California Tax Credit Allocation Committee

California Utility Allowance Calculator (CUAC)

Rehabilitation Project Submission Requirements and Recommendations

The certification and submission requirements below apply to rehabilitation project owners 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 energy analyst submitting CUAC estimates for rehabilitation projects shall confirm the energy efficiency measures of projectsí units and buildings as required by applicable Building Energy Efficiency Standards, Title 24, Part 6 (The Standards). The building energy model should accurately reflect the existing conditions. The energy analyst shall also identify: the utility provider(s), the appropriate tariffs for gas and electricity, building orientation, the building(s) unit mix, unit floor plan layout(s), and apartment features. This shall be done through direct observation (including field testing or sampling at a minimum rate of 1:7 units), official documentation, or third-party resources.

All CUAC estimates for existing tax credit rehabilitation projects will be subject to two separate CUAC reviews with the first being conducted at the pre-construction phase and a final CUAC review being conducted at the final placed-in-service stage by a TCAC quality control contractor. At initial application, TCAC staff will conduct a minimal review of CUAC estimates for all existing tax credit rehabilitation projects. It is highly recommended, however, that all rehabilitation applicants proposing to use CUAC pay the fee and submit the complete CUAC package for quality control review by TCACís contractor either prior to application or at least before construction begins. It is TCACís experience that the assumptions selected for the existing building conditions often require adjustment as part of the quality control review. The applicant bears full risk for a change in the CUAC allowances based on the mandatory post-construction quality control review, and an early quality control review will help mitigate this risk and avoid a situation in which the project owner makes design and expenditure decisions based on projected CUAC allowances that later prove to be inaccurate. Projects with an early quality control review must still undergo and pay the fee for the post-construction quality control review when actual building performance metrics are known, but a pre-construction review that establishes the correct base assumptions should shorten the time frame and lessen the cost of the post-construction review.

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 (TCAC passes on the quality control review cost to the project owner). For each review (i.e., a voluntary pre-construction review and the mandatory post-construction review), 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 projectís energy analyst will be contacted with any questions about the CUAC modeling or documentation, including requests to correct errors. Once the review is complete, 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 (Treas. Reg. 1.42-10(c)(2)) and should be submitted to TCAC. 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.

Tenant rent increase limits and notification requirements

Any decrease in tenantís utility allowance that results from conversion to the CUAC shall not exceed $15 per month over any 12-month period.

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 Manualís utility allowance chapter for additional information. Utility allowances may be changed once per calendar year and always require a 90 day tenant notice.

If for any reason, a rehabilitation project owner initially establishes tenant utility allowances from a public housing authority (PHA) utility allowance schedule, a notice must be provided to tenants informing them 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. Supporting documentation should be available to tenants or their representatives upon request at an easily accessible location. Please see the TCAC Compliance Manualís utility allowance chapter. Utility allowances may be changed once per calendar year and always require a 90 day tenant notice.

OPTION A: A minimal CUAC review at the pre-construction phase

OPTION B: A complete voluntary CUAC review at the pre-construction phase

Assumptions for Non-Verifiable Existing Conditions