How To Use the HUD Utility Schedule Model

This webcast is a demonstration of how to
use the HUD Utility Schedule Model to calculate utility allowances for HOME-assisted rental
projects. It will cover:
The HOME regulatory requirements for calculating a utility allowance;
The steps involved in using the HUD Utility Schedule Model;
A demonstration of actual utility costs being entered into the Model; and,
A list of HUD resources available to participating jurisdictions (PJs). According to the HOME regulation at 24 CFR
92.252(d)(1): A PJ must establish maximum monthly allowances
for utilities and services and update the allowances annually. This applies to HOME-assisted rental projects
where tenants pay utilities directly. A PJ must use the HUD Utility Schedule Model
or otherwise determine the utility allowance for the project based on the type of utilities
used at the project. HOMEfires Vol. 13, No. 2 was published in
May 2016. It makes clear that:
Under the HOME Rule, PJs are no longer permitted to use the utility allowance established by
the local Public Housing Authority for HOME-assisted rental projects. HUD made this change because the methods used
by PHAs to establish these utility schedules vary across the country and, therefore, may
generate inconsistent or inaccurate allowances. This applies for projects to which HOME funds
were committed on or after August 23, 2013. Projects to which HOME funds were committed
before the effective date of the Rule may continue to use the PHA utility schedule. The option in the regulation to otherwise
determine the utility allowance for the project based on the type of utilities used at the
project means that, if PJs choose not to use the HUD Utility Schedule Model, the UA must
be established using a project-specific methodology. This presentation focuses on the HUD utility
schedule model. It does not review the other acceptable methods
for calculating a HOME utility allowance. HOW THE HUD UTILITY SCHEDULE MODEL WORKS
The HUD Utility Schedule Model is based on the Department of Energy�s Residential Energy
Consumption Survey (RECS). RECS provides the only available national
data on actual home energy consumption. The model provides consumption estimates tailored
to local weather conditions. The PJ will supply local utility prices (also
known as tariffs). The model then produces utility schedules
in the HUD 52667 format and can produce utility allowances when tenant paid utilities and
unit size are identified. There are two versions of the model an excel
template and a web-based model. The order of information is slightly different,
but in both cases the basic steps in using the model are to:
Select a location. Enter building and unit characteristics. Enter tariffs and utility taxes or fees for
each type of utility. Review utility schedule for reasonableness. Review utility allowance for a particular
unit size. The majority of the effort in using the model
is in entering the utility rates. A PJ should use their best judgement in determining
the local utility rates and taxes. If there are a number of utility providers
in the area, a PJ should ensure that rates for the correct utility provider were entered
into the model before using an allowance for a particular HOME project. If the same utility providers and rate schedules
apply to multiple HOME projects within the same jurisdiction, the PJ can use the same
schedule as long as the projects have the same characteristics including size, type,
and energy efficiency. The utility tariffs that can be entered into
the model are electricity (standard or special), natural gas, fuel oil, liquefied petroleum
gas (LPG), water, and sewer. Other fees listed toward the bottom of the
model such as trash and appliance fees are not applicable to HOME because they are not
part of the definition of a utility for the purposes of the HOME utility allowance. Most utility companies allow you to download
a utility tariff or rate book from their website. However,
Oil price quotes and LPG (also known as propane) prices may need to be obtained directly from
the local company by telephone. If possible, it�s useful to obtain a utility
bill for the project (or for a similar project) to confirm that the correct rate schedule
is being used and which taxes or fees are charged. Some utilities describe taxes in the rate
book and some do not, so the example bill will clarify. A PJ should pay careful attention to the units
of measurement. If necessary, PJ can use a conversion table
found online to convert units found in the rate book to what is used in the model. The PJ should also pay attention to whether
the utility is billed in dollars or cents, as the model uses dollars. In addition, if the utility is deregulated
and multiple companies are involved in providing the service, the PJ will need to add the charges
for each and enter the combined total in the model. Or, if the utility company has multiple rate
blocks (which is a stepped or tiered rate), then the charges will need to be combined
for each rate block. The demo will illustrate this point. Moving on to the demonstration, let�s take
a look at the model, starting with the Location section. Begin typing the zip code in the Search for
PHA or Zip field and a list of zip codes will appear. Your selection will populate the Selected
PHA or ZIP field. The Form Date field will be automatically
populated with that day�s date. The show details button brings up a table
with the climate data. HDD is a heating degree day, which is a measurement
designed to reflect the�demand�for�energy�needed to heat a building related to measurements
