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The Impact of Sub-Metering on Condominium Electricity Demand

Author

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  • Donald N. Dewees
  • Trevor Tombe

Abstract

Growing concern about the environmental effects of electricity generation is renewing demands for electricity conservation and efficient usage. With a substantial fraction of the population insulated from energy price signals in bulk-metered apartment and condominium buildings, some jurisdictions are considering mandatory metering of individual suites. This study analyses data from a Toronto condominium building to assess the impacts of suite (or sub-) metering. We estimate the aggregate reduction in electricity usage arising from sub-metering to be about 20%. Financial savings to residents are much smaller. We analyze large variations across units in electricity consumption after sub-metering finding that unit characteristics explain much but not all of this variation. We perform both private and public cost-benefit analyses of sub-metering and find that the social net benefits depend strongly on the value assigned to externalities from generation and that net social benefits may often be positive when private benefits to the residents are negative.

Suggested Citation

  • Donald N. Dewees & Trevor Tombe, 2010. "The Impact of Sub-Metering on Condominium Electricity Demand," Working Papers tecipa-407, University of Toronto, Department of Economics.
    • Handle: RePEc:tor:tecipa:tecipa-407
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    References listed on IDEAS

    as
    1. Donald N. Dewees, 2010. "The Price Isn't Right: The Need for Reform in Consumer Electricity Pricing," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 124, January.
    2. Donald N. Dewees, 2008. "Pollution and the Price of Power," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 81-100.
    3. Peter C. Reiss & Matthew W. White, 2005. "Household Electricity Demand, Revisited," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(3), pages 853-883.
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    Cited by:

    1. Moiz Masood Syed & Gregory M. Morrison & James Darbyshire, 2020. "Energy Allocation Strategies for Common Property Load Connected to Shared Solar and Battery Storage Systems in Strata Apartments," Energies, MDPI, vol. 13(22), pages 1-28, November.
    2. Brewer, Dylan, 2022. "Equilibrium sorting and moral hazard in residential energy contracts," Journal of Urban Economics, Elsevier, vol. 129(C).

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    More about this item

    Keywords

    electricity demand; electricity sub-metering; energy conservation;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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