Wednesday, December 31, 2008

Submetering Technical Conference Postponed to January

The Public Service Commission Technical Conference on Submetering was postponed from December, and is now scheduled for January 20, 2009 at the PSC's New York City office. See our prior post, PSC to Hold Technical Conference on Electricity Submetering Issues.

At the Technical Conference, the Active Parties will consider the Commission's proposed amendments to existing submetering regulations. The proposed regulations streamline the submetering approval process for building owners. More than half of the Active Party list for the conference is comprised of property managers, owners, developers, and their trade associations; submetering companies and their trade associations, electrical apparatus manufacturers and sellers; and consulting engineers and energy management service companies.

The existing submetering regulations include a rate cap, which prohibits tenants in residential submetered buildings from being charged more for electricity than they would pay if they were direct customers of the utility. The proposed regulations would eliminate the rate cap, if tenants "agree" to be charged time-of-use (TOU) rates. Effectively, this change could result in tenants being forced to move out of their apartments to avoid being charged higher TOU rates as current leases expire. The proposed regulations would also eliminate the rate cap entirely, in cooperative and condominium units.

Like the existing regulations, the proposed regulations have no enforcement mechanism or monitoring provisions. Once landlords have received PSC approval to submeter, the PSC does not actively monitor their compliance with the Home Energy Fair Practices Act, nor does it track and compile information on complaints against submeterers as it does with utilities and ESCOs.

In the pending Con Edison rate case, PSC Staff proposed that all multi-tenanted buildings buildings currently served by Con Edison's SC-8 and SC-12 bulk rates for multiple dwellings be submetered within four years. Buildings that failed to meet the submetering deadline would be charged the higher, SC-1 rate for residential customers. Staff argues that submetered buildings are more energy efficient because tenants monitor and reduce energy consumption. See Staff Brief at pp. 276-280.

Con Edison opposes Staff's proposal, noting that there is no evidence to support Staff's assumption that tenants' access to usage information will change their consumption behavior. In fact, Con Edison says, where extensive rewiring is required to accommodate submetering, the rewiring would effectively increase the building's electrical load, because tenants would be permitted additional appliances and electronics. Con Edison Initial Brief at pp. 461-63

The PSC is single-mindedly focused on submetering, and NYSERDA is doling out funds to building owners eager to pass on to tenants the cost of their energy efficient buildings and equipment, accompanied by a rent reduction that is nowhere near the new electricity charges. For example, the PSC recently denied New York University's request for a rate class waiver, which would allow the university to remove individual meters from a dormitory building and to master meter the building. NYU pays for students' electricity consumption, but the master metered rate is lower. The PSC refused the request, reciting its undocumented "submetering mantra": "Individual metering provides price signaling to consumers regarding their consumption of electricity, thereby encouraging the conscientious and efficient use of energy in their residences." See the Commission Order in Case No. 07-E-0820.

In the pending Con Ed rate case, Consumer Power Advocates called for an exemption from submetering for buildings operated for temporary housing, such as student dormitories, because in these buildings, it is in the owner's interest to reduce energy costs over the long term, whereas individual tenants only benefit from savings for a limited time. Also, the owner controls much of the energy infrastructure of a building, the windows, the insulation. Submetering allows landlords to shift all energy costs to consumers who have no power to improve thermal efficiency of the structure. Also, landlords may control the upgrading of energy consuming major appliances in a tenants apartment, such as refrigerators and through-wall air conditioners.

These recent events foretell the PSC's headlong rush toward submetering multiple dwellings throughout New York. Yet simple complaints alleging violations of the Home Energy Fair Practices Act (HEFPA) by existing submeterers languish at the PSC Office of Consumer Services without any action for months and months. Complaints filed by PULP on behalf of aggrieved submetered tenants as far back as April 2008 remain unresolved. In fact, the PSC has even refused to enforce its own complaint process regulations, by allowing one submeterer to ignore a customer's complaint that was filed in June 2008. See Lax PSC Enforcement of Submetering Orders Allows Landlords to Overcharge for Electricity Sold to Tenants and to Circumvent HEFPA Protections.

Residential submetering is a complex issue. Adequate customer protection requires more than a technical conference catering largely to building owner interests who stand to reap sizeable grants from NYSERDA and a pass-through of their costs to tenants, likely to be followed by PSC easing of its already ill-enforced rules. Legislation is needed to protect tenant interests and to prevent landlords from offloading responsibility for energy efficiency of their structures and fixtures.

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