A restaurant in Toronto recently introduced an unusual concept: instead of issuing separate cheques for each table, the manager tallied the sales for the night, divided the total by the number of tables and issued each party a bill. With the cost spread out evenly, tables of four would pay as much as tables of six and those who ordered tap water paid the same as those who had drinks. Very soon, more diners opted for the expensive items on the menu; the bar got busier and steak sales spiked as the hamburger cook sat idly by. In the end, everybody paid a lot more.
While it sounds like a failed experiment or an April Fools’ gag, it is not unlike the “bulk billing” model used to distribute energy in multi-residential buildings in Canada, with the total cost pooled together and built into the rent or the condo fee. In Ontario, the system is responsible for inflated rates of consumption and a shocking discrepancy between heavy users of energy and everybody else. In a typical condominium building between 200 and 400 units, a heavy user consumes 70 per cent more electricity than an average user and 180 per cent more than a low user.
The good news for property owners and condo boards is that sub-metering, the technology used to monitor the energy use of individual units, is more advanced and affordable than ever. Sub-metering ensures each unit pays only for the amount of energy used, creating a fair system that residents can feel good about.
“Sub-metering allows property owners and condo boards to run buildings as efficiently as possible, stabilizing budgets, reducing operating expenses and saving residents money,” says Ross Garland, Senior Vice President and General Manager for EnerCare Connections, the leading sub-metering program in Canada. “Switching to sub-metered systems provides an excellent opportunity to convert existing assets to high performance buildings.”
Flexibility, savings and a financial incentive
Sub-metering hands over control of the energy bill to the consumer, creating a direct financial incentive to reduce consumption and leading to economic and environmental benefits. According to a recent study, residents in buildings that are sub-metered use between 27 and 34 per cent less energy month-over-month.
For rental buildings, sub-metering improves flexibility because it shifts residential electricity costs to the end-user. With a typical 60-40 split between in-suite use and common area use, the savings are significant and immediate.
“Switching to sub-metered systems has provided cash flow stability and has been transformative in the way that residents consume energy,” said David Chalmers, VP Asset Management, Starlight Investments. “Costs to operate our buildings have been reduced and tenants are happy because they know that somebody else’s energy consumption is no longer potentially built into their rent. Sub-metering also contributes to reducing the carbon footprint of our portfolio.”
For condos, sub-metering strengthens reserve funds and lowers monthly maintenance costs, increasing the value and marketability of units. Empowering residents to control usage will yield benefits in the near future—the cost of electricity is expected to rise by 20 per cent over the next two years.
Switching to a turnkey sub-metering solution with EnerCare Connections requires no capital costs. Property owners and managers deal with a single point of contact—from installation to billing and customer service—and residents benefit from a low monthly administration fee, and charges tied to their own consumption.
Conservation and the environment
Reducing energy consumption through sub-metering has the potential to enhance air quality and benefit the environment. A recent study commissioned by EnerCare found that deployment of a sub-metering regime across Ontario would save 3.3 terawatt hours each year—nearly equivalent to the energy found in 2 million barrels of oil. Annual CO2 emissions would decline by 1.2 million metric tons and over 20 years, environmentally-conscious Ontarians would avoid $3.1 billion in economic costs.
EnerCare has made resources available for building owners and condo boards to communicate with residents as they seek to shift to a sub-metered system. Despite the financial and economic benefits associated with sub-metering it is not uncommon for residents to have questions about a new system.
“At EnerCare, we believe that clear communication with residents is essential to managing change,” says Garland. “It is important to equip building owners and condo boards with the information they need to answer questions about sub-metering from residents. EnerCare’s depth of experience, transparency and great customer service go a long way in making residents comfortable with the service.”
For more information on sub-metering, visit www.enercare.ca