California Tax Credit Allocation Committee

California Utility Allowance Calculator (CUAC)

Existing Projects with MASH Award Submission Requirements

The certification and submission requirements below apply to project owners of existing tax credit projects with a MASH award requesting the use of CUAC estimate utility allowances. The CUAC must be prepared by a qualified energy analyst as defined in TCAC Regulation Section 10322(h)(21). All CUAC estimates shall be completed by an independent third party and shall be at the expense of the owner.

The cost of each quality control review is dependent on factors including the complexity of the review and the number of issues identified by the quality control reviewer. Each review cost is between $500 and $2,500. Project owners must submit a $500 fee to TCAC with their CUAC documentation and will receive an invoice for any additional costs due (up to $2,500 total) once the CUAC utility allowance is approved. During the review the project’s energy analyst will be contacted with any questions about the CUAC modeling or documentation, including requests to correct errors. Once the review is complete and the CUAC utility allowance is approved, the quality control firm will provide written documentation of the accuracy of the CUAC report to TCAC, and TCAC will notify the project owner in writing, including an invoice for any additional amount owing.

An annual update of the CUAC is required to be submitted to TCAC (Treas. Reg. 1.42-10(c)(2)). A fee is not required for the annual update as long as there have been no changes to the equipment or envelope requiring a new model.

Owners should be aware of CUAC submission requirements related to cash flow limitations and tenant rent increase documentation described below.

All CUAC estimates for existing tax credit projects with MASH awards and an allocation of PV generation to tenants shall include the following items:

  • The original submittal report signed by the qualified professional energy analyst should include the date the CUAC estimate was prepared, the project name for which the estimate was prepared, and each utility type and amount, by bedroom size
  • The name, address and phone number of the analyst who prepared and certified to the accuracy of the CUAC estimate (NOTE: the preparer and certifying analyst shall be the same person)
  • Proof of the energy analyst’s qualifications to use the CUAC, including a current California Association of Building Energy Consultant’s (CABEC) Certified Energy Analyst (CEA) 2016 certification number and a California Home Energy Rating Systems (HERS) certification number
  • A statement that the energy analyst and the owner of the project, the project applicant, and the project’s principals (general partners, members, etc.), are not related parties as defined by TCAC Regulation 10302(gg) and the Internal Revenue Code section 267(b) and 707(b)
  • A statement that the CUAC estimate is based solely on the professional building energy modeling and analysis completed by the qualified professional building analyst signing the CUAC estimate
  • MASH Incentive Claim Form and MASH award letter
  • A summary of the PV system installations; This includes documentation that the PV system offsets tenant area loads (unit loads), how the PV numbers in the CUAC submittal were derived, documents verifying the percentage of PV output allocated to common area and tenant unit loads, and a summary of the benefits accruing to the project and tenants.
  • Executed two-page summary CUAC report
    • Site plan for all buildings with North arrow
    • All floor level plans for all buildings with dimensions
    • All floor level layout (plans) showing each dwelling unit/ bedroom type
    • Elevation plans for all orientations for all buildings showing location of windows
    • Details showing building wall, ceiling, and floor assembly construction with R-value
    • Specification sheets for equipment and fenestration
  • Take Off: When plan sets absolutely cannot be obtained, or when renovations or alterations result in the original plans being unrepresentative of current conditions, the site assessment document author must complete an onsite drawing and detailed take offs. Site drawings and details should be used to create and confirm model inputs. This option will require a detailed sketch and data collection sheet. The take-off sketch shall include:
    • Site drawing for all buildings with North arrow
    • All Buildings included in model with dimensions
    • All floor level layout (plans) for each building with all dwelling units/ bedroom type showing dimensions
    • Elevation drawings for all buildings showing window dimensions and locations
    • Location of all heating, cooling, and water heating equipment
  • Title 24 Report (CF-1R, CF-2R, CF-3R, etc. or other compliance documentation) and CSV’s (hour-by-hour energy end use values) that were used in the analysis
  • Data Collection Spreadsheet  Be sure to use the MASH Project Data Sheet. The TCAC Existing Multifamily Assessment Report should document the energy efficiency measures used in the modeling of the constructed units and/or building(s) and include any testing or sampling done to confirm the constructed units and/or building(s) features.
  • CUAC weighted average worksheet (data from Energy Pro Report or CBECC-Res with monthly averages computed per bedroom type). Note: this worksheet is not required if the analysis is performed using the “adiabatic surfaces method.”
  • If CARE rates are being used in the analysis, documentation must be provided verifying that that the project meets the utility income requirements as well as a documented plan to assist tenants in signing up for the CARE program.
  • Heating Ventilation, Air Conditioning (HVAC) and Domestic Hot Water (DHW): All HVAC and DHW systems will be verified on site and modeled based of the verified data. Pictures of, or details on HVAC and DHW nameplates for all components related to energy shall be obtained including fans and pumps.
  • Live (e.g., .bld) files from the energy modeling software
  • Energy Modeling: Existing Homes: An energy model shall be completed in accordance with TCAC Existing Multifamily Assessment Protocols. All model simulations must be run using the current version of the residential performance module Energy Pro (EP) (EP version 5 for projects permitted before July 1, 2014, EP version 6 for projects permitted before January 1, 2017, EP version 7 for projects permitted on or after January 1, 2017) or CBECC-Res 2016. Use of other building performance software or modules is not acceptable. Note: the low-rise residential model may be used for high-rise buildings using a unit-by-unit approach.
  • Methods and Assumptions: All major assumptions used to develop the energy model and analysis must be clearly stated in an Appendix of the Assessment Report. When certain building features cannot be physically verified, the values from the Assumptions for Non-Verifiable Existing Conditions Table (see webpage) shall be used in the energy model and analysis. This table was developed based on code and typical installation practices over time. The assumptions are meant to represent the lowest possible performing measure when the actual measure is not verifiable. This will provide a conservative estimate of energy efficiency (i.e., high energy use) for a building/unit.
  • TCAC and the quality control reviewer may request additional documentation as needed.

