The heating season is here and gas bills are spiking sharply for owners whose properties use central heating systems, ovens and domestic hot water heaters. However, these heating systems can be measured and residents are billed for their share of the gas bill. Owners and property managers who are unaware of this option pay significantly more money for heating than they need.
If a multi-tenant complex is individually measured for heat and residents are billed for their own use, gas consumption tends to be lower … sometimes by up to 35%! Lower gas consumption results in lower costs for the owner, more competitive rents, and a perception from prospective tenants that the community is cheaper. Even when an owner bills residents for gas using a RUBS (Ratio Utility Billing System) method, consumption is higher, the owner’s share of the value of the expense or common area deduction (CAD) is also higher.
TURN GAS EXPENDITURE IN REVENUE
Many owners and managers are not aware that these heating systems – baseboard radiators, fan batteries, ovens, domestic hot water heaters and steam radiators – can be measured at an affordable price for individual rental use. Combine heat measurement with resident gas billing, and you have a profitable combination that boosts net income, insulates your balance sheet from rising utility costs and increases the value of your property.
A BETTER approach to resident charging
Heat measurement, also referred to as “heat allocation” or “energy cost allocation”, is beneficial to owners and residents. It is the best way to bill tenants for their share of gas expenses because:
- They only pay for the gas they use
- They benefit financially when saving
- The gas price is discounted because properties with master meters are usually charged at a commercial rate.
Property owners who install a heat measurement system and transition from owner-paid to resident-paid utilities can expect to see total gas consumption on their properties decline measurably. Data collected from direct measurement can be used to monitor potential maintenance issues, improve energy efficiency and save money on the property. What is even more remarkable, some multifamily owners who have measured heat have experienced a decrease in the consumption of other utilities, even though these utilities were not metered!
If you own and operate a house with a low income tax credit property, heat measurement is a very compelling option. The reason is that the U.S. The Department of Housing & Urban Development (HUD) does not allow tenants to be billed to utilities using a RUBS method. Heat measurement allows you to recover residents’ share of gas costs fairly and encourage responsible energy consumption.
Any multifamily complex that uses a central heating system should consider strongly implementing a wireless heat measurement system.
Heat measurement is very affordable compared to electrical, gas or water embedding systems because the equipment is cheap and the installation does not require the services of an authorized plumber or electrician. For a multi-family complex that uses stoves, baseboard radiators or fan units, you can expect to spend $ 195 – $ 250 per night. Device for a complete wireless billing system ready for billing. In multifamily complexes that use individual stoves and domestic hot water heaters, the price rises to $ 390- $ 500 per night. Unit because you need two meters per apartment.
A thermometer system can be installed quickly. An experienced technician spends about 30 minutes installing a heat meter on a baseboard radiator or oven. Two technicians working on a 100-unit complex spend less than a week on having a complete heat measurement system up and running and ready for billing.
AN OVERVIEW OF CENTRAL HEATING SYSTEMS
There are a number of central heating systems used at multifamily complexes throughout the U.S. but generally they fall into two categories:
- ovens: Gas is supplied from a master metered central line, which is connected to stoves in several apartments / townhouses
- Central Hydronic Systems: central boiler connected to baseboard radiation and fan units in apartments.
The low cost and efficiency of central heating systems make them a popular choice in the multifamily industry.
Ovens are by far the easiest systems to measure because the equipment works in a simple way. The ovens burn gas to heat air, which is then circulated through an apartment unit. Each oven has an input BTU rating. This assessment and the amount of time the oven runs are used to calculate the amount of gas used by the tenant. Multiply the amount of consumption by the gas price and you can calculate each resident’s bill.
CENTRAL HYDRONIC HEATING SYSTEMS
A central hydronic heating system generally consists of the following:
- A central boiler (heated with gas or oil)
- A water pump for circulating heated water
- Baseboard radiators or fans (in the apartments)
- A loop of pipe so that the water runs from the boiler to the apartment and back.
HOW BASIC RADIATION WORKS
A gas, oil or steam-fired boiler, usually located in the basement or ground floor of an apartment complex, warms the water to a preset temperature. When a thermostat in a resident’s unit requires heat, the hot water is pumped through a pipe loop to the baseboard radiator in the apartment. When hot water passes through the fin pipes in the baseboard radiator, it heats the air and causes a convection current. The rising hot air draws cold air from beneath the unit, which is then heated. When the desired temperature is reached, the thermostat switches off the flow of hot water and interrupts the heating process.
When hot water passes through the fins in the apartment’s baseboard radiator, it cools. The cooler water is then pumped back through the copper pipe loop (return system) to the boiler. The cooler water is heated again by the boiler, and this process continues as long as the residents need an opportunity for heating.
BASIC FOR CENTRAL HYDRONIC SYSTEM HEATING
To allocate how much gas a resident uses, a small electronic device (heat meter) is installed on the baseboard radiator or fan coil in the apartment tracks:
- When the thermostat requires heat
- How long the heat runs
- The temperature of the water running through the pipe and the fan speed (blower pipe).
Inside the heat meter is a wireless transmitter that sends recorded data and any error information to a centrally located computer called a “data collector.” Fault information may include the status of zone valves, tamper alarms and more.
The data collector connects to a telephone line or the Internet. The owner, property manager or billing company can download the consumption and error data remotely and use it for resident billing, data analysis and / or monitoring.
CALCULATION OF A RESIDENCE OF HEALTH
The calculations used for hydronic heat billing are complex. They contain run data from the occupant’s heat meter and other standard factors – baseboard length, BTU rating, etc. – to determine an allocated amount of gas used (in Therms, BTUs or CCFs). This amount of consumption is then multiplied by the master-meter gas velocity ($ / CCF) to calculate a resident’s bill.
Since these calculations are very involved, home heating bills are often calculated incorrectly. This leads to underpayment of occupants or overburdening of the owner. Overbilling is a serious situation that could land the owner a front-row seat in the Public Use Commission (PUC) “doghouse.” Overloading should be avoided at all costs.
IS HEAT MEASUREMENT LEGAL?
Thermal measurement is legal in almost every state. However, it is important to confirm with the state, county and city regulators where your property is located that you can bill residents for heat using an allocation method. Your rental language must also include a provision, signed by the tenant, that accepts that the owner can bill for utilities.
There are a large number of sciences and techniques behind heat measurement that make it a legal and reliable method of heating fuel billing. The American Society of Heat, Refrigerating and Air-Conditioning Engineers, Inc. (ASHRAE) has published a comprehensive technical document describing all facets of heat measurement and cost distribution titled: “ASHRAE Guideline 8-1994: Allocating Energy Costs to Multi-Housing Homes”. The document can be purchased at: http://www.ashrae.org.
Now is the perfect time to take advantage of the measurement of the central heating system at your multi-family complex. You significantly reduce your utility costs, make your property more competitive and protect you from increases in gas rates. It’s simple, affordable, and the measurement process can be completed quickly.
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