Sub-Metering – The Masaryktown Experience

   “Frustrating, but worth it.”  That’s how Sylva Calkova, Manager of Masaryktown Non-Profit Residences Inc., describes both the process of converting to sub-metering (also known as separate metering) and the day-to-day reality of tenants paying their own electric bills.

   Masaryktown’s 112 units on Scarborough Golf Club Road all have electric heating and in-suite air conditioning.  In the first year after the conversion to sub-metering, electricity consumption decreased around 25% and the shift in responsibility saved the corporation approximately $100,000. The road to get to this point was a long one, however.

   Back in the early ‘90s, when the building was still young, the Masaryktown Board of Directors and manager began looking at alternatives to electric heating.  As a start, the hot water tanks were converted from hydro to natural gas.  But the corporation eventually decided that it was too costly and intrusive to convert the individual unit heating to gas.

   Next they began looking at separate metering as a way to deal with their increasing costs and consumption.  The corporation contacted what was then Scarborough Hydro and Toronto Hydro, but neither was interested in participating.

  In 2000, the manager came across a joint press release from Ontario Hydro Energy and the Stratacon Group.  These organizations had forged a sub-metering alliance in the multi-residential sector.

  This was the answer Masaryktown’s Board and management had been looking for.

   After Stratacon provided a study of the technical aspects and the savings possibilities, the Board of Directors decided to proceed.  A contract was signed and in March 2001 the first bills were issued to the tenants.

   Although the actual installation took approximately six weeks, there was a delay caused by an external source.  According to Peter Mills, Chief Operating Officer of Stratacon, today strategies are in place to avoid delays so the installation can happen quicker.

   The sub-meters themselves reside in electrical closets and send the data to Stratacon via a phone line.  This allows Stratacon to read the meters without coming on-site.  This on-line facility also permits Masaryktown and the tenants to view consumption figures on-line. Stratacon handles the billing and collection, and sends monthly reports to Masaryktown.

   So Masaryktown’s board loved it, but how did the tenants react?  As can be expected, many tenants were unhappy at first to have to pay their own hydro bills.  Ms. Calkova explained that a couple of meetings were held with the tenants during the conversion to explain the process.

   Market rent levels were decreased to account for an average consumption figure.  RGI tenants no longer paid the utility charge but were instead provided with the utility allowance, as outlined in the Social Housing Reform Act (SHRA, 2000).  In many cases these changes made up the costs resulting from the shift.  But, not in all cases.  For some, a change in lifestyle was needed.

Here’s how the billing process works

1. Masaryktown receives a bulk bill from Toronto Hydro.  

2. Stratacon reviews the consumption data that is transmitted from each unit.  

3. Stratacon bills the tenants directly based on their consumption data and the monthly administration fee of $11.  

4. Stratacon collects the funds from the tenants and remits these to Masaryktown.  

5. Masaryktown pays the total hydro bill with these funds and contributes its share for the common area costs.  

6. Stratacon administers the accounts and provides Masaryktown with account reports monthly.

   Stratacon takes many steps to avoid the rare situation of having to cut off electricity to a tenant. This includes sending three to four reminder letters and three disconnect notices. Disconnection is always a last resort.  And according to Mr. Mills, tenants are almost always the parties who initiate the payment schedule and stick to it.  Should any arrears amount remain after 90 days, Stratacon will assume that bad debt.

What does this cost everyone?

   Each tenant pays an administration fee of $11 on their monthly bill, plus the cost of their hydro for that month.

   Masaryktown paid $21,488 (plus GST) of the total project cost of $61,488 up front, with the remaining $40,000 of the costs paid out of savings. The payback for Masaryktown was approximately 18 months.  Stratacon now offers options such as no-cost up-front or third party financing.

Is everyone happy?

   From time to time, some tenants complain to the office about their consumption figures or the billing process.  The tenants are used to dealing with the management office, however they should contact Stratacon directly and they know this. In such cases, the management and Stratacon work together to handle the tenant queries. One complaint that cannot be addressed is the necessity for tenants to pay the monthly administration fee.  The agreement between Stratacon and Masaryktown requires this.

   According to Ms. Calkova, while there is more frustration in this regard than before sub-metering, she feels the savings that they have achieved more than makes up for it.

Need a reason to look forward to your next hydro bill?

Between April 15 and June 15, 2005 Toronto Hydro is offering its customers a 2 for 1 coupon for compact fluorescent light bulbs. You can find the coupon in PowerShift, Toronto Hydro's energy conservation newsletter that is included with your bill. Customers with an ‘eBills’ account can get the coupon on-line.

Be sure to clip your coupon and remind tenants or members who pay their own hydro to take advantage of this offer as well.  Act quickly as the coupons are only valid until July 15, 2005.

© 2005 City of Toronto.  Printed in Toronto, Canada.  May 2005