Wis. Admin. Code § 113.0803 Individual Electric Meter Requirements Rule Revision HOUSING IMPACT ANALYSIS
SUMMARY: Wisconsin Admin. Code PSC ch. 113 establishes service rules for electrical utilities. Wisconsin Admin. Code § PSC 113.0803 addresses individual electric metering requirements. The existing rule, last revised in 2002, requires that each dwelling in a non‑transient multi-dwelling unit residential building and mobile home park, constructed or renovated after March 1, 1980, must have its electric service individually metered. The individual metering requirements are generally intended to promote energy conservation, ensure that each customer is billed for their own energy consumption only, and ensure that the utility is able to disconnect the electric service to an individual unit without affecting the service of other units at a property. The existing rule authorizes the Public Service Commission (Commission) to grant waivers of the requirement in specified circumstances, such as cases where tenants have minimal usage under their control and the electric equipment under tenant control is substantially more efficient than applicable codes. The proposed rulemaking would update the existing provisions of Wis. Admin. Code § PSC 113.0803 to address the emerging considerations raised through recent waiver requests and support simplicity and clarity in future applications of the rule. The rulemaking provides clarifications to the applicability of the existing waiver requirements; updates existing criteria for granting waivers to reflect current standards and practices for assessing equipment efficiency; and establishes new criteria which the Commission may apply when considering grounds for a waiver of this rule under Wis. Admin. Code § PSC 113.0803(5). The proposed rulemaking also adds consumer protection language that would apply to projects that do not require individual unit metering under Wis. Admin. Code § PSC 113.0803(4). In preparing this Housing Analysis, Commission staff held meetings with staff from the Department of Administration’s Division of Energy, Housing and Community Resources (DOA DEHCR) as well as the Wisconsin Housing and Economic Development Authority (WHEDA). Those staff were able to provide information that was used in evaluating potential housing impacts and the impacts to tenants if they did not have individual electric meters. To assist with finding information that could be used by Commission staff in this Housing Analysis, WHEDA conducted a survey of building developers to gather information on the existing rules, including the interest or ability to obtain a waiver, as well as cost impacts of individual metering requirements to residential multifamily housing. That survey had 12 respondents from areas of the state that are served by large investor-owned utilities. Commission staff also discussed potential housing impacts from the current rule and proposed changes with faculty at the University of Wisconsin to inform this analysis.
IMPACTS: The proposed changes to Wis. Admin. Code § PSC 113.0803 are anticipated to impact the provision of housing in Wisconsin in the following ways: 1. Policies, strategies, and recommendations of the state housing strategy plan. Wisconsin’s Consolidated Plan calls for the expansion of safe, sanitary, affordable housing for low- and moderate-income homeowners and renters as well as improving the affordable rental housing and homebuyer opportunities for all households, especially those with severe residential cost burdens. Wisconsin’s Consolidated Plan also prioritizes increasing economic opportunity in Wisconsin’s communities, focusing on both workers and businesses.
The proposed rule changes would likely support the policies identified in the Consolidated Plan by increasing flexibility for building developers in adding new multifamily residential units to either new or remodeled buildings, creating a new meter waiver criteria path for certain low-income housing developments, encouraging the use of energy efficient equipment and renewable energy technologies, while adding consumer protections for tenants in those units. Developers have requested waivers of the rule to reduce costs associated with redeveloping existing buildings and modifying them for residential tenants, and the proposed rule changes clarify the requirements relating to those situations where buildings would not require the addition of individual electric meters. The changes may decrease costs for residential unit developers, which could increase the number of buildings that are built or renovated for residential use, often at rental rates that are targeted towards low- and moderate-income residents based on projects that have been proposed to date.
Other building developers have sought waivers of the rule to incorporate more modern heating/cooling technologies or on-site renewable energy to offset electric use by residents. The changes and increased clarity of the rule are intended to make it easier for developers to plan projects that will be in compliance with the rule, or identify those that could require a waiver from the Commission. The rule changes may potentially streamline the process of certain construction projects and reduce costs, increasing the likelihood of these residential projects being completed. Overall, it is unknown how many residential units would be created with the proposed changes to the rule, and how many of those units would target low- and moderate-income tenants.
2. The cost of developing, constructing, rehabilitating, improving, maintaining, or owning single family or multifamily dwellings.
The proposed rule changes could decrease the cost of developing, constructing, rehabilitating, improving, maintaining, or owning multifamily dwellings, as the cost of each individual electric meter may not be necessary for some projects that incorporate the systems necessary to demonstrate energy efficiency in compliance with the proposed rule. The proposed rule changes are not anticipated to have a substantial impact on the costs of single-family dwellings, as no proposed rule changes directly affect their development or construction.
When gathering information to conduct this Housing Analysis, Commission staff reviewed survey data from WHEDA as well as information provided by developers in the individual meter waiver request dockets that have come before the Commission to date. Survey responses provided information on costs relating to equipment, labor, supply chains, carrying costs, and building footprints. However, some survey responses provided missing or partial information on cost-related questions, and other responses provided varying data on cost impacts. As a result, survey data was not sufficient to support clear and representative conclusions about cost impacts across multifamily buildings statewide.
The Commission’s experience with waiver applications to date similarly provides a range of different information on cost impacts. In one waiver request docket to the Commission, the applicant stated that there was an anticipated 25 percent cost saving if allowed to use a single meter compared to most new construction apartments. In another waiver request docket to the Commission the applicant stated there was a 37.5 percent increase in the cost of the development if required to install individual electric meters in a building that was being redeveloped. The cost savings provided as dollar amounts range from $100,000 stated for one project to $3,000,000 stated for another project showing a dramatic range in potential costs as evaluated by developers.
