Tenant Space Submetering (text version)

The U.S. Department of Energy (DOE) hosted a live webcast presenting an overview of the Tenant Space Submetering Specification. Mike Hoffman, from the Pacific Northwest National Laboratory (PNNL), developed the content, which addressed the benefits of tenant submetering, general overviews of meter types, as well as design and implementation considerations of the Tenant Space Submetering Specification.

Below is the text version of the webinar titled "Tenant Space Submetering," originally presented on June 16, 2011. In addition to this text version of the audio, you can view the presentation slides.


Diane Vrkic:

First let me introduce Mike Hoffman and myself. My name is Diane Vrkic and I work for Lawrence Berkeley National Lab, facilitating our Whole and Existing Buildings Project Teams. Mike is with Pacific Northwest National Labs, his career has focused on the electric utility and industrial project management and technology innovation space. Mike has worked domestically and internationally on energy efficiency. Mike has developed the content for the webinar and will present it today.

Mike Hoffman:

Thank you to Diane, and everyone at LBNL, and the GSA, for their valuable input and comments on the presentation. The webinar objectives, as they were introduced on the screen are as follows:

  • Benefits of tenant submetering (hardware and software)
  • Business case for tenant submetering
  • General overview of meter types
  • Tenant submetering – design considerations
  • Tenant submetering – implementation considerations
  • Industry resources
  • Q&A
  • Reference links

In an interest in finding commercial buildings that had been master metered and converted to tenant metering, with tenant billing, led me to see if I could find any studies that had documented this process. I have not found any instances. There are a number of residential examples, however none that they came across for the commercial sector.

This presentation is a cross between the business aspects and the technology for tenant submetering, but we will also get into more generic submetering and energy management issues as well.


Mike Hoffman:

The biggest issue: "If you can't manage it you can't measure it" (both tenants and landlords). Splitting up utility bills by square footage is not fair and equitable to the tenants. Landlords agree that there is a need for a better understanding of energy rates, costs, and building operational issues. There are a lot of issues with measuring tenant energy, from common area energy usage, to peak demand charges. There is a wide range of hardware and software consulting vendors that can provide services for submetering. A list of vendors was purposefully not included because the DOE has strict rules around providing a complete list, as well as favoring a specific vendor(s).


Mike Hoffman:

There are many technology options/solutions to install that can impact energy habits and practices for tenants. Trending is a means to identify situations that will help a tenant save money. Whether you are the building owner or the tenant, being able to see that schedules are being maintained, that there is a schedule in place of equipment, and that systems are proactively analyzed is very important. The timescale for trending is very important and the way you can go about trending with regards to daily, weekly, seasonal issues, and occupant behavior can impact your overall results. There are a number of support tools that can help address this. A reference list of these support tools is included in the slide deck.

If you Google "submetering" with "consultant, vendor, or expertise" the search function can provide results that can help you locate submetering resources to get you started. There are a number of vendors and consultants that can be located via Google search.


Mike Hoffman:

The biggest issues for tenants are awareness of any energy use and the ability for the landlord to pass off energy costs to the tenant based on lease structuring. One of the most interesting things we came across was relevant to some of the EPA work, where tenants actually pay for what they consume. In this case, the energy costs were on average 21% lower than buildings in the same energy star category that had gross leases for their tenants (leases that included energy costs in the base rent). The lesson learned from this instance is that when tenants have to pay for what you're consuming, they focus on reducing those costs.

A number of other building benefits are realized, from maintaining comfort at a lower cost, even though a number of building energy managers place tenant comfort over energy efficiency in terms of running their buildings. For building managers, they would rather not have a tenant complaining, than focus attention on climate control appropriately from data that comes from submetering and systems.

There are a number of other benefits that include reduced emissions, peak demand reductions, and potential to reduce scheduling errors, which can occur in larger organizations. With larger organizations, it's common that every building is run at 72 degrees during business hours. This presents a large opportunity to reduce energy demand by introducing scheduling at variable temperatures.


