Wireless carriers depend on a continuous supply of electricity to operate their cell site equipment, and in many leases, that electricity runs through the landlord’s own service. Cell tower electricity reimbursement is the mechanism by which the carrier is supposed to pay for what it uses, but in practice these arrangements break down more often than they hold up. Property owners often end up subsidizing all or some of the carrier’s utility costs without realizing it. The problems start at lease negotiations and run through the life of the agreement, showing up in stale fixed fees, meters the landlord cannot read, and billing cycles that no one is tracking. A lease audit is often the first time a landlord learns how long these costs have been quietly accumulating.
The Case for Direct Metering
The cleanest solution to avoid electrical reimbursement disputes is to not enter the realm of electrical reimbursement in the first place. Landlords should require the carrier to obtain its own direct service account with the servicing electrical utility company. When the carrier has its own meter, it pays its own bills, and the landlord’s electrical service is never in the picture. It also means the carrier is not placing additional burdens and strains on your existing electrical system and capacity.
This is best addressed at the lease drafting stage, before the carrier has any equipment in place and while the landlord still has full negotiating leverage. Many standard carrier lease forms include a default right to submeter off the landlord’s existing service, and that provision deserves careful scrutiny rather than passive acceptance.
The temporary submeter is a particularly common trap. Carriers often request a short-term connection to the landlord’s electrical service while the site is being built out, representing that they will install their own direct service once the site is operational. Once connected, the incentive to spend money on dedicated lines and separate service largely disappears. Those temporary arrangements have a way of persisting well past any contractual deadline for the carrier to transition, and the landlord is left carrying the cost indefinitely.
What Landlords Cannot See
In a submetering arrangement, the carrier installs a submeter to track its own usage, and the landlord should be entitled to know what it reads. Access to that meter is frequently blocked. Carriers commonly house their submeters inside locked equipment cabinets or behind secured doors the property owner cannot open without carrier cooperation. Submeters should be visible and accessible to the landlord without requiring the carrier’s involvement, and leases should say so explicitly.
Even in leases where submetering is properly authorized and the carrier has agreed to reimburse based on actual usage, the landlord is often contractually responsible for reading the meter and generating the bill. That obligation is easy to neglect. Property managers with a full portfolio can let billing lapse for months or years, particularly when there is no automated process keeping the billing cycle on schedule.
Old-style submeters, such as E-mon D-mon meters, require someone to physically go to the meter, record the reading, and calculate the resulting bill. That process depends on the landlord or property manager maintaining a consistent schedule, and it frequently lapses.
Carriers are increasingly using third-party vendors to remotely read so-called “smart meters” or “smart submeters” and generate monthly reimbursement checks. The arrangement sounds streamlined, but those vendors are hired and paid by the carrier. Those vendors often make mistakes and omit line items from the electric bill, fail to account for seasonal rate adjustments, and miscalculate applicable taxes and fees. The landlord receives a check, but the amount may fall short of actual cost.
Some leases also include provisions stating that if the landlord does not send a bill or request a true-up or reconciliation within a defined period, typically a year, the carrier is not required to pay the charge or correct a prior underpayment. The burden of timely sending reimbursement demands and catching every billing error within that window falls entirely on the landlord.
Fixed Fees and Stale Numbers
A different category of lease avoids submetering altogether and instead charges the carrier a fixed monthly fee for electrical usage, often bundled with or paid alongside rent. These arrangements are simple to administer but tend to age poorly.
A figure that seemed adequate when the lease was signed in the mid-1990s has little bearing on what the carrier’s equipment actually consumes today. Wireless infrastructure has grown considerably more power-intensive with each successive network generation, and a flat monthly fee does not track that growth. A fixed fee of $200 per month may have covered costs in 1996. By 2026, the carrier’s actual usage is likely a multiple of that.
Rate Structures Make the Math Harder Than It Looks
Calculating actual electrical costs is harder than it might appear. Many commercial utility accounts are billed on time-of-use schedules, where electricity costs more during peak demand hours, or on tiered structures where consumption above a baseline triggers progressively higher rates. When a landlord does not know how much electricity the carrier is consuming at any certain time, or when the carrier’s load is added on top of the landlord’s existing usage, it can push the total bill into rate tiers the landlord would not have reached independently. The carrier should be reimbursing at the marginal rate its additional usage actually triggers, not the baseline rate the landlord would have paid anyway.
Utility bills cover demand charges, energy charges, baseline allowances, power cost adjustments, and a range of taxes and fees. Determining an accurate per kilowatt-hour rate means working through all of those components, not just dividing the total bill by total usage. Landlords who apply a simplified average rate often end up subsidizing the carrier without recognizing it.
What Landlords Should Be Doing
The best protection against all of this is a well-drafted lease that requires the carrier to establish a direct utility account from the outset.
For landlords with any submetering arrangement in place, the goal shifts to conducting regular audits of their carrier’s electrical usage and the reimbursements received against it. That means reviewing the utility bills, verifying the rate structure applied, confirming that every applicable charge category has been included in the calculation, and reconciling payments received against what was actually owed.
If you are unsure whether your cell tower lease adequately addresses electrical costs or whether your carrier is reimbursing you correctly, contact Coastal Tower Law to discuss your situation.