Electricity Sub-Meter Billing: A Fair, Transparent Method for Landlords

In many Bangladeshi buildings, not every flat or shop has its own meter from the utility. A house built decades ago may have one main meter for the whole building; a market may have one or a few large connections serving dozens of shops; a landlord may have added rooftop rooms or a ground-floor shop that runs off the family's meter. In all these cases the landlord installs sub-meters to measure each tenant's usage and bills them separately. Done well, electricity sub-meter billing is fair and uncontroversial. Done carelessly, with guessed readings, an unexplained "per unit" rate or common-area costs hidden in tenants' bills, it becomes the most argued-about line on the monthly invoice.

This guide gives landlords, market owners and building managers a clear, transparent method: how sub-meters fit with the main meter, how to read them, how to calculate a fair per-unit rate, how to treat common-area consumption, what to show on the bill, and how to handle disputes and faulty meters. It includes worked examples with the arithmetic shown, a monthly routine and common mistakes to avoid.

How Sub-Metering Works

The utility, whether DESCO, DPDC, BPDB, a Palli Bidyut Samity (REB network), NESCO, WZPDCO or another distributor, bills the main meter registered in the owner's name. Behind that meter, the landlord installs sub-meters (often called check meters) on each flat's or shop's circuit. The utility does not read or bill the sub-meters; they are purely for dividing the main bill fairly among users.

The total consumption on the main meter should roughly equal the sum of all sub-meters plus common-area use (stairs, lift, pump, security lights, guard room) plus small losses in wiring. When the numbers do not reconcile, something is wrong: a faulty sub-meter, an unmetered connection or a reading error.

For a quick explanation of the term itself, see what an electricity sub-meter is.

A Note on Rules and Fairness

Electricity tariffs in Bangladesh are set through the regulatory process (BERC) and applied by the distribution company; residential tariffs are generally slab-based, so the per-unit price rises as monthly consumption increases, and bills also include fixed or demand charges and applicable VAT. When you pass electricity costs to tenants, the fair principle is cost recovery, not profit: tenants pay their share of what the utility actually charged. Utilities may also have their own rules on sub-metering, resale of electricity and connection categories; check with your distributor, and consider whether separate connections for each unit would be better.

Disclaimer: This is general guidance, not legal or regulatory advice. Tariffs, VAT treatment and utility rules change. Check your distributor's current rules and your agreements before setting a billing method.

Reading Sub-Meters: The Routine That Prevents Disputes

1. Fix a reading date, ideally matching the main meter's billing cycle, for example the last day of the month.
2. Read all sub-meters on the same day, and the main meter at the same time.
3. Photograph each meter showing the meter number and reading. Save photos by month and unit.
4. Record readings in a sheet or system: previous reading, current reading, units consumed.
5. Check for anomalies: a sudden jump or zero use when the unit is occupied.
6. Share the photo with the tenant on request, or attach it to the bill.

For prepaid main meters, which are now common in Dhaka, record the recharge amounts and the units delivered over the same period so you can calculate an average cost per unit.

Method 1: Average Cost per Unit (Simple and Fair)

The simplest fair method is to find the actual average cost per unit on the main bill and apply it to each sub-meter.

For example (illustrative): a building has one main meter serving four flats and common areas. This month's main bill is Tk 16,800 for 1,400 units (including all charges and VAT on the bill).

• Average cost per unit = Tk 16,800 / 1,400 = Tk 12.00

The sub-meters add up to 1,390 units against 1,400 on the main meter; the 10-unit difference (Tk 120) is line loss, which is normal if small. The common-area cost of Tk 1,560 can be shared equally among the four flats (Tk 390 each), including the owner's flat, or covered through service charge. Every tenant can check the arithmetic: their units, times a rate that is simply the main bill divided by main units.

Method 2: Proportional Share of the Main Bill

An alternative that automatically includes line losses is to split the main bill in proportion to each sub-meter's share of total sub-metered units.

For example (illustrative): using the same numbers, Flat 2A used 410 of 1,390 sub-metered units, or 29.5%. Its share of the Tk 16,800 bill is 410 / 1,390 x Tk 16,800 = about Tk 4,955, compared with Tk 4,920 under Method 1. The difference is Flat 2A's small share of line losses. This method always adds up exactly to the main bill, which some landlords prefer.

Why a Fixed "Per Unit" Rate Causes Trouble

Many landlords simply charge a fixed rate, such as "Tk 14 per unit", year after year. The problems:

• If the fixed rate is above the actual average, tenants are paying more than the real cost, which they will eventually notice.
• If tariffs rise, a fixed rate below cost means the owner quietly subsidises tenants, then has to announce a sudden jump.
• It hides how slab tariffs affect the bill: when the whole building's consumption is on one meter, the combined units may push the building into higher slabs than each flat would reach alone.

If you prefer a fixed rate for simplicity, review it against actual bills at least every few months, publish the calculation, and adjust in both directions.

The Slab Problem: Why Shared Meters Can Cost More

Because residential tariffs are generally slab-based, a single main meter serving four flats records four households' consumption together. The combined total falls largely in the higher-priced slabs, even though each household alone might have used mostly lower-priced units. Tenants on sub-meters can therefore end up paying a higher average rate than a neighbour with an individual utility meter.

