"The lease says utilities included so I am off the hook." Often not.
Three different billing models hide behind the word "utilities" in a US lease. They look identical on the rental listing and they read identical in the boilerplate. The meter at your unit, not the lease, decides what you actually pay each month.
Direct-meter puts your name on the regulated utility account, which is the only model where you have full state PUC consumer protection. Sub-metered means the building reads a private meter and bills you; the regulator covers it in some states (NY, IL, MA) and not in others. RUBS (Ratio Utility Billing System, very common in multifamily and student housing) divides the master-meter bill across units by a formula, has no PUC protection, and the landlord controls the formula.
Knowing which model applies before you sign is worth hundreds of dollars a year, sometimes more. The rest of this page walks through the three models, what to check in the lease, how the deposit works, and the documentation a new utility will ask for.
The three-way taxonomy
The three US residential billing models for renters.
Read the meter at the unit, then read the lease. The two together tell you which model you are signing into.
Model 1
Direct-meter
Account in your name, with the regulated utility.
- Who reads the meter
- The regulated delivery utility reads the meter remotely (AMI) or on-site (older meters).
- Who you call to dispute
- You file complaints with the state PUC. Disconnection rules, deposit caps and payment plans all apply.
- How a deposit is waived
- Deposit waived with a credit check, a letter of guarantee, or 12 months of good-payment history at any US utility.
- Bottom line
- Full state PUC protection. Supplier choice in the 18 deregulated states.
Model 2
Sub-metered
A private meter the landlord (or a third-party billing firm) reads.
- Who reads the meter
- The building or its billing agent reads a sub-meter installed downstream of the master meter.
- Who you call to dispute
- PUC-regulated in NY, IL, MA, MD and a few others. Elsewhere disputes go to landlord-tenant court or small claims.
- How a deposit is waived
- Not regulated by the PUC in most states. The landlord sets the security under the lease, capped only by state landlord-tenant law.
- Bottom line
- No supplier choice in any of the 18 deregulated states. The building picks the supplier on the master account.
Model 3
Master-metered (RUBS or allocated)
One building meter, divided across units by a formula.
- Who reads the meter
- The regulated utility reads one master meter for the whole building. The landlord (or a third-party RUBS firm) divides the bill.
- Who you call to dispute
- No PUC protection in any state. Disputes go through the lease, small-claims court or HUD if it is federally assisted housing.
- How a deposit is waived
- No utility deposit because there is no utility account in your name. The lease security deposit is your only protection.
- Bottom line
- No PUC protection. Landlord controls the allocation formula (square footage, head count, fixture count, or flat).
Lease clauses, line by line
What to check before signing the lease.
Six clauses you will see in a US residential lease, what each one really means, and the one question that surfaces the trap.
| Clause in lease | What it means | What to ask the landlord | Red flag |
|---|---|---|---|
| "Utilities included" or "All utilities paid by landlord" | Master-metered building. The landlord pays the utility, you pay a flat rent. | Is the building master-metered or RUBS? If rents go up next year, will utilities still be flat? | A "subject to reasonable adjustment" clause means RUBS in disguise. |
| "Tenant responsible for all utilities" | Direct-meter. The account belongs in your name with the regulated utility. | Can I see the previous tenant's 12-month bill summary before I sign? | No flag, this is the cleanest model. |
| "Sub-metered electricity / gas / water" | Private sub-meter, the landlord or a billing firm bills you. | Who reads the meter, how is the rate set, and is the rate the same as the utility's residential rate? | A markup over the utility tariff is illegal in most states. Ask for the formula in writing. |
| "RUBS" or "Ratio Utility Billing System" or "allocated utilities" | Master meter divided by a formula. Common in multifamily and student housing. | What is the exact formula? Square feet, head count, fixture count, or flat? Is it disclosed in writing? | No PUC protection in any state. A bad formula adds $30 to $80 per month over a true direct-meter setup. |
| "Owner provides utilities at cost" | Pass-through. The landlord forwards the utility bill, sometimes with a service fee. | Will I see the original utility statement each month? Is there a service or admin fee on top? | An undisclosed admin fee on every monthly bill is the classic small-print trap. |
| "Common-area charges billed separately" | Your unit may be direct-metered, but hallway lighting and laundry-room energy are RUBS. | What is in "common areas"? A pool or an EV charger can change the math. | A common-area RUBS line that grows year-on-year deserves a written formula too. |
A lease that does not name the model in plain words is itself a yellow flag. Ask, get the answer in writing.
