Alberta program will defer utility bills scheduled for payment before June 18

Better manage utilities in multi-res buildings

Sub-metering increasingly relevant with mixed-use communities on the rise
Wednesday, July 12, 2017
By Kevin Neild

As people continue to flock toward big cities for work, mixed-use multi-unit residential buildings (MURBs) present the perfect living solution for urban centres. Containing both residential and commercial spaces, such as shops, offices and restaurants, they create a mini community in which their residents can live, work and play.

City planners love mixed-use MURBs, since they help contribute to the walkable neighbourhoods that planners strive to create in urban markets. Mixed-use developments also have helped make better use of a city’s existing infrastructure, since purely residential neighbourhoods are mostly vacant during work hours, resulting in underutilized city infrastructure. Developers also favour mixed-use residential buildings, since they allow for a more efficient use of land and reduce long-term maintenance costs by distributing them between various tenants.

Multi-residential buildings, unfortunately, are less energy efficient than single-detached homes, consuming 292 equivalent kilowatt hours per square metre compared to 258 equivalent kilowatt hours per square metre, according to Canada Mortgage Housing Corporation (CMHC). With the volatility of utility costs, it’s an area more people are looking at and asking, “How can I better manage my utilities?”

A restaurant has very different utility needs than a retailer or a residential unit. Rather than bulk metering, which measures the energy consumption of the entire building and estimates fair distribution among residents, sub-metering permits more accurate allocation of energy costs by allowing for a more specific allocation of utility consumption between units and shared areas.

To allocate utility costs, sub-metering breaks out spaces into two types of facilities. First, there are dedicated facilities that a specific group of people use as they wish, such as residential units, commercial spaces and retail shops. Second, there are shared facilities, consisting of areas, amenities and services that people from the entire building use, such as exterior lighting, parking garages, lobbies and corridors, elevators, gardens and water features.

There are two types of sub-metering design for mixed-use buildings: scattered and branched. The main difference between the two designs is whether the electrical loads (lighting panels, elevators, etc.) and mechanical loads (plumbing, boilers, etc.) are grouped physically and functionally based on the units they serve (residential, commercial, hotel, etc.). A scattered design sounds exactly like its name. The loads are not grouped together based on the unit they serve, and require many sub-meters that need to be aggregated to allocate bulk utility usage per unit. A branched design uses fewer meters, grouping them together physically and functionally based on the unit they serve, making it easier to allocate bulk utility usage per unit.

The more efficient of the two designs is the branched system, which uses fewer meters, and allows for a more straightforward billing agreement. Scattered designs are usually deployed when there needs to be an accommodation to already completed electrical systems, making sub-metering more complicated and costly. One thing to consider is that a branched design requires advanced planning. Therefore, best practice is to get an experienced sub-metering provider involved as early as possible to find and integrate efficiencies in a MURB’s sub-metering design.

In areas where sub-metering is not implemented in a mixed-use building, either due to cost constraints or design complexities, other cost allocation methods for shared spaces would be employed. Utility allocation in these instances can be derived by square footage, anticipated usage, defined percentages or a combination of these methodologies. Regardless of the decision that is made, it must be justifiable and easy to explain, since all stakeholders need to be in agreement about how utilities costs for shared spaces will be divided among occupants. Demonstrating accuracy to all stakeholders is integral to maintaining the credibility of the sub-metering program.

In addition to more accurate utility allocation, sub-metering has other benefits, such as a positive impact on the environment. Sub-metering promotes energy efficiency, contributing to certifications such as LEED and Toronto Green Standard, which is an attractive selling point to all stakeholders. In addition, tracking energy consumption trends promotes energy literacy and empowers consumers to take ownership over their own energy consumption. In fact, it’s been found that consumption increases for suites that aren’t sub-metered and billed individually, with residents using 12 per cent more electricity and 15 per cent more water, according to CMHC.

Business operations also benefit from sub-metering. Sub-metering increases transparency, accountability and fairness for all mixed-use development entities. It allows seamless allocation of utilities bills, which reduces the administrative burden on property managers. In addition, with bulk billing, a single entity typically takes on the financial burden of monthly invoices of greater than $100,000.

Sub-metering can help reduce utility costs, which make up a large chunk of operating costs. Sub-metering also makes suites more desirable by helping to lower maintenance fees.

Looking ahead, it’s important to consider creating efficiencies — not only in how cities and buildings are planned, but also in how these communities are powered. In the effort to create communities that serve multiple needs, by accurately accounting for energy usage, sub-metering can help contribute to more environmentally responsible citizens and more sustainable cities.

Kevin Neild leads customer operations at Enercare. He has 20-plus years of experience in the retail energy, telecommunications and mining industries. He also holds both an MBA and CPA designation.

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