Got an interesting situation here in Memphis with a 48-unit apartment complex on MLGW's Schedule GSL rate. The city building inspector is saying new construction standards require individual metering for each unit, but this property was built in 2019 under the old rules with master metering. Property owner is looking at $65,000 to retrofit individual meters vs continuing with the current allocation system. Monthly MLGW bill runs about $4,800 in summer with those Memphis heat waves. Anyone dealt with similar retrofit requirements from local municipalities?
MLGW apartment complex billing - city wants individual meters
Randy, that's a tough one. Here in Oregon we've seen some cities push individual metering for new construction but usually grandfather existing properties. Check if Memphis has any variance provisions or phase-in periods. The $65K retrofit cost might be worth it long-term if it eliminates allocation disputes and reduces management headaches. What's the property's annual utility cost - around $50K?
Duane's math sounds right on the annual costs. In Kentucky I've seen similar retrofit situations where the payback period was 3-4 years when you factor in reduced administrative costs and eliminated tenant disputes. The key question is whether Memphis is requiring this retroactively or just for future construction. If it's retroactive, the property owner might have grounds to challenge the requirement.
The annual MLGW bill is running about $52,000, so Duane's estimate is spot on. From what I can tell, the city requirement applies to properties undergoing major renovations, and this complex is planning a $200K HVAC upgrade next year. That might be triggering the individual metering requirement. Property manager is worried about the allocation disputes too - they've had three tenant complaints this year about summer cooling costs.
Randy, if they're already doing a major HVAC renovation, the individual metering retrofit might make more sense financially. You can coordinate the electrical work and reduce overall labor costs. Plus, newer HVAC systems with individual control will benefit from individual metering - tenants will actually see the cost impact of their temperature settings. Have you looked into MLGW's commercial rebate programs for the meters?
Beatrice makes an excellent point about coordinating with the HVAC work. MLGW does have some rebates available - up to $150 per meter for qualifying efficiency improvements. With 48 units that could offset $7,200 of the retrofit cost. I'm going to recommend the property owner bite the bullet and do the individual metering. Long-term it'll solve a lot of problems and probably increase property value too.