ABCs of Energy Accounting

The following information has appeared in several past Newsletters and also the “Winter Reminders” mailings to all unit owners. It is also presented to prospective buyers who must sign off on it prior to purchasing a unit.

Prospective owners should understand clearly the “ABCs of Energy” before joining the Association. Eagle Bay is different from other condos where each unit owner has their own heating boiler and domestic hot water (DHW) heater. At Eagle Bay all residents in each building share a common boiler and common DHW system. The heating pipes and DHW pipes are entirely separate from each other. The heating system has its own continuous pipe system that loops throughout the entire building. It loops around from unit to unit, and then back to the common boiler. The DHW system too, has its own continuous pipe system that loops around from unit to unit and then back to the common DHW heater. Owners should never entirely turn OFF their heating thermostat (or electricity which powers the heating zone valves inside their units) when away during the heating season. They run the risk of freezing their heating pipes by doing so.

An Energy Formula Based On Variables

Direct metering was installed by the builder to bill for the heat and DHW used by each individual unit owner. It never functioned properly. Therefore a formula has been in place for over 30 years now. It recognizes that unit owners set their thermostats at different settings; and unit owners utilize different amounts of hot water. Neither can be metered in an individual unit, therefore a formula applies.

The Managing Agency allocates separate heat and DHW costs to each unit in each building according to a formula based on (1) the approximate size of each unit as per Schedule B of the By-Laws recorded at the County Registry of Deeds, and (2) the number of residents in each unit. Based on the month of the year, the formula assigns percentages of gas usage for heating versus DHW (see below).

Seasonal Splits

In the four months from May through August, when there is no heating demand, all usage is assumed to be for DHW based solely on occupancy. In December and January, heating is 85% with DHW at 15%. In November and February, heating is 80% with DHW at 20%. October and March are split 70% and 30%. September split 40% and 60%. April is split 50% and 50%.

Con Ed Invoices Show Charges For The Prior Month, Not Real Time

It is very important to understand that the billing from the Agency to each owner (called “Energy Charge” on the monthly statement) is not calculated on a real-time basis. There is a time lag with the billing system. Therefore, we can have a month of intense cold weather but owners will not be charged until a month and a half later. For example, an energy charge bill dated January 21 would cover the period of December 8 through January 7. The allocation of cost for each unit is billed to unit owners in February (about a month and a half lag time).

The Billing Process

For each building as a whole, Con Ed gives Barhite & Holzinger (B&H) a lump sum total invoice for natural gas bill. It combines both heating and DHW. Immediately upon receipt, B&H pays each bui|ding’s invoice. The invoices show charges for the prior month, not the same month the invoice is received. So, there is always a one to two month time lag until the “actual” bill for any particular month can be determined, with billing debit/credit adjustments being made by the Managing Agency.

Upon receiving the Con Ed invoices, B&H begins the process of breaking down each buiIding’s total lump sum gas invoice into smaller, proportionate shares for each individual unit. Thus, a formula-based charge that combines heat and DHW is then added onto each individual owner account. It appears as a dedicated line item called “energy charge.” It is separate from common charges.

When the con Ed invoices are not yet available or processed, B&H bookkeeping will use the prior month’s Con Ed gas invoices; or they will estimate the charges. In those cases the estimated amounts are reconciled and adjusted accordingly in the following month (based on the actual charges from con Ed). This occurs when the Con Ed invoice is not available in time to make the calculations (as could occur, for example, at the end of November when the individual billing is prepared early because of thanksgiving holidays since owner bills for December
are produced prior to Thanksgiving).

An example of how the process typically works.

  • in January energy is used by individuals at Eagle Bay
  • in February B&H receives the Con Ed invoice for January
  • the invoices are analyzed
  • the energy charges are applied to individual owner accounts
  • at the end of February statements are sent to owners
  • starting March 1st owners send money to Eagle Bay (for energy used in January).

Residency Charges Affect DHW, not Heat Charges

Number of residents per unit affects DHW but not heating charges. Residents must report any residency changes in their unit or building to Helen Ashe (extension 309) at the Managing Agency, Barhite and Holzinger so that the Agency can make adjustments to the billing. The on-site Resident Manager also informs the Managing Agency of all residency changes he sees.

Common Charges Include Boiler and DHW Heater Maintenance, Including Zone Valve Services.

Unlike other condos where unit owners have their own heating boilers and hot water heaters inside their individual units, common charges at Eagle Bay include the following:

  1. Heating system maintenance service and emergency response from a qualified Resident Manager.
  2. Zone valve repairs and maintenance (not including thermostats or transformers inside units). The zone valve is the small red box located atop a heating pipe inside a unit.
  3. Boiler and hot water heating system repair and maintenance, including heating pipes. The exception is exposed interior heating pipes (e.g. baseboard heating). Domestic hot/cold water plumbing within a unit (kitchen sinks, sink waste disposals, bathroom vanities, showers, and bathtubs) is also the sole responsibility of the unit owner.

The above services can up to very significant total costs if they were to be borne by individual owners in charge of their own heating and DHW systems at a 30 year old property such as Eagle Bay. Eagle Bay is one of the very few condos in the area where such is the case. Eagle Bay owners enjoy substantial benefits by being relieved of the responsibility to purchase their own fuel, purchase their own boilers and DHW systems and maintain these systems 24/7. This is especially true when emergency maintenance and trouble shooting are required, and contractors are reluctant to respond immediately to service small, individual clients without surcharging. Additionally, Eagle Bay’s Management Company, Barhite & Holzinger, continually shops for natural gas resources in the commodities market, however, Con Edison charges Eagle Bay a fee to use their
distribution lines into Eagle Bay, regardless of where the Association buys the actual gas product.