The Public Utilities Commission of Ohio (“PUCO”) recently opened an investigation into the practice of submetering commonly employed by landlords for multi-unit apartments, condominium associations and in mobile home parks. Submetering occurs when a multi-unit building or property with multiple lots is served by a utility or municipal entity through a master meter. The owner or association then installs individual meters for each housing unit or residence, and charges each occupant for their measured usage. The PUCO opened the investigation in response to a pending complaint submitted by a Columbus utility attorney residing in a downtown condominium concerned about excessive added costs. The complaint seeks to have the third party submetering agent’s provision of utility services to be declared illegal and unreasonable, and requests monetary redress for overcharges.

The Columbus Dispatch previously conducted its own investigation in 2013. The paper found that in some cases, submetering bills to individual customers or tenants were 5% to 40% higher, depending on the type of utility (water or electric) and the particular agent providing the submetering services. Some of the increase may be due to incorporating charges for common area usage (such as hallway lighting in an apartment building) or to pay fees by the third party submetering agent for providing the service. The Ohio Attorney General stated that his office had no jurisdiction and that regulation of the industry would require action by the Ohio legislature.

In the Dispatch investigation, former PUCO Chairman Todd Snitchler stated that his agency lacked jurisdiction over submetering. This opinion was reinforced in a recent, dissenting Entry at the PUCO. Commissioner Lynn Slaby noted that the Commission’s past precedent was to dismiss cases against submetering companies. Commissioner Slaby further stated that the PUCO is “without jurisdiction” over the dispute. In the majority opinion, the Commission decided to hold the complaint in abeyance and open an investigation as to the question of PUCO jurisdiction over submetering companies.

In the investigation, the Commission seeks the opinion of any interested party, via submission of initial and reply comments, on whether the Commission has jurisdiction over submetering entities. Depending on the comment and opinion provided, the Commission may decide it has the authority to submetering activities. In doing so, the Commission’s exercise of authority could result in significant regulatory burden for landlords, condo associations and third party submetering entities. Initial comment is due on January 16; reply comments are due on February 2.