Utility Pricing with sub-metering

Hi there everyone, this is my first post so bear with me if I make any mistakes as far as forum rules go!

Recently, my immediate family acquired a mobile home / Rv park combination. My question is in regards to the utilities that are paid on the mobile home side, specifically water. Averaged over 3 months, the water consumption was 596000 gallons per month from 82 mobile home, totaling 7268 gallons per home per month usage. We submeter this usage and charge a flat fee for anything under 2000 gallons, as decided by the city. The city however has a tiered system that charges different rates based on consumption. Currently, usage over 50000 gallons is charged at a rate of $2.15 per 1000 gallons but we charge a flat rate of $1.29 per 1000 gallons for everything over 2000 gallons. Can this rate be amended to reflect the 50000+ gallon rate because that’s what tier the majority of water usage falls into, or would that be a welcome opportunity to bring litigation against the park?

I would talk to the city, the public utility commison if one exsists, and your attorney. Did the city approve of your overage charge of $1.29? Where did that number come from?

The general rule is you are not allowed to profit from pass through billing but every jurisdiction is different.


A couple of issues:

Water/Sewer Rates: Depending on what state your MHP is located you may need the rates you charge your residents approved by the state’s Utility Commission; not that big of a deal; or you may be in a state that is regulated exempt. Regardless you should have a clear simple Rate Sheet available to your residents; and attached to all new leases.

Tier Rates: The idea is to promote water conservation and fix plumbing leaks. While you can typically pass through the tiered marginal increasing rates; that mechanics are somewhat cumbersome. The tiered rates are for the whole park, therefore they do not kick in till the whole park reaches the tier point, regardless of individual usage of each MH. So basically when the MHP exceeds the (say) 50,000 gallon tier point then those users exceeding their prorate of 50,000 gallons are charged the marginal increased rate. Enough said: In our 25 years of sub-metering experience, most Utility Commissions would rather approve an average cost per 1,000 gallons applied uniformly, regardless of tiers rates established by the municipal supplier.

Please give me a call about any specifics, We’re here to answer your water sub-metering questions.

Dan Helton
Southern Water Management