Mike Hoffman:

One of the things that we looked at was the cost of implementation for installing submetering. The best tenant example we came across was Vornado Realty Trust in New York. They show a big reduction in baseline energy usage and peak reduction impacts in demand and charges for the building. They have also put a dollar value on the energy savings for the tenants, as indicated in the presentation. The other two examples selected are 1) Adobe Systems and 2) Bank of America. These examples both illustrate how building owners that introduce submetering into their facilities are looking at both financial and nonfinancial benefits. In these examples, the owners were also the tenants; in other words, they were owner-occupied buildings. In addition, these examples reflect the trend in corporations to maintain a green image — another direct benefit of submetering.

The business case for submetering has many lease implications. Generally, owners have been responsible for submetering, with savings benefiting tenants. Net leases encourage conservation; gross leases encourage conservation by the landlords, rather than the tenants who have a direct effect on energy demand.

Question by Mike Hoffman: Do you generally do net or gross leases?

Answer from Bill Mobius: They deal with both.

Question by Mike Hoffman: Are there situations where they tend to go more net or gross?

Answer from Bill Mobius: It depends on a number of factors. Typical multitenant office buildings tend to sign gross leases. However, industrial leases tend towards net leases.


Mike Hoffman:

In some locations, the utilities encourage a master meter with a wholesale price. There is the ability to resell energy and bill clients with a reasonable rate of return. Places that allow this are listed in the presentation. Keep in mind, there are complicated rules and regulations around distributing energy costs to tenants from PUC's (public utilities commissions) and municipalities.

Submetering also has the ability to reduce infrastructure capacity extensions. An example of an existing building was shared with a new tenant that required a data center. If submetering was used to reduce the overall building load, the data center could also be submetered. If the data center and the overall building employed submetering, then the new tenant might not need to increase capacity and service to the building.


Mike Hoffman:

A quick overview of meter types is shown on this slide. The image on the top left is a utility smart meter and provides the most detailed level of information. It can also be used as a submeter to individual tenants and is an automated meter reading system that can be pinged or connected through a local area network (LAN).

The center image is of a current transformer, which takes a signal and puts it into a data acquisition device. The device feeds the signal to the meter.

On the right is a clamp-on "AM" meter. It is low cost and gives read output on the screen on the bottom of the device. It lets you check loads real-time, but has no storage capability.

Below that are communications enabled meters. These units can be a little higher in cost, but they can store and communicate data [wirelessly]. This meter uses "WiFi" to communicate and can serve as a submeter. In addition, this meter has back-end software for billing purposes.


Mike Hoffman:

With web based data logging at the electrical panel, or circuit level, data can be aggregated into a tenant energy bill or to advise tenants on energy usage. There is also the ability to utilize real-time or historical data with this tool. One of the main advantages to the graphical user interface is that it makes it a lot easier to analyze what is going on with the system and what you can do to reduce energy use. This is useful to both the tenant and the landlord. With this additional functionality comes a higher implementation cost than the basic energy management tools.


Mike Hoffman:

Online or cloud energy management systems are located in newer buildings with more sophisticated building controls. These online or cloud energy management systems usually come with monthly service fees for presenting the information across the web. They aren't generally used to bill tenants; however they are used by folks like Johnson Controls and building engineers to manage building energy efficiency.


Mike Hoffman:

The meter on the next slide is a sub-circuit level meter for miscellaneous loads (copiers, air conditioners, and/or computers) where you can measure data from a specific circuit. This is called a "HOBO" and is considered low cost and can be enabled with minimal communications. The "HOBO" does not plug into a billing system.

Energy information systems can range from spreadsheets to graphical representations that can identify trends. These are used by energy managers, financial managers, and utilities alike. Utilities use these on a grand scale and use them to prospect for buildings that need energy-efficiency upgrades. The software can be purchased or run on the web by a vendor. The software is good for diagnosing issues with HVAC. There is a lot of data storage required from these systems, relative to the time increments which are likely 15-minute or hourly information points. The data needs to be stamped with timestamps and is generally security and password protected.