For renters without thick US credit
The deposit problem (and four ways out).
Most US utilities run a credit check at sign-up. If yours is thin, expect a deposit. These four routes get it waived in writing.
The default
The credit check is mandatory in most states
Almost every regulated US utility runs a soft credit pull when you open an account. A thin or no-history file triggers the deposit. Authorized by state tariff in every PUC-regulated state.
The cost
$100 to $300 per fuel is typical
Electricity is usually $100-200, gas is similar, both in a unit with electric heat can reach $400-500. Capped at twice the average monthly bill in most state tariffs.
The guarantor route
A landlord or employer letter waives it in many states
A signed "letter of guarantee" from a US-based landlord, employer or relative with established credit is accepted by most regulated utilities in NY, NJ, MD, MA, IL and the deregulated states.
The LIHEAP path
LIHEAP recipients are deposit-exempt at most utilities
Proof of LIHEAP enrollment (or state-equivalent) waives the deposit at most regulated utilities. Apply through your state DSS or community-action agency.
The hidden cost of sub-metering
Direct-meter vs sub-metered, side by side.
The same kilowatt-hour, billed two different ways, with two different regulators in two different consumer-protection regimes.
| Question | Direct-meter | Sub-metered |
|---|---|---|
| Who reads the meter? | Regulated utility (you can request a special read). | Landlord or a third-party billing firm. |
| Who regulates the price per kWh? | State PUC sets the residential tariff. | PUC-regulated in NY, IL, MA, MD. Lease-only elsewhere. |
| Can I choose a supplier in a deregulated state? | Yes (REP in TX, ESCO in NY, ARES in IL). | No. The building picks the supplier on the master account. |
| How do I dispute a bill? | PUC complaint, with a documented investigation. | Small-claims court or landlord-tenant board. |
| Is the deposit capped? | Yes, by state tariff (typically 2x avg monthly bill). | Not regulated. Lease security deposit is the only limit. |
| Is shutoff regulated? | Yes: cold-weather rules, medical-condition holds, payment plans. | In most states, shutoff is eviction territory, not utility law. |
The RUBS formula in plain math
A 100-unit building draws 100,000 kWh in a month. The master bill is $18,830 at the EIA US residential average of 18.83 ¢/kWh (March 2026). RUBS divides it.
By square footage: a 750 sq ft unit in a 75,000 sq ft building pays $188.30. By head count: a 2-person unit in a 250-person building pays $150.64. By fixture count: a 1-bathroom unit in a 150-fixture building pays $125.53. Three formulas, three different bills, same kilowatt-hours. Ask which one your lease uses, before you sign.
Paperwork checklist
What documentation you actually need.
The four items every US utility asks for, plus the one extra that turns the deposit into a credit.
Government photo ID
Driver license, state ID, or passport. Required by every regulated utility.
SSN or ITIN
Used for the credit pull. An ITIN works in most states if a deposit is paid.
Proof of address
A signed lease or a utility-acceptance letter from the landlord on letterhead.
Prior utility account number
Optional but powerful: 12 months of good payment at any US utility waives the deposit at most others.
Three lines to put in writing, in any order, with the landlord and the utility:
"Confirm in writing which billing model applies to this unit" (direct-meter, sub-metered or RUBS), and the formula if RUBS.
"Confirm in writing that the unit is direct-metered" when the lease says "tenant responsible", so the utility cannot redirect the bill back to the landlord later.
"Confirm in writing the deposit waiver path" the utility accepts (guarantor letter, LIHEAP enrollment letter, prior-utility letter).
Insider view
Four things most renter checklists skip.
Each one is the difference between a clean account and a $30 to $80 monthly leak.
Some states force the landlord to allow direct-meter
In NY, NJ and MD the regulator requires the building owner to let a tenant take service in their own name when the unit has an individual meter. Refusing is a PUC complaint, not a lease dispute. Ask the question, the right answer is "yes, in your name".
"Utilities included" rents are $50 to $100/month higher
Utilities-included rents almost always price the underlying utility plus a margin. The landlord pockets the spread, and the spread is wider in the South where summer cooling is unpredictable. A direct-meter unit at $50 less rent saves money even if the bill swings.
