The Ontario Energy Board (OEB) has issued a ‘Decision and Order’ that will allow landlords to install ‘smart sub-metering systems’ for individual rental units. Smart sub-meters’ are devices that can be installed in individual apartments to monitor a tenant’s use of energy thereby allowing individual billing.
(Refer to this link for more details: http://www.toronto.ca/legdocs/mmis/2009/cc/bgrd/backgroundfile-23859.pdf
The main reason behind this ‘Decision and Order’ is that landlords/ property owners have been installing ‘smart meters’ in residential and commercial complexes in the absence of regulations. Ostensibly the purpose of these ‘smart meters’ is to monitor the energy used by the individual occupant(s) and give them control over usage so that they can become more energy efficient. In a nutshell, landlords were transferring energy costs to individual tenants without the approval of the OEB energy regulator.
After this practice was deemed illegal by Ontario’s energy regulator, landlords had to cease this activity. This latest ruling by the energy regulator at the OEB now allows the installation of ‘smart sub-metering systems’ but it contains a set of conditions that will govern the installation process.
It is important to note that among the various conditions contained in the ‘Decision and Order’ from the OEB the most significant one affecting tenants explicitly states:
The use of the smart sub-metering systems to bill tenants is only permissible with the express written consent of the tenants.”
The option for consent can be exercised when the tenant signs the lease/tenancy agreement.
The conditions associated with this OEB ruling are extensive and complex and can be reviewed in the Decision and Order and also in the report at the link below:
OEB authorizes installation of electricity smart sub-metering systems in residential and commercial complexes
Although there are multiple reasons for ‘smart sub-metering’ (mostly to do with conservation and allocating financial responsibility) these concerns below immediately come to mind:
1) There are some tenants who use a lot more electrical energy and water than others due either to the number of occupants residing in a unit and/or the electrical appliances they operate such as washers, dryers, air conditioners etc. This means that the units with fewer occupants and/or no additional electrical appliances are consuming less electrical energy and water and therefore are subsidizing units that use more resources.
2) Tenants residing in a badly maintained or older building with poorly insulated windows, doors and walls will have a very high energy bill compared with tenants in a well insulated building. These deficiencies fall under ‘capital expenditures’ and repairing or upgrading these items is the landlord’s responsibility and can be covered by their profits. Aging electrical appliances such as stoves and fridges that are not energy efficient will also increase the energy bill. This shouldn’t be an issue for new buildings.
3) Is there the possibility that the landlord might be able to circumvent the Annual Guideline Increase by claiming the installation of ‘smart meters’ can be bundled with other capital expenditures and therefore apply for an Above Guideline Increase?
The fact that landlords/property owners are ‘for’ this regulation gives one a gut feeling that there are less financial benefits for tenants. Therefore this question has to be posed: Do ‘smart sub-meters’ have more to do with money and increased profits for landlords than for environmental concerns and a fairer system of payment for energy consumed by individual tenants?
Tenants should examine all the ‘pros’ and ‘cons’ of smart sub-meters and do the math related to hidden fees and their actual monthly rent before signing the lease/tenancy agreement.
These links below provide more detailed information to help you make an informed decision on whether to agree to the installation of a smart sub-meter in your apartment:
1. Toronto Star articles:
- Tenants must consent to smart meters under new rules
- Smart meter ban boggles supplier
- Smarten up on smart metering
2. Your landlord wants you to start paying for electricity – Be Careful
This publication was prepared by the Advocacy Centre for Tenants Ontario (ACTO) and contains a helpful Q&A section as well as some important cautions for tenants.
3. So your landlord wants to sub-meter electricity service in your apartment building… is another publication from ACTO. It provides a definition of ‘smart sub-meters’ and identifies issues where tenants should exercise great caution before committing to smart sub-meters:
4. Smart Meters: A New Way To Think About Electricity
According to the information at this site . . . “By 2010, every home and small business in Ontario will have a Smart Meter”
5. Installation of Smart Meters in Residential Rental Units and Its Impacts on Tenant Affordability
This is a City of Toronto staff report that provides clarification on ‘smart sub-meters’. Pay close attention to the section Case example: A Rental Building in North York as it contains an example of a tenant who opted for ‘smart sub-meters’ but, due to various additional fees, ended up paying a very high monthly rent. This case has become contentious and the tenant has taken the case to the Landlord and Tenant Board.
6. Smart Sub-Metering Resources published by the Federation of Metro Tenants’ Associations (FMTA)
This FMTA link below contains several resource documents which suggest that Smart Sub-metering might not be in the best interest of tenants:
7. Residential Tenancies Act (Landlord and Tenant Board)
Smart Meters and Apportionment of utility costs
This link taken from the Residential Tenancies Act (e-laws) PART VIII, Sections 137 and 138, respectively, includes legal information on the rights and responsibilities of both the landlord and the tenant.
While we all have to embrace a more conservationist ‘green’ approach to the environment and dwindling resources we must not be sucked into a scheme that will enrich landlords/property owners while impoverishing more vulnerable members in society.
GET INFORMED ON THIS ISSUE OF ‘SMART SUB-METERS’ BEFORE YOU MAKE A DECISION TO EMBRACE IT!
NOTE: For another perspective on smart sub-meters refer to this follow-up post “Smart Sub-meters … Getting it Right” at this link: http://wp.me/pia0J-BC