The UMCA community serves the multifamily and commercial real estate industry specific to resource conservation, metering, and utility management. The overall Mission and utility allocation industry focuses on issues that may affect utility services for customers.
Our members include manufacturers, service providers, property owners, and managers with an interest in promoting a 'Green Lifestyle' of conservation and accountability. The UMCA focuses specifically on submetering and allocation billing methods in an effort to promote conservation while helping reduce costs through accountability. The UMCA offers members a unique set of membership services that include principles and best practices for managing your metering, conservation, and utility management programs.
To promote increased conversation and cost management of utilities within the multifamily housing industry. This will be accomplished by educating the industry on best practices, latest technology, and regulations relative to utility cost recovery.
Where structurally practical and economically feasible, submetering is the preferred method of utility cost allocation.
RUBS is an acceptable alternative to submetering when the economic cost of submetering, or the risks associated with installing submeters, outweighs the benefits. When deploying any utility cost recovery methodology, the UMCA supports the use of techniques and technologies that best represent the actual consumption of a utility by the multifamily resident or commercial resident, within these constraints.
When it comes to utility metering, multifamily properties are generally either:
Direct metered: one meter per utility type per residential unit with each meter connected directly to the utility provider and usage charges billed directly to the resident by the provider.
Master metered: one meter per utility type per building or property with utility charges billed to the owner by the utility provider.
Direct metering is the optimal solution for energy conservation and billing efficiency because utilities are billed to, managed by and paid by each resident. However, direct metering individual residences can be cost-prohibitive in new construction, and retrofits may be cost-prohibitive and/or unworkable in older properties and multi-story buildings.
In master metered environments, owners have two options for allocating utility usage:
Submetering : individual meters per residential unit installed behind the master meter and monitored by the owners rather than the utility provider.
RUBS : allocating master metered utility charges proportionately based on the number of occupants per unit, square footage or other factors.
In submetered environments – which should always be disclosed in lease terms – a property owner receives a bill for each utility type for all usage – the aggregate of all individual units and common areas – as measured by each master meter. The owner, which in many cases is supported by third-party utility billing provider, will make a monthly reading of each of the property’s submeters and calculate a usage cost using the same rate the utility used to calculate the owner’s master meter bill (common area utilities are metered separately and allocated to residents only in jurisdictions where it is expressly permitted by law and disclosed in lease language). A single monthly statement combining rent, itemized utility usage and other applicable fees is then delivered to the resident for payment. Similar to direct metering, submetering – an excellent solution for billing efficiency and energy conservation – may be cost prohibitive in new construction, and retrofitting in older properties may not be possible.
RUBS – which should also be disclosed in lease terms – is used to allocate utility charges in a master metered environment when submetering is not practicable. When using a RUBS allocation method, most jurisdictions require the use of common area deduction, which is a specific percentage for pools, irrigation, and laundry rooms, before determining usage. As in submetered environments, individual usage cost is determined using the same rate the utility used to calculate the owner’s master meter bill.
based on square footage.
based on occupancy.
based on 50/50 split between square footage and occupancy
the following examples are all based on a four-unit, 8,000 square foot building dividing a $500 master-metered utility bill (some of the tables may include very slight rounding corrections)
The characteristics of the building and its resident makeup are as follows in Table 1:
|Apartment #||Square Feet||Bedrooms||Occupants|
Square Footage Allocation
|Apartment #|| Common Area
|Square Feet|| Square Footage
|101||$500 - $100 = $400||1,500||1500/1800=.1875||$400x.1875 = $75|
|102||$500 - $100 = $400||1,500||1500/1800=.1875||$400x.1875 = $75|
|103||$500 - $100 = $400||2,500||2500/8000= .3125||$400x.3125= $125|
|104||$500 - $100 = $400||2,500||2500/8000= .3125||$400x.3125= $125|
|Apartment #|| Common Area
|101||$500-$100 = $400||1||1/9 = .1111||$400x.1111 = $44.44|
|102||$500 - $100 = $400||2||2/9 = .2222||$400 x .2222 = $88.89|
|103||$500 - $100 = $400||2||2/9 = .2222||$400 x .2222 = $88.89|
|104||$500 - $100 = $400||4||4/9 = .4444||$400 x .4444 = $177.78|
50/50 Square Footage and Occupancy
|Apartment #|| 50% Square
|50% Occupancy||Bill Allocation|
|101||$75x.50 = $37.50||$44.44x.50 = $22.22||$37.50+$22.22 = 59.72|
|102||$75x.50 = $37.50||$88.89x.50 = $44.45||$37.50+$44.45 = $81.95|
|103||$125x.50 = $62.50||$88.89x.50 = $44.45||$62.50+44.45 = $106.94|
|104||$125x.50 = $62.50||$177.78x.50 = $88.89||$62.50+88.89 = 151.39|
In addition to these methodologies, RUBS allocations can also be determined using other factors:
The UMCA has developed a set of best practices, which guide the use of RUBS:
In general, to determine the end-user’s utility costs, calculations should include one of the following factors:
(i) Actual occupancy,
(ii) Ratio occupancy factor,
(iii) Occupant bedroom factor,
(iv) 50/50 square footage and occupancy, or
(v) Cold water capture, hot water allocation.
When using a RUBS allocation method, there should be a specific percentage deduction for common areas, including pools, irrigation, and laundry rooms (if not directly metered), from the total utility cost before calculating resident allocation. The total amount billed to residents must not exceed the total amount billed by the provider.
RUBS and the specific billing methodology used should be fully disclosed and explained in the lease. Any changes pertaining to utility charges in the lease agreement should be signed in an addendum or pursuant to the original lease language.
Residents should be given sufficient written notice in accordance with the lease when changing to a RUBS billing method. Full details and details any associated fees should be disclosed in the notice.
The Multi-Family Resident Utility Billing Regulatory Environment & Legislative Intent
The regulatory environment around multi-family resident utility billing is highly fragmented. Federal laws – administered primarily by the Environmental Protection Agency – generally govern water quality issues, but do not extend to utility billing practices such as RUBS and submetering. According to the National Conference of State Legislatures, 22 states and Washington, D.C. have statutes, regulations or rulings on submetering and/or RUBS extending across one or more utility types. Additionally, there are many county/municipal ordinances that regulate multi-family utility billing in one way or another. In many cases, whether at the state or municipal level, there are separate requirements for water, electricity and natural gas. Water-related laws tend to be more restrictive and reflect drought conditions, such as in California. Accordingly, with respect to water, there is a regulatory bias toward submetering versus RUBS. However, in some states, such as Florida, the electric utility environment is more restrictive.
Conservation of resources - water, electricity, gas.
Consumer Protection – to ensure that residents are charged fairly for their utility consumption and prohibiting property owners from profiting from providing utilities, e.g., not charging residents more for utilities than what the property was charged by the utility. Many laws also require disclosure of utility billing methodologies – RUBS (including specific billing methodology) and submetering – in resident lease agreements.
Some of the laws, contain requirements and/or prohibitions around direct metering, submetering or RUBS.
One apartment unit would save an average of 18 gallons per day.
Over the course of one year, one apartment unit would save 6,570 gallons of water per year.
For a typical 250-unit apartment building, annual savings would be 1,642,500 gallons of water per year.