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 the Fairfield & Westchester county region, landlords charge from $2.75 to $3.00 per square foot per annum in addition to the base rent. For tenants with 4,000 square feet or more, we strongly recommend installing an electric meter on the premises, as it measures actual consumption, typically from $0.75 to $1.25 per square foot. The cost to install a meter, about $4,000 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 electric 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.

Two bottom-line examples of the impact of a meter: a 10,000 sf tenant could save $122,000 over a seven year term, and a 20,000 sf tenant could save $350,000 over a ten year term.