Utility commission wraps up investigation into submetering company

The BC Utilities Commission’s (BCUC) has now received all of the submissions related to its formal investigation of Wyse Meter Solutions, a private company that charges Nanaimo renters directly for water.

In March of 2022, Nanaimo resident Richard Pullano contacted The Discourse with a request for help. A company called Wyse Meter Solutions had installed a water submeter in his apartment to track tenants’ consumption in his rental building, owned by a real estate investment trust (or REIT) called Starlight. When a $495 bill arrived for water and sewage fees, he wanted to know why, so The Discourse investigated.

Read more The city provides water. These tenants want to know why they’re paying a private company for it.

The BCUC’s investigation deals solely with whether Wyse is acting as a public utility when it submeters electricity. As such, BCUC’s manager of communications could not speculate as to whether this would impact its water submetering services. Nonetheless, the decision could impact Wyse’s overall operations in the province.  

In BC Hydro’s final argument, submitted Feb. 22, their legal counsel states there are some exclusions to the Utilities Commission Act’s definition of what a public utility is. For example, an employer or landlord can provide electricity to their own employees or tenants if the commodity is not resold or used by others.

However they maintain that as “Wyse owns and operates equipment in British Columbia for the purposes of selling, delivering, and/or providing electricity to end users,” and those users are not their own employees or tenants, they are operating as a public utility which “simply means Wyse is subject to the BCUC’s regulation.”

BC Hydro points to Wyse’s own submission that their equipment meters the electricity usage within a building so that its use and associated cost (emphasis theirs) is then allocated to the resident.

Essentially if the equipment is used to bill users, and that sale wouldn’t happen without Wyse and their meters, then they’re selling it, BC Hydro argues. 

In their own final argument, Wyse deny that they “produce, generate, store, transmit, sell, deliver, or provide electricity,”and state that BC-Hydro’s own electric tariff — BC Hydro’s service agreement with customers — permits submetering and the resale of electricity.

The section of the tariff specifically pointed out by Wyse states that, so long as  the price is not increased from what BC Hydro would have charged, metered electricity may be resold to a customer’s tenant. However there is no mention of that resale being permitted through a third party operator like Wyse. 

So, is Wyse then operating in the capacity of a landlord? This is where things get interesting.

On Dec. 6, 2022, the Residential Tenancy Branch (RTB) waded into the investigation with a letter of comment from executive director Richard Rogers. 

The RTB believe the way Wyse and its clients (landlords) are operating is not in accordance with the Residential Tenancy Act (RTA), and the Branch “may also commence investigations into landlords’ actions and whether Wyse may be a landlord, as defined under the RTA, given its statements that it is acting on behalf of building owners,” writes Rogers.

Landlords do sometimes employ companies to perform services like property management or snow removal, Rogers acknowledges, but those costs are the responsibility of the landlord. 

He goes on to point out that the section of the electric tariff referred to by Wyse does not allow for a landlord to hire a service provider acting on their behalf, force tenants to sign a contract with them, and then charge the tenants for services the landlord is supposed to be paying.

“Under municipal bylaws, utilities such as running water and electricity are required for a building to be suitable for habitation,” states Rogers, and what tenants pay is intended as a reimbursement of the costs, not a way for the landlord to profit by charging extra, which is not allowed under the RTA. 

“​​If a tenancy agreement included a term that resulted in a landlord charging a tenant more for the utility than what the landlord pays, that term would likely be found unconscionable and, as such, not enforceable under section 6(3)(b) of the RTA,” writes Rogers.

One tenant who spoke with The Discourse received a disconnection notice from Wyse threatening to cut off their utilities if they didn’t pay the bill. However, landlords are not allowed to cut tenants off from essential services like electricity or water, Rogers adds.

Wyse also charges additional service fees to tenants for its submetering services. The RTA only permits landlords to charge tenants a service fee if the additional service is requested and not required under the tenancy agreement, writes Rogers.

In a reply to a request for information, Wyse states that they collect charges from tenants’ submeters and then remit them to the landlord but do not reconcile what the landlord actually owes to BC Hydro nor do they require the landlord to provide them their BC Hydro bill.  

“Thus it is likely that landlords (through their ‘service provider’ Wyse) are charging tenants more for utilities than what the landlord is actually paying on behalf of tenants to BC Hydro,” writes Rogers. 

Read more Utility commission launches investigation into submetering company, following report by The Discourse

Further, the Branch points to BC Hydro’s submission that whatever cost the landlord pays to BC Hydro for electricity is likely less than the collective electrical costs of tenants when added together, because of how BC Hydro calculates energy consumption (if more tenants are within “Step 1” energy use threshold amounts, they will collectively pay less, for example).

This situation is not a given, Wyse responded on Dec. 14. Because Wyse typically provides metering services throughout a building (it’s more cost-effective to install submeters throughout) there’s a single landlord who receives a bulk bill for the entire complex. Especially in buildings where some units consume more energy than others, Wyse’s rates based on actual unit usage may be less than what tenants would pay if billed based on a “formulaic square footage shared costs basis” from the bulk bill.

“Wyse bills based on posted rates that are approved by BCUC for BC Hydro. Further, Wyse does not bill tenants for the common areas (which they would be charged under a formulaic square footage shared costs calculation) so tenants are responsible only for their portion,” writes Malvina Sternak, Wyse’s legal counsel. “This means that their bills are typically lower than what the landlord would be charging them on a calculation basis. As noted above, the landlord does not recover the entirety of the bulk bill under the submetering model.”

“It is Wyse’s experience that tenants appreciate the opportunity to have access to submetering as an alternative to paying for utilities on a calculated basis,” writes Sternak. “Tenants who endeavour to follow the public policy goal of reducing energy consumption are more likely to be paying less in a building where energy costs are separately submetered.”

In response to the RTB’s concerns about the service fees and disconnection notices, Sternak writes: “Wyse is not aware of any prohibition of requiring tenants to enter into a separate contract with service providers, as is the standard practice with internet providers laundry service providers and public utilities in buildings that are individually metered.”

Further, to Wyse’s knowledge, they have never been the subject of a complaint to the RTB in relation to submetering services, Sternak writes.

Wyse’s final reply argument to final submissions in the proceeding was received by the BCUC on March 6. 

“The BCUC is now reviewing the reply argument from Wyse and will begin its deliberations shortly,” said BCUC’s manager of communications Krissy Van Loon, via email. “Once the BCUC has completed its deliberations, a decision will be issued and posted on the proceeding webpage.”

All submission and final results of the investigation can be found on this website.