bring in reliable partners to help you select the highest quality and most cost effective submetering solution. They will also determine the best configuration for your building type. The payoff is well worth the effort – greatly increasing revenue and property value while also encouraging conservation.


Phil NePhil-Neeveseves
National Director of Multifamily Solutions
719.304.4111   pneeves@minolusa.com

Phil Neeves, a 20-year veteran of the submetering industry, is regarded as one of the leading industry experts in heating and cooling cost allocation systems.

Prior to joining Minol, Neeves served as Vice President of Central Region for ista North America. His experience includes 16 years in the submetering industry and 14 years as an owner/partner of a full-service real estate company specializing in syndicating multifamily apartment communities nationwide. Neeves extensive expertise in submetering and energy allocation has allowed him to successfully guide clients through utility metering conversions for both conventional financed and HUD insured properties. He served three years on the Board of Directors for the National Submetering and Utility Allocation Association (NSUAA) and is a Lifetime Member of the America’s Registry of Outstanding Professionals.