October 22, 2013
At one time, apartment rent included just about every utility except the telephone. Gradually, property owners have switched to having tenants pay separate bills for the services. This often means the tenant has individual meters with electricity, natural gas and water companies. Sometimes, however, the property owner hires a “submeter” company to install meters in each unit and handle billing. For the tenants, the submeter company functions much like a utility.
What we found:
• Lack of regulation allows Ohio submeter companies to charge residents more for electricity than the customers would pay to a regulated utility — currently 5 percent to 40 percent more.
• One local submeter company, American Power & Light, uses evictions as a tool to help with collections, going far beyond the methods available to regulate utilities.
• No Ohio agency, including the Public Utilities Commission of Ohio and the Ohio attorney general’s office, has any authority over submetering. The agencies often refer calls to the Better Business Bureau, which has seen a dramatic increase in inquiries about the companies.
• This submeter business model is legal only in the following other states: Alabama, Georgia, Kansas, Pennsylvania, South Carolina, Utah and Washington. There is no evidence that similar companies are using the model on a large scale in any of those states.
• The national trade group for submeter companies said some Ohio companies are outside the industry mainstream and pushing the envelope with their business practices. The Ohio companies are not members of the group.
How we did it:
• The Dispatch interviewed residents at apartment and condominium complexes across the region and analyzed their bills and reviewed their claims of unfair treatment. State officials, consumer advocates and energy-company executives also were interviewed.
• The bill analysis was done with the assistance of Riverside Energy of Dublin, a company that advises businesses on how to manage energy costs. American Electric Power also reviewed and confirmed the figures. The source documents were customers’ bills and AEP’s rate schedules.
• The information about state laws is based on interviews with officials in each state, with assistance from the Utility Management and Conservation Association, a national trade group for submeter companies.