The U.S. Department of Housing and Urban Development (HUD) is looking at ways to reduce income and rent errors and improper payments in the administration of both public housing and Section 8 Housing Choice Voucher programs under the Rental Housing Integrity Improvement Project (RHIIP). One area under review is PHA payment of the utility allowance costs associated with air conditioning (A/C). This Fact Sheet is intended to clarify the Department’s utility allowance policy related to air conditioning.

1. Question: What is a Utility Allowance?

Answer: Per HUD, the total resident payment of rent includes both shelter and the costs for reasonable amounts of utilities. The amount that a PHA determines is necessary to cover the resident’s reasonable utility costs the utility allowance. (See U.S. Department of Housing and Urban Development, Utility Allowance Guidebook, September 1998.)

2. Question: Is air conditioning generally an allowable utility cost?

Answer: No. See 24 CFR ?965.506(e).

If a PHA installs air conditioning and gives residents the option of choosing to use it, and it is either retail metered or check metered, residents must pay for the energy used. The PHA must not include air conditioning in the utility allowance.

For systems that offer residents the option to choose air conditioning but cannot be metered, residents are to be surcharged.

3. Question: How do you calculate the monthly electric consumption of an air conditioner (kWh)?

Answer: For information on the calculation of monthly A/C electrical consumption, see U.S. Department of Housing and Urban Development, Utility Allowance Guidebook, September 1998.

4. Question: Does HUD monitor PHA air conditioning utility allowance schedules?

Answer: Yes. In accordance with 24 CFR ?965.502(d), HUD may review schedules of allowances and surcharges in the course of audits or reviews of PHA operations.

5. Question: How is the tenant notified of utility costs?

Answer: In accordance with 24 CFR ?966.4, the lease between the PHA and each tenant shall contain a statement of utilities, services and equipment to be supplied by the PHA without additional cost, and utilities and appliances to be paid by the tenant.

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For technical assistance on utility allowances, specifically related to air conditioning, please contact your local Field Office. All other requests should be directed to the PIH Information and Resource Center on 1-800-955-2232 or visit our website at: http://www.hud.gov/offices/pih/programs/ph/phecc/allowances.cfm.