Submetering Specification Part 1: Understanding Your Goals

Submetering Specification Part 1: Understanding Your Goals

By: Allan Evora

Ensure you get the right submeter by first examining your objectives.

Submetering is an excellent way to transfer responsibility and associated costs for utility usage to individual processes. Unfortunately, many owners incorrectly specify their submeters, or choose an integrator who doesn’t take the time to specify the correct submeter that fits the customer’s unique needs.Submeter

Since there are so many different submeters and dozens and dozens of manufacturers, I go through a short but vigorous three-step Q&A process to ensure I specify the correct submeter for my customer.

My submeter selection is influenced by three parts, which I have outlined in this three-part series:

  1. Understanding Your Goals
  2. Installation
  3. Rate Structures

In part 1, we’ll review why it’s important to understand the precise goals and objectives of the owner or person who pays the building electric bill.

Understanding Your Goals

An owner might choose to install a submeter for the following reasons:

  • The owner may have multiple tenants in their building, and wish to allocate energy costs to tenants.
  • The owner is the only occupant in a building and just wants to understand and manage their own electric costs to ensure a more profitable business. Fact: according to EnergyStar, 30% of energy in commercial and industrial facilities is used inefficiently or unnecessarily!
  • The owner wishes to qualify for Energy Star, LEED, Green Globes, Standard 189P, Green Power Partnership, or related energy efficient building programs; qualify for tax incentives from the Energy Policy Act or Industrial Technologies Program; or comply with the Energy Independence and Security Act of 2007. These programs typically require you to track your energy and understand how you benchmark against similar facilities in your peer group.
  • The owner wants independent verification of their electric utility bill, also known as shadow metering. (Utility bill verification is a great risk management tool in large-use facilities and performance-based energy efficiency projects.)
  • The owner is experiencing electrical issues, such as sensitive electronic equipment resetting or getting damaged, and requires additional diagnostics to root-cause.


Why Do Your Goals Matter?

You might be wondering why your goals are relevant to submeter specification. Your goals tell me, as a control systems integrator, exactly what type of data you ultimately wish to see from your submeter.

I know that the owner who wants independent verification of their electric utility bill in a new construction environment needs a submeter as accurate and robust as possible (probably a revenue-class submeter such as a Veris E60, which runs at about $900 each.), whereas the new owner of an industrial facility looking to understand and manage their own electric costs probably doesn’t need as accurate of a submeter (probably a Dent PowerScout 3037 submeter, which runs at about $500 each.)


The Difference Between Tenant Billing and Cost Allocation

A quick note about goal #1. There’s a common misconception that tenant billing and cost allocation are one and the same. There’s actually a big legal difference between the two: Most states do not allow tenant billing for electricity, whereas cost allocation is widely accepted. I’ve found that most customers asking for submeters that allow tenant billing are actually looking for cost allocation.

Tenant billing:
Tenant billing means to measure electricity like a utility would, then charge your tenants. And it’s illegal in most states. Why? Electric utilities don’t want a non-utility reselling power, even if you bill your tenants at the exact same rate as the utility per KWh.

The main difference between tenant billing and cost allocation is this: the property manager or owner uses the submeters and applies a rate to bill the tenant.

If you’re looking to do tenant billing, keep these two things in mind.

1 - Your submeters need to be almost as accurate as what the utility uses to meter electricity usage. This means you need to ensure you get a revenue-class submeter.

2 - Tenant billing is most successful if identified in advance of building design. By designing each floor or space with a distribution panel(s) (and then further separating lighting, receptacle, and mechanical loads into their own panels), you make your life a lot easier. Retrofit tenant billing (repurposing existing buildings to house multiple tenants) can be extremely challenging and costly.

Cost allocation
Cost allocation, on the other hand, is legal in almost every state. Using cost allocation, the owner first looks at the utility bill, then divides costs based on square footage, energy assessment per tenant, percentage of total KWH used, etc. The key here is that the owner first looks at the bill, then uses it to determine a cost adjustment. You can still use metering to help you determine how much to charge each tenant, but ultimately the total cost allocated would never exceed your utility bill.

With cost allocation, submeters can be used to track consumption and demand by system, process, product, or whatever makes sense for the owner. Cost allocation gives you a lot more flexibility than tenant billing because you don’t need as accurate of submeters.

Cost allocation example

Here is a great example of cost allocation from one of our customers:

A building owner owns a two-story building in Charlotte, NC. The ground floor tenant is involved in educational investments. The second floor is occupied by a local marketing company. Every month, the owner charges two-thirds of the bill to the second floor.

Why? He allocates cost based on usage versus square footage.

Even though both companies technically occupy the same amount of space, the second floor has extended hours (6am-9pm M-S), and many more computers than the first floor, and ultimately use much more power than the ground floor.

Stay tuned for Submetering Specification Part 2: Installation and Submetering Specification Part 3: Rate Structures!


Allan-ShirtAllan D. Evora is a leading expert in control systems integration and president of Affinity Energy with over 20 years of industry experience working in every capacity of the power automation project life cycle. With a background at Boeing Company and General Electric, Allan made the decision to establish Affinity Energy in 2002. Allan is an alumnus of Syracuse University with a B.S. in Aerospace Engineering, graduate of the NC State Energy Management program, and qualified as a Certified Measurement & Verification Professional (CMVP).

Throughout his career, Allan has demonstrated his passion for providing solutions. In 1990, he developed FIRST (Fast InfraRed Signature Technique), a preliminary design software tool used to rapidly assess rotary craft infrared signatures. In 2008, Allan was the driving force behind the development of Affinity Energy's Utilitrend; a commercially available, cloud-based utility resource trending, tracking, and reporting software.

Allan has been instrumental on large scale integration projects for utilities, universities, airports, financial institutions, medical campus utility plants, and manufacturing corporations, and has worked with SCADA systems since the early ‘90s. A passion for data acquisition, specialty networks, and custom software drives him to incorporate openness, simplicity, and integrity into every design in which he is involved.