GUIDANCE
FOR DETERMINING UTILITY ALLOWANCES
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UA guidance outlined in HUD
Notice 2015-04 instructs owner/agents to establish a baseline for each
bedroom size once every three years. For two years after the baseline
submission, utility allowances for each bedroom size and each utility type at
the property will be adjusted by a state-specific increase factor called a
Utility Adjustment Factor (UAF). These factors will be published annually by
HUD.
Baseline Submission
Requirements
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Request utility
data from either the utility company or the tenant household for at least the
number of units determined by the sample size methodology detailed below.
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This must be done
for each unit type at the property;
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If the property
consists of multiple identical buildings (or buildings that are substantially
similar, then the sampling may be performed at the property level, encompassing
all buildings on a site. If buildings are not identical, the sampling must be
done for each bedroom size);
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If the analysis
is performed by a third party or the utility provider, the sample size
data/bills must be submitted;
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The data
collected must be for the same time frame;
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The data used must not be more
than eighteen (18) months from the contract anniversary date;
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Samples submitted
must be from units receiving Section 8 assistance;
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A unit should be excluded
from the sample if it:
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Is receiving an increased UA as a reasonable
accommodation;
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Has been vacant for 2 or more months. Units included
in the sample should have at least 10 months of occupancy; or
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Is receiving a flat utility rate as part of a
low-income rate assistance utility program.
NOTE: RHS/USDA Properties must comply with the requirements
outlined in HUD Notice 2015-04.
Number of Units
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Minimum Sample
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1 – 20
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All
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21 – 61
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20
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62 – 71
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21
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72 – 83
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22
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84 – 99
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23
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100 – 120
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24
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121 – 149
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25
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150 – 191
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26
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192 – 259
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27
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260 – 388
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28
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389 and above
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29
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Determine the
average utility cost for each bedroom size without removing any units from the
sample size beyond those excluded as indicated in (G.) above. Do not remove
the highest and/or lowest utility cost household when determining the average. The monthly cost of consumption is the NET COST after
the application of discounts (e.g. Solar Discount,
surcharges, transmission fees, etc..) HUD
has provided instruction that the California Climate credit should not be
considered as a discount. Do not reduce the amount of the Utility Bill by
the amount of this credit. Do not include late fees in
the monthly cost of consumption.
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A sample format
for utility allowance submissions, which includes built-in formulas to average
utility costs for each unit size, can be found here.
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A sample tenant
release form can be found here
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Provide an
explanation for any sample sizes that do not meet the required criteria
established in Notice
2015-04.
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Recommend the UA
amount to the contract administrator for approval.
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Follow the
requirements in 24 CFR Part 245.405(a) and 245.410 to notify tenants of a
utility allowance decrease.
Factor-Based Analysis
For the two years after a
baseline utility analysis is completed, the UA amounts for each bedroom size
and each utility type can be adjusted by the established Utility Allowance
Factor (UAF) in lieu of a baseline utility allowance.
After completing the
property’s utility analysis under the factor-based utility analysis method,
O/As should compare the adjusted utility analysis to their paid utilities over
the previous twelve months. If the results indicate a significant disparity
between the two, the O/A should complete a baseline analysis to help ensure the
allowance(s) provided are accurate.
When the factor-based method
is used to determine UAs, the O/A should submit their recommendation for the UA
amount to the contract administrator for approval.
Refer
to HUD Notice 2015-04 for more information about:
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Utility Allowance Changes Outside of the Contract Rent
Adjustment Schedule
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Allowances for New Construction or Substantial
Rehabilitation
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Administrative Procedures
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Requirements for Tenant Households
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Penalties for Tenant Noncompliance
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Voluntary Use of EPAs Energy Star Portfolio Manager
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Information Collection
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