Related New York Rate-Equity Issue: Master-Metered Multifamily Buildings

The completed WaterRatesNY Research Report focuses on the separate question of household occupancy in separately metered residential service. After publication, a deeper review of New York’s rate-design record led WaterRatesNY to examine an additional, longstanding rate-equity issue involving master-metered multifamily properties.

This supplemental review does not change the published Research Report. It addresses a different question: whether fixed conservation-rate blocks fairly account for the number of separate dwelling units served behind one master meter.

The Basic Issue

Veolia Water New York has a separate multifamily residential service classification for apartment, cooperative, condominium, two-family, multiple-dwelling, and similar properties where individual dwelling units are not separately metered and billed.¹

Under the current New York Rate District tariff, the multifamily consumption blocks are the first 20 CCF, the next 380 CCF up to 400 CCF, and usage over 400 CCF. The tariff states these as fixed consumption blocks for the multifamily service classification; it does not multiply the block volumes by the number of dwelling units served behind the meter.¹

This creates a straightforward rate-design question. As more apartments share one meter, more separate homes contribute to the total recorded consumption while the rate thresholds remain fixed.

Simple Illustration

Consider two master-metered properties:

• one with 4 apartments
• one with 40 apartments

Both share the same first 20 CCF lower-priced block.

If every apartment uses 5 CCF during the month:

• 4 apartments × 5 CCF = 20 CCF. The property’s total use fits within the first block.
• 40 apartments × 5 CCF = 200 CCF. The property uses ten times the amount contained in the first block, even though average use per apartment is exactly the same.

The difference is the number of homes sharing the meter—not greater water use per apartment.²

The Issue Has a Long New York Record

2016 — The County of Rockland Raises the Issue

In SUEZ Water New York’s 2016 rate case, Amawalk Consulting Group, testifying for the County of Rockland, questioned the proposed multifamily rate structure and the use of fixed 20-CCF and 400-CCF thresholds. Amawalk illustrated the concern with a two-unit property using 12 CCF per unit per month and a 20-unit property using only 8 CCF per unit per month. Under the proposal, the 20-unit property would nevertheless pay a higher average rate per CCF because more of the property’s aggregate usage entered higher-priced blocks.³

Amawalk also showed that a property using 500 CCF would face the same average rate whether that usage was spread among 40, 50, or 60 dwelling units, even though the average use per unit would differ. It recommended that the PSC direct the Company to examine conservation-based rate-setting options for multifamily customers using actual customer data, industry research and experience, possible rate structures, customer impacts, and billing requirements.³

2017 — The PSC Recognizes the Potential Issue and Orders Further Study

The Public Service Commission adopted the new multifamily rate design but expressly acknowledged Amawalk’s concern. The Commission noted testimony that a 100-unit multifamily property could experience an above-average bill increase because “the larger number of units brings the MFR usage more quickly to the higher rate tiers.” It also noted that the record did not demonstrate how many accounts fit the hypothetical and identified the rebate program and an updated classification study as available ways to address the potential issue.⁴

The Commission required SUEZ to file the new service-classification study by February 1, 2019. The Order stated that the study would address, among other things, whether the multifamily class should be divided into subclasses.⁴

2019 — The Black & Veatch Study

Black & Veatch completed the PSC-required study in January 2019. Its detailed multifamily analysis recognized the underlying rate-design relationship: all other things being equal, a master-metered multifamily property with a higher density of dwelling units will on average pay more per gallon because more of its aggregate usage falls into higher-priced tiers. The study also identified dwelling-unit occupancy—persons per dwelling unit—as one of several factors affecting multifamily water use.⁵

The study found a general tendency for water use per dwelling unit to decline as the number of units increased. But the available company data had an important limitation: SUEZ did not track the number of units per multifamily building, and Black & Veatch obtained dwelling-unit information for only “a few select multi-family properties.” The study also found substantial variation among properties with similar unit counts. Its detailed technical conclusion therefore stated that, given the low correlation in the available data, it could not be conclusively assumed that the inclining-block structure caused adverse impacts.⁵

The Executive Summary used stronger language, stating that because per-unit use tended to decline as building size increased, the higher per-gallon rate had “no adverse impact overall.” The two formulations are not identical and should not be treated as though the limited data conclusively resolved the rate-equity question.⁶

Black & Veatch ultimately recommended some service-classification realignment, including possible reclassification of two- and three-unit master-metered properties into the single-family class because their aggregate usage profiles were similar to existing single-family customers. It did not recommend a redesign in which the multifamily block thresholds themselves scaled with dwelling-unit count.⁶

2019–2020 — The Fixed Multifamily Blocks Continue

In SUEZ’s 2019 rate filing, witness Paul R. Herbert described the multifamily three-block structure as a continuation of the existing SWNY design. He explained that the blocks were larger than residential blocks because multiple families were served from one meter: first 20 CCF, next 380 CCF up to 400 CCF, and over 400 CCF. He also stated that multifamily rates did not rise as steeply as residential rates because multifamily usage was less seasonal.⁷

