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Question of the Month: Compliance/opportunity: What is submetering and what does it mean for your business? – by Gord Echlin

May 17th, 2016 Posted in New York City 1 Comment
Gord Echlin, Triacta Power Solutions

Gord Echlin, Triacta Power Solutions

New Yorkers spend about $22 billion a year on electricity, according to the U.S. Energy Information Administration. Not surprisingly, state and municipal governments continue their efforts to raise citizens’ awareness of electricity consumption, promote conservation efforts, and reduce overall demand.

With New York City’s groundbreaking Local Law 88 (LL88) on the books, the energy industry is watching closely to see what the impact will be. Local Law 88 requires all commercial buildings larger than 50,000 s/f o install submeters by January 1, 2025. LL88 is part of the larger Greener, Greater Buildings Plan (GGBP) initiative, which targets energy efficiency in large existing buildings in New York City. New York City is one of the first cities in the United States to require submetering.

On the residential side of the equation, the New York Public Service Commission (NYPSC) has instituted strict requirements to govern residential electrical submetering in the state. The rules affect how submeterers (building owners, property management companies, or third-party energy resellers) bill for electricity use and provide protection to residents. Several requirements relate to the process a submeterer must follow prior to providing submetered electricity, while others apply to the submetering technology itself.

What is submetering?

Many commercial and residential buildings in New York use a single “master meter.” Electricity comes into a building through a meter at bulk rate prices and landlords bill tenants for electricity based on flat fees or formulas derived from how much of the building they occupy. Occupants pay for electricity as part of a monthly bill, but energy use is not itemized. Paying a set price for energy use no matter how much is consumed is a disincentive for energy conservation and punishes those who do make the effort to use less. 

Countless stories exist about tenants leaving lights, air conditioners or machinery on all day — even when space in unoccupied. They pay no extra fee for this luxury so have no real incentive to change their behavior. An equal number of anecdotes exist, however, that show significant drops in energy consumption and large cost savings when submeters are installed and tenants are empowered to monitor their energy use.

A property using submeters still has electricity metered by the utility through a master meter, but each designated area’s consumption is measured through individual property-owned submeters. Submeters allow for the granular measurement of energy use, right down to the individual circuit level. By installing submeters, building owners and managers can pinpoint energy use, identify failing equipment, and allocate cost fairly.

The Impact

When tenants pay directly for their energy use, overall building consumption drops on average by 20% — with many tenants experience between 30 and 60% decreases in their energy bills. That’s an impressive savings that’s comparable to installing an entire building automation system or changing all the windows in an office tower — at a fraction of the cost. Put another way, for every 5 buildings that are submetered, an entirely new building can be powered from the savings alone.

According to the New York State Energy Research and Development Authority (NYSERDA), submetered buildings in New York had an annual savings of between 10-26% of total electric consumption in their first year — and that the savings where sustainable over time. The National Science and Technology Council Committee on Technology reports similar success with estimated savings of 18–26 percent through submetering.

Moving Forward

With today’s modern IP-based submetering systems, individual tenant metering can be completed at low cost, reducing a building’s energy use and increasing its long-term value. Modern submetering systems promise to turn properties into intelligent buildings — bridging the energy information gap by easily connecting with building automation systems and IT-based financial and energy management systems, and making consumption data visible to all stakeholders. Individual tenants are empowered to monitor and reduce their energy consumption and building operators and managers have the information they need to make smart operational decisions.

Gord Echlin is the vice president of  sales and marketing at Triacta Power Solutions, LP, Ontario, Canada.

1 Comment

  1. Penny Boileau   |   Jun 29, 2016

    Does Hydro have the ability to read the triac meter and then bill a tenant accordingly.

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Adam is the publisher of the monthly New York City section and has been with the New York Real Estate Journal since 2015. Adam, of Weymouth, attended Northeastern University.