Between permits, inspections, suppliers, vendors and contractors, some details may fall by the wayside during a new building development. However, one detail that shouldn’t be overlooked is how utilities are allocated among residents, especially for buildings that are a mix of residential and commercial occupants. It may seem like an aspect that can be worked out any time during the building process, but planning relevant utility details in advance should be a major consideration from the start of a building development to avoid potential headaches down the road.
For mixed-use residential buildings, sub-metering is key to fair allocation of energy costs among residents and commercial units. For example, the energy footprint of a restaurant is drastically different than a retail store or a residential unit with two occupants. Without sub-metering, property managers are left to estimate utility costs and bundle them into the cost of rent or maintenance, resulting in an imperfect allocation of energy costs. Sub-metering addresses this problem as it allows for utility consumption to be measured based on actual usage by particular occupants, as opposed to estimated usage based on measurements from a bulk meter for the entire building. However, to successfully implement sub-metering into your building development, there are many design, legal and commercial challenges that should be considered sooner rather than later.
The ability to allocate and bill utility costs to specific areas of a building is something that requires planning based on the unique project. One benefit of initiating sub-metering design during the planning phases of the build is that a developer has the option to allocate costs right down to a plug in the wall. In contrast, if that same developer waits and involves a sub-metering provider after the electrical system is completed, he or she can only sub-meter the existing circuits. A retrofit does not allow for significant changes, additions or concessions.
While a new building development has no shortage of third parties that are involved in every aspect of the project, it’s important during the initial stage to have your electrical engineers work closely with sub-metering designers that are trusted and have experience specific to your project. These electrical engineers and sub-metering designers will be in a position to plan for base building drawing integration, which is essentially a guide to knowing where all meters are or should be placed throughout the project. Given that one building could house residents, retail, public facilities and shared amenities, it is important to establish these details as soon as possible.
With a resurgence of people making the decision to sacrifice square footage to experience life in urban centers, mixed-use developments provide people an opportunity to live and work in neighborhoods that previously would have been designated as purely residential in the past. Because a mixed-use development will involve multiple stakeholders, it’s important to have legal documents and agreements in place in the event of any unraveling of an agreed upon arrangement. This will also help to clearly outline how the sub-metering program and allocations work, eliminating most potential surprises related to energy consumption down the road.
For the shared spaces or common areas of a building project, we also recommend developing and disclosing a shared facilities agreement that considers and formalizes utility allocation arrangements for shared spaces and common areas. This shared facilities agreement should clearly outline the allocation methodology and how rates are established. If you’re operating a condominium, make sure to reference shared agreements in the condominium’s incorporation documents as well.
The choices you make during sub-metering installation will impact your business and future property managers. It’s important to choose an organization you trust as a sub-metering partner, since their services go beyond the installation phase. Complex metering and billing arrangements require active and ongoing management by your sub-metering service provider to ensure reliable service for all parties involved.
Communication is key to making sure your sub-metering installation runs smoothly now and in the future. All details should be clearly explained to stakeholders, particularly condominium boards. Invest in proper design and legal documentation, as it is very helpful in articulating program dynamics. With that said, education is key. For this reason, we recommend developers include the rationale behind the sharing/allocation formulas as well.
For developers, your job isn’t done once the building is finished. To maintain a positive reputation for your brand, it’s important to regularly communicate with property management to ensure a seamless transition and quality of service for the building occupants. This also can help to develop a close working relationship between the property management and the sub-metering service provider. This relationship is important since in the future they will be the ones addressing stakeholder questions and issues.
While it’s recommended to build sub-metering installation into your building design plans, it’s never too late to make the switch. Retrofitting a building for sub-metering can be done, but it does present some unique challenges you otherwise wouldn’t encounter with a new construction project. When you engage a sub-metering design expert for a retrofit, the first thing you’ll need to do is discuss feasibility of installations with regard to space, capacity and other similar considerations. This will determine what type of sub-metering allocation your building will allow.
Another challenge around retrofit projects, is that the costs for retrofitting usually end up being higher and labor more extensive than new build installations for sub-metering in a mixed-use development. You’ll also need to account for transitioning over existing billing allocation models to the new sub-metering model, incurring additional administrative costs. Due to additional construction work, which may include tearing down and reconstructing walls, there may be an impact to normal building operations during installation. You’ll need to minimize the disruption of construction for building occupants, creating additional planning work for you. So while it is worth it to switch over from bulk metering to sub-metering in the long run, retrofitting creates extra work that could have been avoided by addressing sub-metering installation during the building development phase.
Remember, sub-metering installation should be considered during the early planning stages of a new building development before you break ground. Developers, consultants, contractors, property managers, condominium corporations all need to be actively involved to smoothly implement sub-metering in your building.
Kevin Neild is Director of Revenue Assurance & Customer Care Operations at EnerCare Connections Inc. For more info visit www.enercareinc.com