For example (illustrative, with invented rates): suppose the first 300 units cost Tk 8 each and every unit above 300 costs Tk 13. A single flat using 330 units on its own meter would pay (300 x Tk 8) + (30 x Tk 13) = Tk 2,400 + Tk 390 = Tk 2,790, an average of about Tk 8.45 per unit. On a shared meter with 1,400 units, the cost is (300 x Tk 8) + (1,100 x Tk 13) = Tk 2,400 + Tk 14,300 = Tk 16,700, an average of about Tk 11.93 per unit. The same flat's 330 units would then cost about Tk 3,937 instead of Tk 2,790. These rates are not real tariffs; they only show the effect.

This is a strong reason to consider applying for separate utility meters for each flat or shop where possible. It also explains why tenants on sub-meters sometimes feel overcharged even when the landlord is billing at cost. Explaining the slab effect openly helps.

Separate Utility Meters vs Sub-Meters

If sub-metering creates this much work, why not give every unit its own utility meter? Often that is the better long-term answer, but both options have trade-offs.

• Separate utility meters: each tenant deals directly with DESCO, DPDC or the local distributor, pays their own bill (often prepaid), and benefits from lower slabs. The landlord is freed from reading, calculating and chasing electricity dues. The downside is the application process, connection costs and possible wiring changes, and the landlord must still ensure meters are not left with large unpaid balances when tenants leave (prepaid meters largely solve this).
• Sub-meters: cheaper and faster to install, flexible for rooftop rooms, small shops or subdivided spaces. But the landlord carries the main bill, the calculation work and the disputes.

A practical path for many buildings is to apply for separate meters for regular flats and larger shops, and keep sub-meters only for small or temporary spaces. Ask your distributor about eligibility and the process.

Markets and Commercial Buildings

In markets and shopping buildings, commercial tariffs, demand charges and generator backup complicate the picture:

• Separate grid and generator consumption where possible: generator power costs far more per unit (fuel, maintenance, operator) and should have its own rate based on actual generator costs.
• Demand or fixed charges on a large connection can be allocated by connected load or as part of service charge; be clear which.
• High-consumption tenants such as restaurants, cold stores and tailors with heavy machines should be individually metered without exception.
• Read shop meters after closing time on the same day each month, with the shopkeeper present if they wish.

For how electricity fits into overall common charges, see our guide to service charges in commercial buildings.

What the Tenant's Electricity Bill Should Show

A transparent sub-meter bill, whether printed or sent by SMS or app, should include:

• Unit or shop number and tenant name.
• Billing period and reading dates.
• Meter number, previous reading, current reading and units consumed.
• The per-unit rate and how it was derived (for example, "main bill Tk 16,800 / 1,400 units").
• Common-area share, if any, shown as a separate line.
• Total amount and due date.

Sample bill line: "Electricity, Flat 2A, 1-30 June: previous 12,400, current 12,810, units 410 x Tk 12.00 (main bill Tk 16,800 / 1,400 units) = Tk 4,920. Common area share: Tk 390. Total electricity: Tk 5,310."

Handling Disputes and Faulty Meters

When a tenant disputes a bill

1. Share the reading photos for both months.
2. Re-read the meter together with the tenant.
3. Check for new appliances such as an air conditioner or geyser, which often explain jumps in summer or winter.
4. Check whether the reading date was delayed, which adds extra days of use.
5. If a genuine error is found, correct it immediately with a credit on the next bill.

When a meter seems faulty

Signs include a meter that stops while power is clearly being used, readings that go backwards, or consumption far out of line with similar units. Replace faulty meters promptly with good-quality ones installed by a qualified electrician. For the disputed period, agree a fair estimate, such as the average of the previous three months, and record it in writing.

A Monthly Sub-Meter Billing Routine

Common Mistakes Landlords Make

• Estimating readings instead of actually reading meters.
• Different reading dates for different units, which makes reconciliation impossible.
• Charging a rate above actual cost and treating electricity as a profit source.
• Hiding common-area consumption inside tenants' per-unit rate without explanation.
• Ignoring large line losses, which may indicate an unmetered connection or theft.
• Cheap, unreliable sub-meters that fail or drift.
• Cutting a tenant's power over a disputed bill instead of resolving it properly.
• No records of readings and bills to support the numbers.

Final Thoughts

Fair electricity sub-meter billing rests on three simple ideas: read every meter carefully on the same day, charge a per-unit rate that reflects what the utility actually billed, and show your calculation openly. Add a clear policy for common areas, fix faulty meters quickly and, where possible, move towards separate utility connections. Tenants rarely argue with a bill they can check for themselves.

If you manage many sub-meters, doing the arithmetic by hand each month is slow and error-prone. Bariwala ERP includes sub-meter electricity billing: record readings per unit, set the per-unit rate, and add the electricity charge to each tenant's monthly invoice, with payments, receipts and due tracking in the same place. For the detailed maths behind different methods, see our Bangla guide on sub-meter bill calculation.