Operating Fund Energy Incentives: Energy Performance Contracting Program, Rate Reduction Incentive

Section 9(e)(2)(C) of the United States Housing Act of 1937 (1937 Act) authorizes Public Housing Agencies (PHAs) to “receive the full financial benefit from any reduction in the cost of utilities or waste management resulting from any contract with a third party to undertake energy conservation improvements in one or more of its public housing projects.” Energy Conservation Measures include but are not limited to improvements to utilities such as electricity, water, and natural gas. Under 24 CFR 990.185, PHAs may qualify for conservation incentives when undertaking ECMs that are financed by a third-party entity other than HUD. In addition to the Energy Performance Contracting Program, 24 CFR 990.185 also allows PHAs to retain 50% of any savings attributable to taking specific actions to reduce the cost of their energy consumption, such as well-head purchase of natural gas, administrative appeals, or legal action. This is referred to as the Rate Reduction Incentive (RRI).

The latest form for Operating Fund Energy Incentives: Energy Performance Contracting Program, Rate Reduction Incentive expires 2027-07-31 and can be found here.