of outside air�temperature. CDD is a cooling degree day, which reflects
the amount of energy used to cool a home or business. A PJ doesn�t need to enter anything related
to the climate data, the model will use the correct data based on the chosen location. The next section is Unit Information, which
includes both building characteristics and unit type. The Unit Type drop down is the building type
(single family or multifamily) and size. The number of bedrooms drop down allows a
user to select the unit size utility allowance that the model will calculate. The Electric Tariff is either Standard or
Special. A Special Electric Tariff is only selected
when the utility company has a special discounted rate for customers that heat with electricity
and only use electricity and no other source of energy in their homes. So Standard Electric Tariff will be selected
in most cases. A/C Allowance is usually included, depending
on the location and climate. And, Energy Savings Design is only applicable
if the project meets an energy efficiency standard. Moving on, the actual allowance section is
relevant to the determination of a utility allowance. If selections here are left blank, the model
will still produce a utility schedule, but not an allowance for the unit type selected
above, in this case the two-bedroom unit. A PJ can choose the applicable utility from
the dropdown for each category. The remainder of the model is for a PJ to
enter utility rates. Each tariff section has a similar structure. The first type of utility listed is the Standard
Electric Utility Tariff. The model has columns for current and previous
utility rates. Only the entries under current rate are modeled,
so a PJ can leave the fields under previous blank. The purpose of entering the pervious rates
would be to view the change in utility prices. As you can see, the user should start by entering
the name of the utility company, the name of the rate schedule, and the effective date
of those rates for documentation purposes. If applicable, different utility rates can
be entered for summer and winter months. If the rates are not seasonal, a PJ should
enter January for the first month of summer and December for the first month of winter. In this case, utility rates should only be
entered in the summer blocks. If the tariff is seasonal but starts mid-month,
make sure that the number of summer months in the rate schedule and the number of summer
months in the model are equivalent. The number of months is more important than
the start month. The other fields in this section are the monthly
charge, which may be called a service charge or a minimum customer charge, the rate blocks
for summer and winter, and the cost of the rate blocks for summer and winter, and the
extra charges, or taxes and fees. The difference between a monthly charge and
taxes or fees is that the monthly charge is a flat fee, whereas the taxes and fees are
entered either per unit of usage or as a percentage. Here is an excerpt of the Residential electricity
rates for Arlington, Virginia. The electric rates are different for summer
and winter months. The billing months shows that June is the
beginning of the summer billing cycle and October is the beginning of the winter billing
cycle. The rates are billed as cents per kilowatt-hours,
so these rates will need to be converted to dollars per kilowatt-hours before being entered
into the model. In addition, the rate schedule shows separate
charges for electricity distribution, generation, and transmission. Because these charges are not input separately
into the model, they will need to be combined. In order to calculate the electric rates for
the model, I have entered the rates on an excel spreadsheet. Here, I�ve already converted the rates to
dollars. the rates to dollars.
It�s a best practice for PJs to document each source and each decision about how to
calculate the rates. This provides a basis for evaluating the results and will help when
the PJ recalculates the schedule each year. The monthly charge, called basic customer
charge of $7 can be entered into the model. First we should record the first and last
months of summer – June and September, because October was the first month of the winter
billing cycle – and then we can record the $7 monthly charge.
Next, both distribution and generation have separate rates for the first 800 kilowatt-hours
of usage and over 800 kilowatt-hours. This is known as a stepped rate, or in the model
it is called rate blocks. We need to input two rate blocks: 0-800 kilowatt-hours,
and over 800 kilowatt-hours, for both summer and winter. After typing 800 in the first
block, the word remainder will appear in the next rate block, which will represent over
800 kilowatt-hours. This needs to be repeated for winter as well.
Now, we need to determine the cost for each block in both summer and winter.
For the first rate block, we need to add the rate for the first 800 kilowatt-hours for
distribution and generation, as well as the rate for transmission which applies to all
kilowatt-hours. The total cost for the first blocks for both summer and winter can be entered
into the model. For the second block rate, we need to add
the rate in excess of 800 kilowatt-hours for distribution and generation, as well as the
charge for transmission which applies to all kilowatt-hours of usage. The total cost for
the second blocks for both summer and winter can be entered into the model.
In this example for Arlington, Virginia, the taxes are not listed on the electric tariff.
