Fixed electric charge vs. separate meter/sub-meter

In the large majority of cases, when a tenant pays a flat charge per square foot for  “tenant electric,” it serves as a profit center for the landlord.  In Fairfield County and Westchester counties,  landlords charge from $2.50 to $3.00 per square foot per annum in addition to the base rent.  For tenants leasing 4,000 square feet or more, we recommend installing a meter on the premises, as it measures actual consumption, typically from $.90 -$1.50 per square foot. The cost to install a meter, about $3,000 to $5,000, can often be negotiated as part of the tenant improvement allowance provided by a landlord.

The typical definition of tenant electric encompasses the lights and plugs within a company’s demised premises. HVAC and all other electricity consumed inside and outside the building is then covered in the building’s electric bill as part of the operating expenses.

Instead of installing a separate meter, landlords often substitute a sub-meter between their supply from the utility company and the tenant’s space. You would then receive a bill for your share from the landlord and should make sure to avoid paying a mark-up in addition to the utility company’s rates. So if you’re leasing 5,000 square feet, a submeter could save you up to $7,500 per annum, double that if you’re leasing 10,000 square feet.