In addition, project owners must submit:

  1. The project’s audited financial statements for the period since the PV installation or, if not available, the most recent audited financial statements (TCAC staff understands that the most recent financial statements could be pre-PV system installation). TCAC staff will review project financial statements. Projects must meet the following cash flow limitations: Project has cash flow of 15.0% or less of residential income and a 1.50 or less debt service coverage (DCR) ratio. The project’s audited financial statements should support the cash flow limitations. Please include the calculations demonstrating this requirement.
    Cash flow is defined per TCAC Regulation Section 10327(f): Revenue less operating expenses, property taxes, service amenity expenses borne by the project, replacement reserves, and debt service. For purposes of this calculation, “revenue” is net residential revenue and includes actual rent collected plus laundry/other revenue but does not include any income the project receives from a commercial or retail tenant. Debt service includes hard debt only, and excludes public soft debt or any debt payable from residual receipts. Operating expenses are consistent with the line items included in the TCAC application and do not include property taxes, replacement reserves, depreciation or amortization expense, compliance monitoring or lender fees, or the costs of any site or service amenities
  2. The projected tenant rent increases resulting from the use of CUAC utility allowances; use the TCAC spreadsheet, MASH CUAC Project – Tenant Rents. For existing tax credit projects with active MASH program reservations dated after February 28, 2018, any decrease in tenant’s utility allowance that results from conversion to the CUAC shall not exceed $15 per month over any 12-month period. For existing tax credit projects with active MASH program reservations dated prior to March 1, 2018, TCAC urges caution to project owners considering a general rent increase in combination with a CUAC utility allowance decrease. This combination could create tenant economic distress and should be avoided.
  3. Project owners must implement a tenant notification process informing tenants of the change to a CUAC utility allowance at least 90 days prior to the effective date (Treas. Reg. 1.42-10) and include the amount of the tenant rent increase. Owners shall provide to tenants at least 90 days prior to the effective date an informative summary about the current utility allowance and the proposed CUAC allowances, including notice of any actual rent increase to the tenant. Supporting documentation must be available to tenants or their representatives upon request at an easily accessible location. Please see the TCAC Compliance Manual’s utility allowance chapter for additional information. Utility allowances may be changed once per calendar year and always require a 90 day tenant notice. To demonstrate these requirements have been met, submit a summary of the tenant notification process to TCAC, including:
    • An informative summary notice about the proposed allowances under the CUAC, the current utility allowance and method, and the impact on tenant rent payments. This must be provided to tenants at least 90 days prior to the effective date (Treas. Reg. 1.42-10) and include notice of the amount of the tenant rent increase; and
    • Explain how supporting documentation is available to tenants or their representatives upon request at an easily accessible location.

An annual update of the CUAC is required (Treas. Reg. 1.42-10(c)(2)) and should be submitted to TCAC. A fee is not required for the annual update. The first year’s update submittal must also include a MASH CUAC Project – Tenant Rents update.

For specific questions regarding the CUAC, please contact Compliance Program Manager, Mayra Lozano at (916) 654-6340 or by email.