Submetering and Cogeneration: Face A Common Foe

1. Submetering and Cogeneration: Face A Common Foe Herbert. E. Hirschfeld, P.E. Glen Cove, New York, USA Websites: “Submeteronline.com” and “Cogenerationonline.com” October, 2004 Herbert E. Hirschfeld, P.E.

2. To Conserve – to avoid wasteful use of; to save; to preserve; and by doing so reduce the operating costs in a residential building - • Data for Residential Master Metered Buildings: • Electrical consumption is 18-26% higher than either Submetered or Directly Metered Residential Buildings – provides an incentive for building to convert • 10% of apartments consume 25% of the electricity consumed by all apartments – provides an incentive for some to oppose a building retrofit

3. How does the Meteringin a residential building impact its ability to implement Cogeneration?

4. Direct Metered Residential Building Electric from Utility Utility Electric Meter Utility Electric Meter Apartment Apartment Apartment Bldg common area Cogeneration Unit Utility Electric Meter Utility Electric Meter Electric from Utility Thermal Energy Electricity

5. Direct Metered Residential Building Electric from Utility Utility Electric Meter Utility Electric Meter Apartment Apartment Apartment Bldg common area Cogeneration Unit Utility Electric Meter Utility Electric Meter Electric from Utility Thermal Energy Electricity

6. Master Metered Residential Building Cogeneration Unit Thermal Energy Apartment Apartment Apartment Bldg common area Utility Electric Meter For Entire Building Electricity Electric from Utility

7. Master Metered Residential Building Cogeneration Unit Thermal Energy Apartment Apartment Apartment Bldg common area Utility Electric Meter For Entire Building Electricity Electric from Utility

8. Submetered Residential Building Cogeneration Unit Thermal Energy Submeter Submeter Apartment Apartment Apartment Bldg common area Submeter Utility Electric Meter For Entire Building Electricity Electricity from Utility

9. Submetered Residential Building Cogeneration Unit Thermal Energy Submeter Submeter Apartment Apartment Apartment Bldg common area Submeter Utility Electric Meter For Entire Building Electricity Electricity from Utility

10. Why Master Metered and Submetered buildings are better Cogeneration candidates than Directly Metered buildings • In either a Master Metered or Submetered building both the apartment sector electric load andthe common area electric load areavailable to the cogeneration equipment; whereas in a Directly Metered building the apartment sector electric load is not available to the cogeneration equipment.

11. Why Master Metered and Submetered buildings are better Cogeneration candidates than Directly Metered buildings • Having both the apartment and common area sector loads available for the cogeneration equipment enables the production of greater amounts of electricity and associated thermal energy, as well as a larger building demand reduction or load curtailment. • Cogeneration installations sized only for typical residential building common areas are unlikely to be cost effective.

12. Master Metered residential buildings represent a common marketplace - which develops the basis for Strategic Alliances between the metering and cogeneration equipment industries – Which is the basis for METCOGEN

13. Regulations imposed by the New York State Public Service Commission (PSC) upon residential buildings implementing submetering may force building owners to choose between the benefits of metering individual apartments versus the benefits of cogeneration in order to reduce building operating costs. If PSC Regulations discourage building owners from Submetering, the only alternative for metering individual apartments becomes Direct Metering, which usually precludes cogeneration.

14. Barriers to Submetering Implementation become Barriers to Cogeneration

15. What are some of these Barriers?

16. The Home Energy Fair Practices Act (HEFPA) as interpreted by thePSCessentially establishes the relationship between the submetered tenant and building owner as if building owner were a utility insofar as billing and verification are concerned. • The PSC does not allow the building owner to disconnectelectricity for failure of tenant to pay. Utility hasthat ability to disconnect apartment electricity for failure to pay. The utilization of courts to collect unpaid utility costs is time consuming and not cost effective. Courts generally will not allow for a tenant to be evicted for non-payment of utility as long as tenant continues to pay rent.

17. 3. The polling of non-shareholders creates turmoil between the building owner and the tenants. This PSC requirement is unrealistic because it currently requires an application to submeter electricity when at least one non-shareholder opposes submetering. There is always at least one non-shareholder opposed.

18. 4.The reaction by the PSC to a singlecomplaint is unrealistic and its response can severely jeopardize the submetering process for the building and, at best, cause a substantial delayand impact the implementation cost. In practice, any individual armed with a computer and some determination can manipulate the existing system and delay, if not destroy, the submetering process. Example: Marvin Gardens

19. Marvin Gardens 500 apartments 100 shareholders 200 fair market rentals 200 rent stabilized units PSC Application – 1/7/04 Complaint to NYS – 3/23/04 PSC Approval – 9/1/04 Still to come – DHCR application – process at least 4 months before rent stabilized units pay for their electricity. Resultant fallout includes lost summer savings, Anita Bridge project and lost contractor.

20. The building owner is relieved of the disadvantages listed in items (1) – (4) if he directly metersthe building, thereby, eliminating the cogeneration option. • The PSC requirement for a shareholder vote in a master metered building with 100% shareholders, particularly a Mitchell-Lama building which is under the jurisdiction of HPD, is unrealistic. The Board of Directors should be empowered to make the submetering decision, as they are elected by the shareholders and are responsible (as representing the corporation) to pay the utility costs – they should be able to determine the manner in which the utility costs are paid.

21. Buildings Implementing Both Electrical Submetering and Cogeneration Clinton Hill Apartments 7-60 KW & 6-30 KW Microturbines Park Ten (10 West 66th Street) 1-70 KW Microturbine