They may be found on a utility bill, but I was able to find the local utility tax and
state consumption tax rates from a quick search online of the Arlington County code and the
State of Virginia code. Again, I entered the information in my spreadsheet.
In this example, the taxes are not charged in the same format accepted by the model.
County utility tax is only charged when the resident uses over 400 kilowatt-hours, but
is never higher than $3. State consumption tax is a stepped rate, with
different rate blocks than we input into the model.
In this case, we have to make a decision about the most appropriate way to enter the taxes
into the model. It is reasonable to enter the maximum $3 tax
for the local utility tax because residents are likely to owe nearly that much based on
usage. We will add the $3 tax to the monthly charge because it is a flat rate.
For the State tax, it is unlikely that a customer would use in excess of 2500 kilowatt-hours
of usage, so it is reasonable to enter only the cost of the first tax block. This tax
rate will be entered in the Extra Charges field on the model because it is a charge
per kilowatt-hours, whereas the Taxes field is charged as a percentage.
After completing the electric utility entry, we can move on to natural gas and start by
entering the company and rate names. In the example for Arlington, Virginia, the
natural gas utility rates are fairly straightforward and are not charged seasonally, however the
rates are in cents and therefore will need to be converted to dollars.
Once again I have transferred the rates to an excel spreadsheet and converted the rates
from cents to dollars per therm. I will enter the monthly charge, called a
system charge, of $11.25 and then the three blocks and corresponding costs for each block
in the summer section only, because the rates are not seasonal.
Just like with the electric taxes, the natural gas taxes are not available on the tariff.
Again, I found them through a quick internet search.
County tax is only charged when the resident uses over 20 CCFs, but is never higher than
$3. Consumption tax is a stepped rate, with different
rate blocks than the cost of natural gas. Because the State tax is charged in CCFs,
but the natural gas rate is charged in therms, the tax rate will need to be converted.
Looking back at my spreadsheet, I�ve entered the tax rates and calculated the rate per
therm using a conversion table from the US Energy Information Administration, found online,
and summed the three consumption tax rates. Again, I need to decide the most reasonable
way to record the taxes. I will add the maximum County utility tax
of $3 to the Monthly Charge field because it is a flat fee.
And, I will add the consumption tax rate per therm that I calculated into the Extra Charges
field. In the interest of time, I�m going to skip
ahead to water and sewer, rather than repeating this process for fuel oil delivery and propane.
The HUD Utility Schedule Model provides separate sections for water and sewer, although in
some jurisdictions there is one rate for both water and sewer. In that case, a PJ should
enter the rate just once in the water section. These two sections allow a PJ to enter rates
either in dollars per cubic foot or dollars per gallon, so a PJ should pay attention to
the units of measurement. The other difference between water and sewer
and the previous examples is that the model does not allow for seasonal rates.
For Arlington, Virginia, water and sewer rates are charged separately in dollars per 1,000
gallons, so the rates need to be converted to dollars per gallon.
There is not a monthly charge to enter and the rate does not change based on usage, so
we don�t have to determine the rate blocks. There are also not separate taxes and fees
to be entered. Therefore, I will enter one rate for water and one rate for sewer.
As a reminder, the fees sections at the bottom of the model are not applicable for the HOME
utility allowance. Having finished entering the applicable utility
rates, a PJ would scroll to the top of the model and click the Projected Family Allowances
button to see the model results. If a PJ selects the Preview Allowance Schedule
button instead, the full schedule will appear but it will not include an allowance calculated
for the number of bedrooms selected in the Unit Information section in this case, that�s
the two-bedroom unit. A PJ should review both the schedule and allowance
for reasonableness to ensure that errors did not occur when the rates were being entered.
The Show/Hide State Average button at the top of the screen provides averages in the
schedule for comparison. To calculate individual allowances for different
size units, the PJ can return to the model, change the number of bedrooms, and create
a new utility allowance by clicking on the Projected Family Allowances button again.
The schedule will not change, but a new allowance will be calculated for the bedroom size chosen.
That is the end of the model demonstration. Here is a list of resources with more information
about the HOME utility allowance requirements and the HUD Utility Schedule Model.
In particular, there are instructions for how to use the HUD Utility Schedule Model
on the HUD User webpage. If PJs have any questions about HOME requirements,
they should contact their CPD Representative in the HUD Field Office.
Thank you for viewing the HUD Utility Schedule Model webcast.

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