Power Pigs Will Pay

Commercial buildings are responsible for about 20 percent of the United States's greenhouse gas emissions; encouraging landlords and tenants to cut power is a great way to fight global warming. Problem is, many states have regulations which allow only one meter per building, and charges are generally divvied up by square footage. So even if Tenant A takes measures to cut electricity consumption (installing CFLs for example) but happens to have the biggest suite in the building, it'll get stuck with the biggest utility bill. And though Tenant B might lease offices half the size of Tenant A's, they will pay far less even if they are an energy hog and use more power than its green neighbor. It's a classic tragedy of the commons.

But last week California regulators moved to remedy that conundrum by allowing utility PG&E and building owners to install meters for each tenant. The idea is that "submetering" will provide an incentive for tenants to conserve energy by making them pay only for the electricity they actually use. Presumably, the other two big California utilities, Southern California Edison (EIX) and San Diego Gas & Electric (SRE), will be able to implement submetering as well.

PG&E and the Building Owners and Managers Association - which manages 600 million square feet of office space - have already agreed to implement submetering; estimates are that this agreement alone will eliminate the construction of a 320-megawatt gas-fired power plant. Conservation begins with the wallet; thanks for adjusting the rulebook. :: Green Wombat