Submetering in California
Last reviewed by NES Editorial · September 2026
California requires submeters in new multifamily construction and sets billing rules for everyone else. Here is what applies to your property.
Submetering is common across California, and NES runs it end to end. We install nonproprietary meters that you own, read them every day, pay the master-meter bill, and bill your residents. Our compliance team tracks the California rules, set by the CA Civil Code · CPUC, so your billing holds up if anyone ever checks it. NES has worked this way since 1968, in more than 43 states.
Yes. Submetering is allowed in California, with some restrictions.
Water billing follows the California Civil Code and electric and gas follow the CPUC, and NES handles the requirements for you.
What submetering is
Submetering puts a meter on each unit and bills residents for the water, gas, and electric they actually use. The idea has been around since the 1920s. Today’s meters read wirelessly every day, so usage is accurate and leaks show up fast instead of on the next bill.
Why owners in California submeter
- Residents pay for what they use, so water consumption usually drops 15 to 30%.
- Leaks are caught within a day, not at the end of the month.
- Common-area usage is measured and billed accurately, not absorbed by the owner.
- Most installs pay for themselves within 12 to 18 months.
Submetering laws and rules in California
- Water submetering and billing are governed by California Civil Code Chapter 2.5 (Section 1954.201), in effect since January 1, 2018, and new multifamily buildings permitted on or after that date must have a water submeter for each unit under SB 7
- Residents are billed for their measured water use, and the owner may add a billing or administrative fee capped at the lesser of $4.75 per unit (adjusted yearly for inflation) or 25% of the water usage charge
- RUBS (ratio or formula) billing in California is a water and sewer option only, with restrictions, and is not allowed for electricity or gas, so those utilities are billed on submeters at the utility's own rate
- Submeters must be readable without entering the unit and must be reinspected and recalibrated on schedule, with tenant disclosures and a path to county sealer testing for disputes
- For electric and gas, a master-metered owner who submeters must charge residents the same rate the utility would charge directly, with no markup, under CPUC rules and Public Utilities Code Section 739.5
- NES tracks the Civil Code and CPUC requirements so your property stays compliant
Local rules can vary by city and county, and some cities set their own requirements, which NES verifies for your exact address.
Official sources: California PUC · Civil Code 1954.201 (SB 7) · Pub. Util. Code 739.5 · City of Alameda Rent Program
General information only, not legal advice. Confirm current rules with the CA Civil Code · CPUC or a qualified attorney.
NES submetering by city in California
Local submetering guides for California communities NES serves.
Submetering in California
See what your California property can recover.
Send us your master-meter bills and unit count. We’ll run the numbers on your actual property and reply within one business day with a clear, no-obligation estimate.