Ratio Utility Billing Systems (RUBS) and submetering are two different methods used by property owners or managers to allocate utility costs among multiple tenants in a building. The need for submetering or RUBS is often determined during the construction of the property.
If the utility company installs a meter in each unit during construction, then the utility provider bills each unit directly for their utility consumption and there is no need for the property to install their own submeters or use RUBS.
However, if the utility company does not install a meter in each unit during construction, the utility company will usually install one or two master meters that service the entire property. In this case, the property receives the utility bill for all the utility usage and passes those charges on to tenants by installing their own submeters (Submetering) or by allocating the charges (using RUBS) based on an allocation factor such as the square footage or occupancy of each unit.
Here’s a brief overview of Submetering and RUBS:
Submetering
- The property installs a meter in each unit to measure that unit’s specific consumption of water, gas, or electricity.
- The property calculates the utility charge for each unit based on the usage recorded by the individual meter. The submetered usage of the unit is multiplied by the utility rate determined from the utility bill from the utility company.
- Submetering is considered a more precise billing method since tenants are billed according to their actual consumption.
Ratio Utility Billing System (RUBS)
- Utility costs are allocated to tenants based on an allocation factor such as the square footage of the unit, the number of occupants in the unit, or some other factor.
- The allocation is done using a mathematical formula. For example, if the utility costs are allocated on occupancy, the mathematical formula might calculate the percentage of the total utility cost that should be allocated to each unit using the number of people in each unit as the numerator and the total number of occupants in the building as the denominator. In this example, the utility cost for a unit with 2 people would be twice the cost of a unit with a single occupant.
- RUBS does not use a submeter in each unit, but relies on a proportional and equitable allocation method.
Key Differences
- Measurement: Submetering involves measurement of individual tenant consumption through a dedicated meter in each unit, while RUBS relies on an allocation formula.
- Precision: Submetering is considered more precise as it measures each tenant’s actual usage. RUBS allocates the total utility costs to individual tenants based on an allocation factor.
- Implementation: Submetering requires the installation of individual meters in each unit, which can be a significant upfront investment. RUBS, on the other hand, is easier to implement without the need for individual meters.
Conclusion
When the utility company does not bill tenants directly, the property typically passes the charges on to tenants by installing their own submetering system or using RUBS to allocate the charges. The choice between submetering and RUBS typically depends on factors such as the structural design of the property, the cost to install and maintain a submetering system, local regulations, and the anticipated willingness of tenants to readily accept the chosen method. Both methods aim to fairly distribute utility costs among tenants, but they have different approaches to achieving this goal.