Under the new regulations, landlords can install smart sub-metering systems only if they have "express written consent" of each apartment tenant and use a licensed technology provider.
"The tenant's written consent must be voluntary and informed," according to the decision from the Ontario Energy Board, which said an energy audit of an apartment unit must first be conducted by an independent third party. "Additional details, such as a corresponding rent reduction, must be provided."
Until now, installations have never been technically legal under the Electricity Act, but in anticipation of the rules many landlords went ahead anyway. Over the past two years it's estimated that more than 50,000 smart sub-meters have been installed in apartment buildings.
The energy regulator cracked down in March after there had been complaints of landlords putting the devices in their buildings without properly consulting with tenants or getting their consent.
The new regulation now makes it clear when a landlord is following or breaking the rules.
The devices, according to proponents, are meant to encourage energy conservation within apartment buildings. Most buildings today have a central bulk meter, meaning the landlord gets a single bill and splits the total between all tenants by including it as part of monthly rent.
But by installing smart sub-meters in individual apartment units, a landlord can bill tenants for what they use and reduce rents accordingly. The idea is that apartment residents, by seeing their own energy use and being able to take advantage of time-of-use pricing, will be more encouraged to conserve.
It also means if you run a home office and use a lot of power, you can no longer spread that cost to another tenant that's hardly home and uses little electricity.
"I think they found a nice balance," said Jennifer Hassani, a spokesperson for Ottawa-based sub-meter manufacturer Triacta Power Technologies Inc., which saw sales fall after the energy regulator's March warning.
The new rules will be a boost for Triacta and other makers of sub-metering equipment. The energy regulator also ruled that equipment that had previously been installed without authorization may remain, and that any complaints from tenants should be directed to the Landlord and Tenant Board.
Energy and Infrastructure Minister George Smitherman told the Star in May that he was planning to introduce a bill this fall that would establish firm rules for sub-metering in apartment buildings.
Keith Stewart, an energy expert with WWF-Canada, commended the energy board for bridging the gap until a new law goes into effect.
"The board has put in place a good interim policy that protects consumers and the environment, while providing some good advice to the government as it prepares the legislative response that both the board and the government acknowledge is necessary," said Stewart.
The idea of creating a mandatory audit, he added, will also give tenants a better idea of how efficient or inefficient their appliances, windows, and doors might be so their consent if they choose to give it is informed.