The big issue is to identify abnormal utility consumption that doesn't stand out on a utility bill. There is also the potential for analysis to detect faults or failures before they occur by the energy use of particular systems.


Mike Hoffman:

A special thank you to LBNL was offered with regard to sharing the content on this slide. I include this because it was useful to define EIS systems better. There are overlaps in monitoring control, EIS, and the potential for demand response, particularly in California. The EIS is generally web accessible, provides good data presentment, and enables good analysis. They are not energy management and control systems, they do not do fault control and diagnostics, and they do not include calculators or analysis tools. A list of vendors that have good tools is listed on this slide. The "Schneider ION EMM" is what the GSA has installed in their Washington, D.C., offices. They gather information at the main meter, master meter, and from the utilities. All of this data gets fed into the tool so it is housed in one location.

There are a number of parts to the EIS systems that need to be considered, including the actual meter, data acquisition, gateways, routers that pass information along, SQL system language, database management systems, and the issue of graphical representation that the data is presented in to take ultimate action on. The EIS systems make it a lot easier to spot problems before they occur with their graphical tools, rather than the massive amount of data inputs in numeric form that are hard to react or be proactive with because they are cumbersome.


Mike Hoffman:

This slide covers tenant submetering implementation strategies. It outlines the necessary steps to implement submetering in a building. In many cases, implementation of submetering will include external vendors other than the building management team. Prioritization from a tenant perspective needs to occur to be able to assess what they may want to do in terms of equipment installation and audits. The audits are really at the building level for heating, lighting, and cooling. This also speaks to the issue of net leases or where tenants own their own buildings where there is a direct impact rather than in multitenant buildings.


Mike Hoffman:

This slide illustrated some of the many design considerations prior to implementing submetering. If you can identify single-tenant circuits this will be the easiest and most efficient route. If you have single circuits with multiple tenants, it will only enable you to do an allocation of load percentage according to the ration of square footage. This may cause problems with the tenants because it may not be fair and equitable to each tenant.


Mike Hoffman:

Design considerations for submetering can include the following:

  • What were the heating degree days?
  • What were the cooling degree days?
  • What is the occupancy schedule for a particular office or space?
  • What is the best way to deal with submetering?
  • Do you only meter HVAC, plug load, and data centers loads? If this strategy is selected, it doesn't really do what might you want to do in terms of splitting multiple tenants into billable increments and it does not show how much one tenant influences the overall circuit load without the support of data.


Mike Hoffman:

Installation should be done by qualified electricians. If you don't have staff electricians, safety and installation training is necessary prior to installation of submeters.

Mike Hoffman:

Another important issue to tenants is data security. This is also very important to utilities. The level of encryption and access credentials should be reviewed with your tenants and approved by them. Designing security levels and access is an important component of submetering.


Mike Hoffman:

This slide consists of useful organizations that can augment the information presented in this webinar.


Question: Can you comment on the relative cost of the types of meters presented earlier in the presentation in terms of cost/meter?

Answer from Mike Hoffman: The utility grade meter can range from $500 to $5,000 depending on its sophistication. If you have an electrical contractor, they will be more cost-effective than the utility installing it. The use for the meter is different than the utility. If the utility has a similar meter installed on the building, they may have data presentment tools already.

  • The middle range is from $20 to $100 or more.
  • The clamp on AM-meter tool is about $150 plus or minus $50.
  • The bottom wireless meter is $495 (to be confirmed), but still needs an electrician to install it.
  • The biggest cost is the planning for the installation and the hooking up to the energy information system (EIS). Which panels and circuits the meter gets installed on needs to be decided as well.
  • The web-based data logging systems can be $1,000 to $5,000 with additional add-ons for information presentment packages.
  • The cloud systems don't give you the ability to easily submeter, but they can be useful tools for whole-building efficiency.
  • There is a lot of good DOE information on data center efficiency. Intel has participated in this and there are a lot of efficient servers available.