national multiple family submetering and allocation billing program ...

eference to conservation gains that could be garnered across property types including the multifamily
property sector by mandatory conservation measures. The Public Utility Regulatory Act
of 1978 directed that states restrict the use of master metering (that is, one meter for the entire
apartment property) to cases where the owner could demonstrate that the costs of individually
metering apartments exceeded the lifetime cost savings from reduced electricity usage from
individual metering (16 U.S.C. 2623).
In recent years the potential water savings that could be achieved through submetering
and allocation billing has attracted the interest of water planners and conservationists.
Population growth has placed heightened pressure on water supplies, increasing the need for
effective water conservation measures. It is generally acknowledged that consumers are more
discretionary with their water use when there is a direct correlation between water consumption
and cost. Submetering provides a direct relationship between the two. Metering and then billing
customers for the amount of water they actually use has been shown to be an effective
conservation tool in the single-family residential sector (Porges 1957, Hanke and Flack 1968,
Flechas 1980). The savings attributed to billing allocation methods in multi-family housing have
been less conclusive. The premise of these systems is that the price signal provided by an
individual bill could help consumers to undertake water-conserving behavior in their own
interest while meeting collective water conservation goals. The feedback mechanism of a bill
has been shown to be important in reducing electricity demand, especially when feedback is
immediate (Seligman and Darley 1977). The extent to which a similar feedback mechanism
impacts water use continues to be tested and debated.
Improvements in metering technology and the development of third party billing service
companies have facilitated the growth of separate billing in the multi-family sector. Technical
advancements in water meters have made them less expensive, smaller, and remotely readable.
These improvements have made installation payback periods more reasonable, especially if
meters are installed during initial building construction. Alternatively, allocation billing methods
are viable options when submetering is deemed too expensive or technically infeasible, a typical
problem in older buildings. In addition, the third-party billing industry has been evolving with
the help of entrepreneurial companies that market, install, and maintain these billing systems for
property owners.
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