Sub-metered tenants cannot pick a supplier, anywhere
In any of the 18 deregulated states, supplier choice attaches to a utility account. A sub-metered tenant does not have one, so the building chooses on the master meter. The point is structural: ask before you sign if a fixed-rate plan matters to you.
LIHEAP and EAP treat allocated bills differently
Federal LIHEAP attaches to the household, but it can only be paid against a utility account. In a RUBS building the program admin will route the grant to the landlord instead, and sometimes refuse. Call the program admin before the move, not after.
Your six-step renter plan
What to actually do, in order.
Each step is one written exchange or one phone call. Most renters finish the list in under an hour, across two days.
Ask the landlord which billing model applies
Direct-meter, sub-metered or RUBS. Get the answer in writing, in the lease or a separate addendum. The single most important question on this page.
Find the delivery utility at the new address
Visit the utility directory by state and search by zip code. Your address decides the utility, not your preference.
Pre-run a credit check to know if a deposit is coming
Annual free reports at the three bureaus. A thin file means $100 to $300 per fuel, plan the guarantor or LIHEAP letter accordingly.
If sub-metered, ask for the formula in writing
Specifically: who reads the meter, what the per-kWh rate is, whether it matches the utility tariff, and what (if any) admin fee applies. No paper, no signature.
If direct-meter and deregulated, pre-shortlist a supplier
Browse licensed suppliers for your state. A fixed-rate plan locks the cents per kWh for 6 to 24 months. Decide before the utility puts you on the default rate.
Photograph the meter on move-in day
A dated phone photo of the kWh display is your only proof if the opening read is disputed later. Both fuels, both meters. Takes thirty seconds.
Before you call
The Selectra expert answers your renter questions.
Eight questions we get from renters every week, in plain language.
Yes, but indirectly. The lease names the billing model (utilities included, tenant responsible, sub-metered, RUBS), and the building's meter configuration enforces it. A "tenant responsible" lease in a master-metered building physically cannot put the account in your name, no matter what is signed. Always confirm with the landlord (in writing) which model applies before you sign.
Most US utilities ask for $100 to $300 per fuel (electricity, gas) when a credit check comes back thin. Larger deposits, up to twice your estimated monthly bill, are allowed in some states for credit-challenged accounts. The deposit comes back, with state-PUC interest, after 12 months of on-time payment or on the closing bill when you move out. The full breakdown is in our deposit refund guide.
Three common waivers: a letter of guarantee from your employer or landlord (accepted in NY, NJ, MD and most deregulated states), a letter of good-payment history from a prior US utility, or proof of LIHEAP enrollment (deposit-exempt at most utilities). An ITIN is enough to open an account in most states if a deposit is paid.
If the unit has an individual meter, the landlord typically cannot block you. In New York, New Jersey and Maryland the regulator forces the building owner to allow a tenant to take service in their own name. Refusal is a PUC complaint. If the unit is master-metered or RUBS, no direct-meter option exists, you are stuck with the lease model.
No. Supplier choice (REP, ESCO, ARES) attaches to a utility account, and a sub-metered tenant does not have one. The building picks the supplier on the master account. Even in the 18 deregulated states plus DC, this is a hard constraint. Direct-meter is the only model where a renter can choose a supplier.
No. RUBS is a private contractual arrangement under the lease, not a regulated tariff. State PUC consumer protections (disconnect rules, payment plans, deposit caps, billing accuracy standards) do not apply. Disputes go through small-claims court, the state attorney general's consumer division, or, if it is federally assisted housing, the HUD field office. Read the formula before signing.
Standard list: government photo ID, a SSN or ITIN, a proof of address (the signed lease or a utility-acceptance letter from the landlord), and the prior-utility account number if you want a good-payment-history deposit waiver. Allow 3 business days from the call to the meter being energized, more if the previous tenant has not closed out.
Yes, but you must call the program administrator (state DSS or community-action agency) within 30 days of the move with the new address and utility account number. LIHEAP attaches to the household, not the address. Note: if the new unit is master-metered or RUBS, there is no utility account to attach the grant to, and the program administrator will tell you whether the building qualifies for a EAP bill credit instead.