The Meter Retrofit Checklist: Submetering an Existing Building

Submetering a new building is a design decision. Submetering a building that is already standing is a project: you are fitting meters into electrical rooms that were never sized for them, tracing plumbing that nobody documented, and switching tenants from one way of paying for utilities to another without disrupting their lives or your cash flow.

This guide walks through that project in the order it actually happens. Electricity gets the most attention because California regulates it most tightly, but water and gas follow the same sequence with different rules at each step. The full checklist is at the end.

Step 1: Confirm You Can Legally Bill

The question is not "can we install meters?" but "can we lawfully charge tenants based on what those meters read?" The answer differs by utility and by tenant type.

Electric, residential

Public Utilities Code §780.5 requires every residential unit built under a permit obtained on or after July 1, 1982 to be individually metered for electricity and gas, and utility tariffs read that as metered by the utility. In practice that means electric submetering is a retrofit option for older, master-metered apartment buildings and mobilehome parks. A newer apartment building already has utility meters on every unit; there is nothing to submeter.

Even for older buildings, the tariff sets the gate. PG&E's Electric Rule 18, for example, limits residential master-metering to customers that were master-metered on June 13, 1978 with electricity included in rent, or that were submetering at utility rates on December 14, 1981. SCE's submetered multifamily schedule (DMS-1) closed to new construction on December 7, 1981, and SDG&E's Schedule DS closed to new installations on December 13, 1981. Pull your building's service history and read the current tariff for your utility before you plan anything else.

Electric, commercial

In CPUC-regulated territory (PG&E, SCE, SDG&E), commercial tenants generally cannot be billed for electricity through submeters; the cost is absorbed in rent. SDG&E's Rule 19 states it plainly: "Submetering of non-residential service is prohibited." The main exception that matters to most owners is electric vehicle charging, which has its own tariff carve-outs (see our EV charging billing guide).

LADWP

The Los Angeles Department of Water and Power is not a CPUC utility, so Public Utilities Code §739.5 does not apply to it. LADWP's own Rule 18 prohibits resale but allows submetered pass-through for both residential and commercial units, at no more than LADWP would charge, with "no additional costs, fees, service charges… of any nature." If you allocate, you may only charge each tenant for the amount actually used. For commercial owners in Los Angeles, that makes a retrofit a real option where it would not be in SCE territory next door.

Water and gas

Water submetering in residential rentals is governed by Civil Code §§1954.201–1954.219, enacted by SB 7 and operative January 1, 2018. It carries its own disclosure and billing requirements, separate from anything in the electric rules; our SB 7 compliance guide covers them. Unlike electricity, water may also be allocated by formula, so a water retrofit is often a choice between submeters and an allocation you already run. Gas follows its own utility tariff; confirm with your gas utility before planning gas submeters, and note that §780.5's individual-metering rule covers gas as well as electricity for post-1982 residential units.

If you are unsure where your building lands, start with our landlord's guide to electric submetering, then get the answer in writing from counsel or the utility before spending on hardware.

Step 2: Gather Records and Bills

A retrofit is only as good as what you know about the building before you open a panel. Collect:

• At least a year of master-meter bills for every utility you plan to submeter. They show the rate schedule you are on today, which matters because electric tenants must be billed at the rate they would pay the utility directly.
• The rate schedule and account history, including any submetered or master-meter discount schedule the building is already on.
• Electrical single-line diagrams, panel schedules and permits, however old. Knowing which breaker feeds which unit before the survey saves hours of tracing.
• Plumbing drawings showing risers and how water reaches each unit.
• Leases and any utility addenda. How utilities are handled today, and what the lease says about changing that, shapes your cutover plan.
• A unit list that matches the physical doors. Every submeter must be labeled with the premises it serves, so this list becomes your labeling scheme.

If the building has accessory units, check how your utility treats them. Under PG&E's June 2025 Rule 18 update, for instance, a junior ADU is not a separate dwelling unit and does not require a separate meter.

Step 3: Survey the Site

The survey turns "should work" into a bill of materials. Walk every electrical room, meter bank, riser and mechanical space with the drawings in hand, and answer four questions.

Where do the electric meters physically go?

Look at panel and switchgear space first. Some buildings have room for socket meters or panel-mounted meters beside the existing distribution; others have none, and the practical answer is current transformers (CTs) clamped around each unit's feeders, reporting to a compact multi-circuit meter. Note clearances, the condition of the existing equipment, and whether any unit is fed from more than one panel, because each meter must serve exactly one tenant premises.

How does water reach each unit?

Water submetering is easy when each unit has a single supply line you can reach, and hard when a unit is fed by several risers. Map every supply point per unit, note where a meter can be fitted with isolation valves on either side, and flag shared fixtures such as laundry rooms and irrigation that will stay on the master bill.

How will the reads get out of the building?

Communications decide how much wall you open. Wired networks are robust where conduit already runs between meter locations. Where it doesn't, running new cable through finished walls is often the most disruptive part of a retrofit. Blueline's Meter Retrofit & Replacement service uses wireless LoRaWAN so existing buildings can move to automated reading without new wire, and it migrates buildings with a mix of meter brands onto one system. Survey signal paths early: concrete, basements and meter rooms deep in a structure are where wireless needs planning.

Where will the data live?

Decide now whether reads land on hardware you control or only in a vendor's cloud. If you ever need to defend a bill, the answer matters. Our API Trap guide explains why.

