Public Housing Energy Branch

HUD's Office of Public Housing Program’s Financial Management Division Energy Branch develops, implements, and manages energy and water efficiency incentive programs for PHAs including Energy Performance Contract (EPC), Rate Reduction Incentive (RRI), Small Rural Frozen Rolling base (SR-FRB), and the Utility Partnership Program (UPP), which provide alternative funding mechanisms to support Operating Fund activities and modernize Public Housing through the implementation of energy conservation measures.

The FMD Energy Branch also provides support and technical assistance to PHAs and other constituencies to improve utility management, reduce costs. In addition, the Branch implements controls to ensure accurate inclusion of energy incentives in the Operating Subsidy.

Energy Branch Incentive Programs

Program Overview

The Energy Performance Contract program (EPC) is a financing technique that uses energy and/or water cost savings from reduced energy and/or water consumption to repay the cost of installing Energy Conservation Measures (ECMs). EPC can pay for today's facility upgrades with tomorrow's energy and/or water savings. Performance contracting is used in other sectors, including federal facilities, schools, and universities.

In the Office of Public and Indian Housing Operating Fund EPC program, housing authorities may develop and implement cost-effective retrofits, or they may contract development and implementation with companies called Energy Service Companies (ESCOs) that work in this market and contract with institutional energy and/or water users such as housing authorities. ESCOs usually provide guarantees of success and ongoing measurement and verification of performance.

To Learn More

For more information about HUD’s Energy Performance Contract program please see below or contact us at PIHEnergyBranch@hud.gov


Program Notice


Guidance

General Program Guidance

Measurement & Verification (M&V) Guidance

Section 18 Guidance (Demolition & Disposition)

Section 30 Guidance(Security Interests / Encumbrances)

Related HUD Guidance


Checklists

Sample Documents


Technical Assistance Videos

Understanding the Measurement & Verification (M&V) Process
This training video explains how to measure and verify EPC savings, discusses the key information and documents involved in the Measurement & Verification (M&V) process, and provides instructions on calculating savings for various M&V options.

How Do Baseline Adjustments Affect My Subsidy?
This training video explains how a utility baseline is established, discusses different types of baseline adjustments and what is allowed by HUD, and covers examples of baseline adjustments.

What are Eligible Energy Performance Contract (EPC) Project Costs?
This training video explains eligible project costs for an EPC, the importance of project costs in an EPC, and how to calculate and allocate project costs as part of the M&V process.

How Do I Determine Frozen Rolling Base (FRB) Savings?
This training video defines the Frozen Rolling Base (FRB) incentive and explains how to calculate and request the FRB incentive.

How Do I Determine Resident Paid Utilities (RPU) Savings?
This training video defines the Resident Paid Utilities (RPU) incentive, explains how the RPU incentive can be used in an EPC, and provides example calculations for determining savings for RPU in the M&V process.

How Do I Determine Add-On Subsidy (AOS) Savings?
This training video defines the Add-On Subsidy (AOS) incentive, discusses the different types of M&V (Option A and Option C) which can be used to determine AOS savings, and explains how to calculate the lesser of project costs/savings and request the AOS incentive.

How Does the 75 Percent Rule Impact Savings?
This training video explains the regulatory basis of the 75 percent rule, how it applies to an EPC in relation to the FRB and RPU incentives, and how to minimize HUD recapture from the 75 percent rule through proper calculation of project costs/savings associated with these incentives.

What is Cross-Subsidization of EPC Incentives?
This training video explains the concept of cross-subsidization and how EPC incentives can work together to minimize HUD recapture and maximize EPC project performance.

Program Overview

The Rate Reduction Incentive (RRI) is a financial incentive for Public Housing Authorities (PHAs) that pursue special and significant efforts beyond what is required by statute and/or regulation to reduce their utility rate. PHAs are eligible for the RRI if a PHA takes action beyond normal public participation in rate-making proceedings, such as wellhead purchase of natural gas, administrative appeals, or legal action to reduce the rate it pays for utilities. PHAs with an eligible action may retain one-half (50%) of the annual savings realized from their actions, or 100% of savings if the RRI is done in conjunction with an EPC.

How to Apply

A PHA interested in pursuing an RRI is required to submit a request through the Operating Fund Web Portal for review. Applications for Funding Year 2025 can be submitted between August 5th, 2024 and September 30th, 2024. No applications will be accepted after that date.

Approval Status of the RRI Request

PHAs that receive an approval letter from HUD are eligible to claim RRI savings in their annual Operating Subsidy request provided that the action continues to result in a net savings to the PHA. Savings must be reported in the HUD Form 52722 by the initial submission date as identified in the Operating Subsidy notice for each eligible funding year. In order for a PHA to be eligible to claim an RRI, all PHAs must submit documentation of the savings to their FO no later than September 30th prior to the upcoming funding year.

To Learn More

For more information about HUD’s Rate Reduction Incentive program please see below or contact us at PIHEnergyBranch@hud.gov


Program Notice


Guidance

General Program Guidance


Technical Assistance Videos

RRI Training for PHA Staff

This training helps Public Housing Agency (PHA) staff learn more about the Rate Reduction Incentive (RRI). After the training, participants should understand RRI and be able to calculate rate reduction savings. Participants will also learn about the documentation required for inclusion in the RRI submittal and understand HUD's review process for the RRI.

Program Overview

Under the Small Rural Frozen Rolling Base program (SR-FRB) authorized by the Economic Growth Act, eligible small rural PHAs (defined as PHAs in predominately rural areas with 550 combined public housing units and housing choice vouchers) can freeze their three-year rolling base consumption level (RBCL) that is used to calculate Operating Subsidy grants.

