We've got a 24-unit apartment complex in Cleveland on Cleveland Electric Illuminating's Schedule GS-1 rate. The property manager is using square footage to allocate costs but tenants are claiming the formula is wrong. Three units on the north side get almost no sun and their electric heat usage is through the roof compared to south-facing units. Manager insists on sticking with sq ft allocation per the lease terms. Anyone dealt with similar tenant pushback on allocation methods? The total monthly bill runs about $3,800 in winter months.
CEI master meter allocation - tenant disputes getting nasty
Frank, I see this all the time with Duke Energy accounts here in Charlotte. Square footage allocation is legal but not always fair, especially with electric heat. Have you looked at the actual lease language? Some leases allow for "reasonable adjustments" based on usage patterns. You might suggest the property manager consider a hybrid approach - base allocation on sq ft but add adjustment factors for heating zones or sun exposure.
Derek's right about the hybrid approach. Down here in Louisville with LG&E, I've seen properties switch to degree-day adjustments for heating months. You take the base sq ft allocation but multiply by heating degree days for different zones of the building. North-facing units might get a 1.2x multiplier while south-facing get 0.9x. Takes more work but keeps tenants happier and reduces turnover.
In Connecticut we deal with this constantly on Eversource accounts. The key is documenting everything. Get temperature readings from different units if possible, document sun exposure, insulation differences, etc. I had one case where the property manager agreed to individual metering after seeing the data. Cost about $18,000 to retrofit but eliminated all the disputes.
Vince makes a good point about documentation. Here in Cincinnati with Duke Energy Ohio, I've found that showing actual temperature differential data really helps. You can get cheap wireless thermometers for under $30 each. Put them in problem units for a month and show the 8-10 degree differences. Hard for property managers to argue with that kind of data.
Good suggestions everyone. The property manager is finally willing to listen after two tenants threatened to move out. We're going to try the temperature monitoring approach Cecilia mentioned. The CEI bill breakdown shows demand charges eating up about 40% of the total cost, so the allocation really matters. I'll keep you posted on how it works out.
Frank, one more thing to watch for - make sure the property manager isn't marking up the utility costs beyond what's allowed by state law. Ohio has specific rules about residential utility markups. Some managers try to sneak in "administrative fees" that aren't permitted.
Derek's absolutely right about the markup rules. Ohio Revised Code 5321.17 limits what landlords can charge. I caught one property manager adding a 15% "service fee" on top of the actual utility costs. Had to get the tenant rights organization involved to straighten that out.