Got a 200-unit complex in Cleveland that's been master-metered since the 70s. FirstEnergy is billing the property management company under Rate GS-2, but they're allocating costs to tenants based on square footage instead of actual usage. Now I've got three different tenant groups threatening lawsuits because their bills jumped 40% this summer. The property owner claims they can allocate however they want per the lease agreements. Anyone dealt with similar situations in Ohio? The PSC regulations seem pretty vague on master-metered residential allocation methods.
FirstEnergy master meter billing - tenant disputes getting ugly
Frank, I've seen this exact scenario with TVA customers down here. The problem is most states don't have specific regs governing how master-metered properties allocate costs to tenants - it's treated as a landlord-tenant issue. But you might want to check if Ohio has any consumer protection statutes that require "reasonable" allocation methods. In Tennessee, we've had success arguing that square footage allocation violates reasonableness when there are obvious usage differences between units.
Had a similar case in Youngstown last year. The key is whether the lease specifies the allocation method. If it just says "proportional share of utilities" without defining the methodology, you might have grounds to challenge. Also check if they're including common area usage in the tenant allocations - that's usually where the biggest overcharges happen.
Frank, you need to get the actual FirstEnergy bills for the property and compare the total kWh to what they're billing tenants. I bet they're marking up the rate or including demand charges in the tenant allocations. LG&E has been cracking down on this practice here in Kentucky. Property managers can't charge tenants more than their actual proportional cost.
In North Carolina, Duke Energy actually offers submetering services now to help properties transition away from allocation-based billing. Might be worth asking FirstEnergy if they have similar programs. The upfront cost is significant but it eliminates all the allocation disputes.
Thanks everyone. Jack, you nailed it - they're including the demand charges in tenant bills but not disclosing it. The property is seeing peak demand of 180kW but allocating all of that cost based on square footage. Units with electric heat are getting screwed. Going to recommend they either install submeters or switch to a usage-plus-demand allocation formula.
Frank, make sure you document everything for the PSC complaint if it comes to that. Eversource up here in Connecticut had to refund $2.3 million to master-metered customers last year for similar allocation issues. The key was proving the allocation method resulted in some tenants paying more than they would under direct utility service.
Final update - property management agreed to install submeters after we threatened to file with the Ohio Consumers' Counsel. FirstEnergy is crediting back $18,000 in overcharges from the past year. Sometimes you just need to show them the math.