The specific cost changes to the cost of developing, constructing, rehabilitating, improving, maintaining or owning single family or multifamily dwellings due to any changes to proposed rule changes are dependent on many different factors including costs of equipment at the time of purchase, potential supply chain issues at a given time, the labor market in a given area, and technological changes that could affect a building unit’s design, and therefore are indeterminate at this time.
3. The purchase price of new homes or the fair market value of existing homes.
Developers and builders of new single-family homes already install individual meters and no proposed changes to the rule would affect that process. It could be argued that if the costs of development and construction of multifamily residential buildings is lowered and the numbers of those units increase there could be a decrease in the purchase price of new homes or fair market value of existing homes. However, the effect of such an impact would vary depending on the existing or potential homeowner and local housing supply and demand. Given the wide range of variables and factors that can affect these areas and indirect nature of the potential impacts, it is unclear whether the proposed rule changes would substantially impact the purchase price of new homes or the fair market value of existing homes from either a local or a statewide perspective.
4. The cost and availability of financing to purchase or develop housing.
The proposed rule changes are not anticipated to directly impact the cost or availability of financing available to building developers as the rule changes do not affect financial institutions or interest rates. It could be argued that any impact of the rule changes that lower the cost of developments or reduce the construction time needed could improve the cost and/or availability of financing for building owners or developers. Responses to survey questions asking developers to try to quantify these impacts did not provide clear and consistent data and the impacts are indeterminate at this time.
a. The principal and interest on a mortgage loan that finances the purchase of the housing.
b. Closing costs and other costs associated with a mortgage loan.
c. Mortgage insurance.
d. Property insurance.
e. Utility-related costs.
f. Property taxes.
g. If the housing is owned and occupied by members of a cooperative or an unincorporated cooperative association, fees paid to a person for managing the housing.
Wis. Stat. § 16.301 (3) (b) defines “rented housing” costs as any of the following: a. Rent.
b. Utility-related costs, if not included in the rent.
As stated in the summary of this Housing Analysis, Commission staff worked with WHEDA staff to survey developers of multifamily housing projects in different areas of the state to try to ascertain what the range of anticipated impacts to housing costs could be as a result of the proposed rulemaking. Most survey responses did not provide precise quantitative data for questions relating to cost impacts to the housing or rental costs identified in Wis. Stat. §16.301(3)(a) and (b). One respondent out of the twelve that took the survey indicated that there would be a $25,000 savings if the development had a single meter compared to individual meters, but generally, the respondents did not provide sufficient data on cost differences to allow for a robust analysis of impacts. In applications for waivers from the individual electric meter rule, some developers have given information on cost differences for utility-related costs or impacts to rent. The number of applicants that provided quantitative data on these factors is limited, and the comparisons are difficult to apply more generally due to specific building characteristics, whether or not the development was intending to use renewable energy and the size of any such installation, and the specific rules associated with each utility. Due to the challenges with obtaining quantitative data on each specific factor, the potential cost changes to the housing costs as defined in Wis. Stat. § 16.301 (3) (a) and (b) due to the proposed rule changes are indeterminate at this time. 6. The density, location, setback, size, or height of development on a lot, parcel, land division, or subdivision.
The proposed rule changes are unlikely to significantly impact the density, location, setback, size, or height of development on a lot, parcel, land division or subdivision from either a local or statewide perspective. Some individual developments that have requested individual electric meter waivers from the Commission in the past have indicated that more space is needed to accommodate individual electric meters in multifamily residential buildings compared to a building that was permitted to use a single meter. The numbers of units reduced by the need to run additional conduit or install individual meters have not been provided by every applicant. One applicant stated two units would need to be removed from the proposed plan under a single meter in the case of a building remodel project. This indicates that although there may be some impact, the scale of the impacts may be limited.
7. The relative impact of the effects of the rule on low- and moderate-income households.
Comments provided in the individual electric meter waiver dockets before the Commission to date have highlighted housing shortages that have negatively impacted low- and moderate-income households. It can be argued that rule changes that facilitate the construction of new or remodeled buildings that provide multifamily residential units would benefit those households by providing either targeted housing at rents intended to be affordable, or by providing more housing stock generally and potentially lowering rent costs in an area. For example, one new justification for a waiver of the individual electric meter requirements is being offered for owners of new or rehabilitated multifamily buildings that have long-term regulatory agreements with state or federal agencies or authorities to provide affordable housing for qualifying low-income customers, such as through the Low-Income Housing Tax Credit Program if the proposed new building or remodel shows long-term cost savings to residents.
It could be argued that in cases where individual electric metering is not used, low-income tenants may not receive the same monetary amounts of energy assistance benefits and could be exposed to higher costs for their electric energy across a year. For example, although those customers may receive some forms of energy assistance without an individual electric account, crisis benefits are not available to low-income residents that do not have a direct pay relationship with an energy vendor such as an electric utility. However, it could also be argued that tenants that do not have individual electric meters do not pay the standard monthly charges for connection, potentially making up for the partial loss of some energy assistance payments across a calendar year. Any economic impact to a low- or moderate-income tenant would result from a range of factors including specific building characteristics, a tenant’s electric energy use, the rent or cost of utilities charged, and any potential economic assistance, and the comparison of those impacts to the economic impact that would be experienced if that same tenant had an individual electric meter is indeterminate at this time.