Operation Subsidy Grants

Operating Subsidy grants for up to 20 years. All utility cost savings for the participating project and utility accrue to the PHA and can be used for any eligible public housing purpose (i.e., Operating Fund or Capital Fund eligible purpose) at the PHA’s discretion. This program is intended to incentivize PHAs to implement energy and/or water efficiency infrastructure investments to their properties.

Program Impact

Since the start of the program, HUD has enrolled 82 participants. The table below shows the number of new participants each year since the program began.

Since 2021, participants in the SR-FRB have saved approximately 68,700 Thousand British Thermal Units (MMBTUs) and 1.3 million gallons of water.

To Learn More

For more information about HUD’s Small Rural Frozen Rolling Base program please see below or contact us at pihenergybranch@hud.gov


Program Notice


Guidance

General Program Guidance


Technical Assistance Videos

Program Overview

The Utility Partnership Program (UPP) encourages PHAs, especially small- and medium-sized PHAs, to consider the potential benefits of implementing an Energy Performance Contract (EPC) in partnership with utility companies.

PHAs interested in pursuing an EPC may find that working with a utility company offers advantages including:

  • PHAs may find it advantageous to work with a utility company with whom they have an established, multi-year, preexisting relationship.
  • Utility companies, particularly those already working with Federal agencies, often have extensive experience with the Department of Energy’s Utility Energy Service Contracts (UESC) program—a program similar to HUD’s EPC-UPP program.
  • Utility companies need to manage and often reduce overall energy consumption in their service territory to avoid making costly investments to address growing capacity needs.
  • Many utility companies can implement both energy and water conservation measures through their energy services through performance contracting.
  • Partnering with a utility company may facilitate the use of alternate strategies to improve the economic feasibility of small- or medium-sized projects, which might otherwise not attract interest from financial institutions.
  • The UPP program offers a simplified approval and verification process for low-risk EPC projects.

To Learn More

For more information about HUD’s Utility Partnership Program program please see below or contact us at PIHEnergyBranch@hud.gov


Program Notice


Guidance

General Program Guidance


Technical Assistance Videos

Energy Branch News from HUD
Federal Resources

The following is a list of Federal Government resources and programs related to energy and water conservation and renewable energy.

Federal Energy Management Program (FEMP)

The Federal Energy Management Program (FEMP) works with its stakeholders to enable federal agencies to meet energy-related goals, identify affordable solutions, facilitate public-private partnerships, and provide energy leadership to the country by identifying and leveraging government best practices.

Better Climate Challenge (BCC)

The U.S. Department of Energy (DOE) is challenging organizations to set ambitious, portfolio-wide GHG emission reduction goals. This new effort provides additional opportunities for peer exchange and technical assistance to meet the urgent call to mitigate the impacts of climate change.

Weatherization Assistance Program (WAP)

The U.S. Department of Energy (DOE) Weatherization Assistance Program (WAP) reduces energy costs for low-income households by increasing the energy efficiency of their homes, while ensuring their health and safety.

Multifamily Weatherization of Public and Assisted Housing

On January 25, 2010, the Department of Energy implemented a new rule at 10 CFR 440.22 for its Weatherization Assistance Program. The rule was a result of a partnership between HUD and DOE on May 6, 2009, aimed streamlining the use of Recovery Act weatherization funds in HUD-assisted buildings.

State Energy Program (SEP)

The U.S. Department of Energy's State Energy Program (SEP) emphasizes the state's role as the decision-maker and administrator for program activities within their state that are tailored to their unique resources, delivery capacity, and energy goals.

SEP provides funding and technical assistance to states, territories, and the District of Columbia to enhance energy security, advance state-led energy initiatives, and increase energy affordability.

The Energy Department's 17 National Labs tackle the critical scientific challenges of our time - from combating climate change to discovering the origins of our universe -- and possess unique instruments and facilities, many of which are found nowhere else in the world. They address large-scale, complex research and development challenges with a multidisciplinary approach that places an emphasis on translating basic science to innovation.

National Renewable Energy Laboratory (NREL) - Buildings

Oak Ridge National Laboratory (ORNL) - Modeling, Clean Energy & Environment

Pacific Northwest National Laboratory (PNNL) - Sustainable Energy

Energy Star

ENERGY STAR® is the government-backed symbol for energy efficiency. The blue ENERGY STAR label provides simple, credible, and unbiased information that consumers and businesses rely on to make well-informed decisions.

Energy Star Portfolio Manager - Benchmarking

Portfolio Manager is an interactive resource management tool that enables you to benchmark the energy use of any type of building, all in a secure online environment.

Water Sense

WaterSense labeled products are backed by independent, third-party certification and meet EPA’s specifications for water efficiency and performance.

Rural Energy Savings Program (RESP)

The Rural Energy Savings Program (RESP) provides loans to rural utilities and other companies who provide energy efficiency loans to qualified consumers to implement durable cost-effective energy efficiency measures.

Build for the Future

Build for the Future empowers local communities to undertake initiatives focused on climate resiliency, energy efficiency, and renewable energy. It achieves this by providing critical access to funding opportunities, offering guidance materials, and fostering peer-to-peer knowledge sharing.

Contact Us

Energy Branch Contact Emails

To contact the Energy Branch or for information about the EPC, RRI, SR-FRB, or UPP programs. Email PHFMDEnergyBranch@hud.gov


Other Relevant HUD Emails

Public Housing Portal Help

Email PublicHousingPortal@hud.gov for questions about 52722/52723 submissions.

PIH Operating Fund General Questions

Email PHFMDFundingBranch@hud.gov

EPC Field Office Interface (for M&V Reporting Questions)

Email OPHDataTeam@hud.gov

Section 30 Question and Submissions

Email Ophisection30submissions@hud.gov

Question about Rental Assistance Demonstration (RAD)

Email rad@hud.gov