Some multifamily buildings have direct metering—the utility owns each apartment’s meter, and each resident pays directly to the utility based on an individual utility rate. Others don’t have electric metering of individual units—the entire building is charged as a whole. This is known as master metering.
Most master-metered buildings were built in the 1950s and ‘60s, when electrical costs were low. The building management charges the individual units either based on the apartment’s size or the number of shares the unit owners have in the co-op.
But let’s say there are two one-bedroom apartments next to each other, one owned by an elderly woman who rarely even turns on her TV set, the other by a young couple with two computers, two window air conditioners, a heavily-used TV, a DVD, a cell-phone charger and more. Is it fair that both would be charged the same amount for electric usage?
And from management’s point of view, master metering can lead to problems when electric costs go up, or when enough of the unit owners or shareholders start to buy super-powerful air conditioners or heaters.
In response to all these problems, more and more buildings with master metering are beginning to switch their electricity usage to submetering, which allows management to bill each unit individually while getting one bill of its own.