Working on a 48-unit complex in Knoxville on TVA's RSM rate schedule. The property has master metering with individual apartment sub-meters, but I'm struggling with how to fairly allocate common area consumption (hallway lighting, elevators, laundry room). Management company wants to spread it proportionally based on square footage, but I think that penalizes smaller units unfairly. What's the industry standard approach for this? Property uses about 180,000 kWh monthly total with roughly 25,000 kWh for common areas.
TVA master meter allocation - how do you handle common area usage?
Terry, I deal with this all the time here in Charlotte with Duke Energy properties. Most management companies I work with use a hybrid approach - base common area allocation on unit count (not square footage) plus a small adjustment for actual usage variance. So each unit gets charged 1/48th of common area costs, then any remaining variance gets spread proportionally. Keeps it simple and fair.
In Ohio we typically see a 60/40 split - 60% allocated equally per unit, 40% by square footage. FirstEnergy territories have some specific guidelines on this in their master meter tariffs. Check TVA's GSA-1 schedule, they might have similar language about allocation methods.
CPS Energy here in San Antonio requires proportional allocation based on unit size for master-metered properties. But honestly, equal allocation per unit makes more sense for things like hallway lighting and elevators - a studio apartment benefits just as much from those as a 2-bedroom. I'd push back on pure square footage allocation.
Here in Louisville with LG&E, I've seen properties get in trouble with tenants over unfair allocation methods. One complex was allocating 100% by square footage and the studio tenants were paying $85/month just for common area while 3-bedrooms paid $240. State housing authority got involved. Equal allocation plus usage variance is definitely the safer approach legally.
Thanks everyone. Derek, I like that hybrid approach - makes sense mathematically and should be easier to explain to tenants. Jack, good point about legal issues. I'll propose the 1/48th base allocation plus variance adjustment. The property management seems reasonable, so hopefully they'll go for it.
Up here in Seattle, we have some city ordinances that actually restrict how common area costs can be allocated in certain types of housing. Worth checking if Knoxville has similar tenant protection laws before finalizing your methodology.
David makes a good point about local ordinances. Also Terry, make sure you document whatever allocation method you choose clearly in the billing statements. Transparency goes a long way toward avoiding tenant complaints down the road.