California Senate Bill 7 (SB 7) was signed into law by Gov. Jerry Brown, and goes into effect January 1, 2018. Properties that request a water connection from a water utility after that date must demonstrate that the property’s units are submetered to measure water consumption.
Additionally, multifamily operators must include specific language in their lease disclosures for water and sewer billing.
In September 2013, the Columbus Post-Dispatch ran a series of articles about multifamily owners and operators who were marking up the rates that they charged their residents for electric service and allocating more than their expense to residents. Subsequently, legislators introduced three separate bills in 2014 to regulate submetering companies, but none of these bills made it past committee.
In 2016, the legislature introduced two new bills to regulate utility billing by landlords for residents. As in 2014, these bills did not make it out of committee. Apartment associations and billing vendors attempted to jointly craft language with the Office of Consumer Counsel to address recovery and consumer protection interests. These efforts did not produce a bill that could advance in 2016. At the end of 2016, the Public Utilities Commission of Ohio announced that they were opening a generic investigation into submetering which includes multifamily operators that are recapturing only their utility expense, and multifamily operators that mark-up rates and allocate to residents more than their utility expense.
It’s likely that more than one bill will be introduced this year. Apartment associations and apartment billing partners are introducing language that will allow owners with submetering and RUBS, (Ratio Utility Billing Systems) to recover revenue equal to the amount the property was charged by the utility, plus reasonable administrative fees. Important to note, these groups are not working with the Office of Consumer Counsel in 2017.
In 2011, the New Jersey Board of Public Utilities (BPU) ended its ban on submetering in residential properties in BPU-regulated areas for newly constructed properties. Over the five years since the ban was lifted, BPU and the water utilities it regulates found that submetering benefits utilities, customers, and the State of New Jersey. They will now seek to expand the ability to submeter properties constructed prior to 2011. BPU’s preference is for residents to monitor their consumption and directly modify consumption habits based on price signals.
BPU approached the New Jersey Apartment Association (NJAA) for data on existing submetered properties and known conservation benefits. BPU plans on instituting a rule allowing for the expansion of submetering after review of data and internal discussions. NJAA and utility billing service providers are assisting in the data gathering and will participate in any rulemaking or legislative process.
Michael Foote is Vice President, Legal/Utility Billing Compliance at RealPage. Mike joined the RealPage legal team through the 2016 acquisition of NWP Services Corporation, where he had been the Director of Regulatory Services, having joined NWP in 2008. Mike’s expertise in utility billing law has been gained over his more than 17 years exclusively practicing in this area.