Step 4: Select Meters That Can Legally Bill

Business and Professions Code §12500.5 makes it unlawful to use a measuring device for commercial purposes unless its type has been approved, and "commercial purposes" includes any measurement a charge is based on. A submeter that drives a tenant bill is a commercial device. Build your specification around these requirements for electric submeters:

A note on standards: vendor sheets still cite ANSI C12.20 accuracy classes. Those classes have since been merged into ANSI C12.1-2024, so treat a C12.20 claim as a sign of meter quality, not as the legal test. In California, the legal test is the 1%/2% tolerance rule above.

Water meters used for billing fall under the same type-approval requirement, because §12500.5 covers any device a charge is based on. Choose models suited to your pipe sizes and the low flows typical of apartments.

Step 5: Certify Before the First Bill

This is the step owners most often learn about too late. Under 4 CCR §4027.5 (UR.2.2), before an electric submeter is used to bill, the owner must obtain written certification for each connection from the serving utility or its designee, and provide that certification to the county sealer of weights and measures.

Individual tariffs add their own conditions. PG&E's Rule 18 requires submeters to carry accuracy certification from a laboratory acceptable to PG&E and reserves PG&E's right to audit. Ask your utility what it needs, in what form, and build that paperwork into the schedule rather than after it.

Once meters are in service, the county sealer has authority to inspect and test them (Business and Professions Code §12210). Counties may charge up to $3 per electric submeter per year (§12240(g)), and under 4 CCR §4070 the maximum interval between inspections for electric submeters is 10 years. Budget for the fee and keep your certification file where you can find it.

Step 6: Install and Cut Over

Installation in an occupied building is mostly a scheduling exercise. Electrical work generally means de-energizing circuits, and water meters mean shutting off supply to the units involved. Plan around that:

• Group work into shutdown windows by panel or riser, so each tenant loses service once rather than several times.
• Give tenants notice of any service interruption and of the change in how they will be billed. What notice is required depends on your lease, your local ordinances and, for water, the SB 7 rules. Have counsel confirm the content and timing before you send it.
• Pull permits where the work requires them, and use licensed trades. Blueline's work is performed by electrical engineers and licensed electricians.
• Label as you go. Each meter gets its premises label at installation, matching the unit list from Step 2.
• Record a starting read for every meter at the moment it goes live. Those reads become the opening reads on each tenant's first bill.

Step 7: Commission, Then Run a Shadow Cycle

A meter that reads is not the same as a meter that reads the right unit. Commissioning proves the mapping:

• Confirm each meter reports, on schedule, through the communications path you chose.
• Verify the meter-to-unit mapping. Switch a known load on in one unit and watch it register on that unit's meter and no other.
• Check CT orientation and phase pairing. A reversed CT or a mismatched phase produces reads that look plausible and are wrong.
• Reconcile the sum of submeter reads against the master meter over the same period. The difference is common-area load and losses; if it looks unreasonable, find out why before billing.

Then run one full billing cycle in "shadow" mode: generate every tenant bill exactly as you would for real, but don't send them. Compare each unit against similar units and investigate outliers. This is recommended practice, not a legal requirement, but it is the cheapest point in the project to find a swapped label, a dead meter or a rate-table error.

Step 8: Set Up Compliant Billing

For residential electricity in CPUC territory, Public Utilities Code §739.5 sets the rules for the bill itself:

• Same rate as the utility. Each tenant is charged at the rate that would apply if they were served directly by the utility. The owner's compensation is the utility's master-meter rate differential, which is meant to cover the reasonable average cost of submeter service. There is no separate billing or administrative fee.
• Itemized bills. Bills are itemized like a utility bill, including opening and closing reads and rate blocks.
• Posted rates. The owner posts the applicable rate schedule, or its web address.
• Pass-throughs. Rebates and California Climate Credits are passed through to tenants pro rata.
• CARE. A submetered tenant cannot be refused CARE eligibility because other units in the complex are not submetered.

In LADWP territory, bill at no more than LADWP would charge and add no fees of any kind. For water, follow the SB 7 billing and disclosure requirements in Civil Code §1954.201 and following.

The practical consequence: when the utility changes its rates, your tenant bills and your posted schedule have to follow.

Step 9: Maintain the System

Under §739.5(d), the owner maintains the submeter system. A retrofit isn't finished when the last meter goes in; it is finished when you have a routine to keep it accurate:

• Watch for meters that stop reporting or read zero on occupied units, and fix them before they affect a bill.
• Keep meters within the 2% maintenance tolerance, and replace failed or drifting units with type-approved equivalents.
• Keep certification records, sealer inspection results and fee receipts together, ready for the next inspection.
• Re-label and re-certify when a meter is replaced or a unit is reconfigured.
• Re-check the rate table whenever the utility files new rates.

The Retrofit Checklist

Work through these in order. Each box should be ticked, with the paperwork filed, before you move to the next phase.

Frequently Asked Questions

Sources

All sources accessed September 2026.

• California Public Utilities Code §739.5 (master-meter billing of residential tenants) and §780.5 (individual metering of units permitted on or after July 1, 1982)
• California Business and Professions Code §12500.5, §12500(e), §12210 and §12240(g) (type approval, commercial purposes, sealer inspection and fees)
• California Code of Regulations, Title 4, §§4027–4027.5 (electric submeter tolerances, instrument transformers, labeling, UR.2.2 certification, UR.3.1 dedicated submeters) and §4070 (inspection intervals, as amended April 28, 2021)
• California Civil Code §1954.201 through §1954.219 (water submetering, SB 7)
• PG&E Electric Rule 18, including the June 2025 update on junior ADUs; SCE Schedules DMS-1 and DMS-2; SDG&E Rule 19 and Schedule DS
• LADWP Rule 18 (resale and submetered pass-through)
• ANSI C12.1-2024 (incorporating the former ANSI C12.20 accuracy classes)