Working with a 240-unit complex in Modesto that wants to transition from master metering to submetering. PG&E Schedule A-6 is costing them about $28,000 monthly, and they think submetering will reduce tenant usage. But California's submetering regs seem incredibly complex - AB 2531, SB 998, all these CPUC rules. Anyone have a roadmap for navigating this? The property manager is getting quotes from three different submetering companies and the requirements are all over the map.
PG&E submetering regulations - what am I missing?
Lewis, California submetering is a minefield. You need CPUC certification for the meters, specific tenant notification requirements, and the allocation method has to be approved upfront. I'd start with the CPUC's submetering guide from 2023 - it's actually pretty comprehensive once you wade through the legalese.
The biggest trap is the "no markup" rule - you can only charge tenants the actual PG&E rate, not a penny more. A lot of submetering companies will try to add administrative fees or "service charges" that violate CPUC regulations. Make sure any contract explicitly prohibits markups above the published tariff rates.
Thanks Alice and Clyde. I'm reading through the CPUC decision from December 2023 and it looks like they tightened the rules even more. Now there's a requirement for annual meter accuracy testing and specific dispute resolution procedures. This might not be worth it for a property this size.
Lewis, don't give up yet. The upfront compliance costs are steep, but the long-term savings can be substantial. I helped a Sacramento property reduce total usage by 23% after submetering installation. Tenants suddenly become very conservation-minded when they're paying their own bills directly.
California submetering is definitely complex, but it's doable with the right approach. Key things: 1) Use only CPUC-certified meters and vendors, 2) Get tenant consent in writing before installation, 3) Maintain detailed records of all costs and allocations, 4) Never charge more than the actual PG&E rate. The payback period is usually 2-3 years for properties over 100 units.
Randy, what about the common area allocation? PG&E Schedule A-6 includes lighting, elevators, laundry facilities, etc. How do compliant submetering systems handle those costs without violating the markup prohibitions?
Good question Lewis. Common areas must be separately metered and those costs allocated based on square footage or another reasonable method disclosed in tenant agreements. You cannot include common area costs in individual unit bills at above-cost rates. Most compliant systems use a separate line item for common area allocation at exactly the PG&E rate with no markup.
That makes sense. I'm leaning toward recommending they proceed but with a very reputable vendor who has CPUC experience. The potential savings of $6,000+ monthly probably justify the compliance headaches. Thanks for all the input.
Lewis, one more thing - make sure the vendor provides tenant education materials in multiple languages if needed. California requires disclosure documents in the same language as the rental agreement. I've seen projects delayed for months over translation issues.
Alice makes a great point about language requirements. Also budget for ongoing compliance costs - annual meter calibration, CPUC reporting, dispute handling staff time. These aren't huge expenses but they add up and need to be factored into your ROI calculations.