Submetering for Savings What You Need to Know

It’s a beautiful Friday night and you’re out to dinner with four of your best buddies. The restaurant's ambiance is exquisite and the food is divine. You’re on a budget, so you stick to ordering a delicious appetizer and some tasty soup, while your friends go all out on surf and turf, quaff glasses of the restaurant’s best champagne and devour decadent desserts. The fun and laughter lasts for hours. You’ve had the time of your life—but when the check comes, your friends insist upon dividing it equally among the five of you, despite the fact that your meal cost only a fraction of theirs. Sighing, you hand over your credit card, feeling distinctly taken-advantage-of.

Hopefully you don't have friends who would pull a stunt like that at a restaurant, or anywhere else. If you're a resident of a multifamily building where you don’t have direct billing for your utilities however, this scenario is an everyday occurrence. Regardless of what you personally consume, you're picking up the tab for your neighbor’s water, gas and electric use. Unless you have submetered utilities, that is.

Breaking Up is Hard to Do

“With standard billing, residents get billed for their utilities in their monthly fees,” says Orrin Laferte, owner of FewTek Inc., a water meter management and billing company in Dunedin. “Once a year, the owner or association tries to determine what their water and sewer costs are going to be for the next year, and they add it in to the fees. The problem is, if you use a little water you pay the same as a resident who uses a lot. People who live in Florida only half the year pay the same as those who live here the entire year. By putting meters in, residents just pay for what they use—not an average of what everyone else uses.”

Submetering was created back in the 1920s but didn’t really become a concept of much concern to the property management industry until the 1980s when energy costs and conservation raised the consciousness of property owners.

“Submetering has become a more popular option in the recent years because the price of water has gone up,” says Robert Nelton, a senior public relations specialist for the Palm Beach County Water Utilities Department in West Palm Beach. “Back in the day it was a negligible expense, so it just became part of the rent—say $15 or $20 per month for water—so six people living in a three-bedroom apartment who are taking a lot of showers and doing a lot of laundry were getting off pretty easy. But a single person who uses a moderate amount was paying the difference.” Kind of like the dining companions who foist part of the bill for their sirloin onto a salad-eating friend.

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