SignificanceWe show that a simple and common price incentive is highly effective in reducing electric energy consumption (EEC). When EEC is billed and metered at the apartment level compared with when tenants have unlimited EEC included in the rent, annual EEC falls by about 25%. Moreover, the reduction in EEC comes almost exclusively from households with very high EEC before the policy change. The results suggest that most tenants benefit, whereas only a small group of free riders stand to lose from this policy change. The policy is cost-effective, with a cost per reduced kilowatt hour of US$0.01, and for each invested dollar, the social value of reductions in air pollution, including CO2, is $2.