New HUD Guidance on Utility Rate Reduction Incentive in Public Housing

Date Published: 
July 13th, 2023

HUD has published Notice PIH 2023-17, which contains new guidance on the Utility Rate Reduction Incentive (RRI) in public housing. The RRI provides additional Operating Fund grant formula eligibility to a PHA that undertakes a special and significant action to reduce its utility rate. Through the RRI, a PHA can realize additional Operative Subsidy savings by taking actions to reduce its utility rate. A PHA is permitted to retain one-half the annual savings realized from these actions.

Actions that could qualify for the RRI include, for example, actively working with the local utility company to create a special rate for the PHA, participating in a power purchase agreement, attaining lower rates by making energy efficiency investments, switching the fuels being used, or installing on-site renewable energy systems.

The Notice also details how the RRI interacts with an Energy Performance Contract (EPC). RRIs executed at the same time as an EPC are eligible to retain up to 100% of the savings (rather than 50% of the savings with the RRI alone) during the EPC repayment period when the EPC and RRI impact the same Asset Management Project and utility. Example scenarios and details on the approval process are also covered in the Notice.


View PIH Notice 2023-17 

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