The Joint Proposal adopted in Case 19-W-0168 continued those 20/400-CCF multifamily thresholds while changing the prices charged within the blocks. The basic fixed-block structure therefore carried forward without a per-dwelling-unit redesign.⁸

2023 — Independent Technical Guidance and Renewed Rockland Comments

In February 2023, the Alliance for Water Efficiency advised the Rockland Water Coalition that many multifamily rate structures make at least part of the rate a function of the number of dwelling units. It stated that, in the absence of submetering, moving toward a per-dwelling-unit system is “a good step,” while also recommending ongoing analysis of actual water use and the intended purpose of the rate structure.⁹

In June 2023 comments in Veolia’s next rate case, Sierra Club Atlantic Chapter again raised both household-size and multifamily rate equity. On multifamily service, the comments stated that most multifamily buildings were not submetered, bills were issued per building rather than per dwelling unit, and larger properties could reach higher rate tiers even where use was essential indoor use. The comments proposed collecting dwelling-unit information from building managers or local building departments and adjusting the rate structure according to the number of units, citing the Alliance for Water Efficiency guidance and the earlier Amawalk example.¹⁰

2024 — Rockland Intervenors Ask for a Veolia Proposal

In a March 2024 post-hearing brief, Rockland intervenors stated that the multifamily rate-equity issue had received no response from either Veolia or DPS and asked the Commission to direct the Company, by the next rate case, to propose how multifamily rates could be made more equitable. The brief’s concluding recommendations again asked that Veolia propose an MFR rate adjustment in the next case.¹¹

A later Rockland intervenor brief listed “Revision of inequitable rates for MFR customers” among the subjects omitted from the Joint Proposal and the initial briefs filed by Veolia and Staff, and argued that waiting another four years would be irresponsible.¹²

2024 — The Adopted Rate Plan Retains the Fixed Blocks

The Commission’s May 2024 Order adopted a rate design whose Appendix 9 retained the same three multifamily block thresholds—0–20 CCF, 20–400 CCF, and over 400 CCF—through the rate plan.¹³

WaterRatesNY’s review of the final Order has not located an express Commission discussion deciding the requested dwelling-unit-based multifamily reform on its merits. The careful conclusion is therefore that the fixed-block structure remained in place and the dwelling-unit rate-equity question remained unresolved through rate redesign, rather than that the Commission expressly rejected the issue.¹³

Other Utilities Show a Different Approach Is Workable

WaterRatesNY is not proposing that New York automatically copy another utility’s formula. Current utility practice does, however, show that conservation-oriented multifamily tier volumes can explicitly account for the number of dwelling units behind a meter.

Santa Barbara, California. The City separates multifamily accounts into 1–4-unit and over-4-unit classifications. For both, its volumetric schedule states the tier volumes per dwelling unit: first 4 HCF per dwelling unit, next 4 HCF per dwelling unit, and over 8 HCF per dwelling unit.¹⁴

Pasadena, California. Pasadena Water and Power’s current variable-rate table identifies multifamily residential tier blocks as “Tier × Dwelling Unit,” with Tier 1 at 0–5, Tier 2 at 5–10, and Tier 3 over 10 HCF per dwelling unit.¹⁵

San Francisco, California. The San Francisco Public Utilities Commission’s current Schedule W-1B applies to multifamily accounts with two or more dwelling units served through a meter or bank of meters. Its FY 2026–27 schedule provides the first 3 CCF per dwelling unit per month at Tier 1, with additional water charged at the higher Tier 2 rate.¹⁶

These examples do not establish the correct block sizes, prices, or administrative rules for Veolia. They demonstrate the narrower feasibility point: dwelling-unit count can be incorporated into a conservation-oriented multifamily rate structure in actual utility practice.

What the Evidence Supports

The New York record does not establish one required multifamily formula. It does establish that the issue is longstanding; that the PSC recognized a potential relationship between dwelling-unit count and movement into higher tiers; that a Commission-required study later examined the relationship between dwelling-unit count and multifamily water use with limited unit-count data; and that the current Veolia rate structure continues to use fixed meter-level consumption thresholds.⁴⁵¹³

Experience elsewhere shows that a different approach is administratively possible: multifamily conservation blocks can be tied, at least in part, to the number of dwelling units served.¹⁴¹⁵¹⁶

WaterRatesNY therefore supports having Veolia develop a fairer multifamily rate structure for PSC review—one that meaningfully considers the number of dwelling units sharing a master meter while preserving conservation-oriented pricing.

The exact design should be based on current customer, usage, and cost data. Relevant implementation questions may include reliable dwelling-unit records, vacancies, common-area consumption, shared laundry, irrigation, mixed-use properties, and procedures for keeping unit-count information current. These are design questions to be examined, not assumptions about one predetermined formula.

This issue is separate from WaterRatesNY’s household-size proposal. Fixing one would not fix the other; each requires its own solution.