1. ENERGY PERFORMANCE CONTRACTS: The Role of the HUD Field Office and the HUD Energy Center GREEN FUNDING OPPORTUNITIES FOR ILLINOIS PUBLIC HOUSING AUTHORITIES September 13, 2011 Joseph E. Nemedi, Financial Analyst Illinois State Office of Public Housing Tedd Taylor Termunde, Program Analyst Illinois State Office of Public Housing

2. ENERGY PERFORMANCE CONTRACTS: The Role of the HUD Field Office and the HUD Energy Center  Statutory and Regulatory Compliance Financial Compliance: Subsidy and Incentives Financial Compliance: Subsidy and Incentives Contractual Compliance: Procurement Process Contractual Compliance: Procurement Process  Contract Review Approval and Monitoring Process RFP for Energy Audit and EPC RFP for Energy Audit and EPC The Energy Services Agreement (ESA) The Energy Services Agreement (ESA)

3. ENERGY PERFORMANCE CONTRACTS: The Role of the HUD Field Office and the HUD Energy Center Review and Approval of the RFP Review and Approval of the RFP HUD’s Model Form RFP HUD’s Model Form RFP HUD Review Checklist HUD Review Checklist Field Office Approval Letter Field Office Approval Letter HUD Field Office Point of Contact Review and Approval of the Energy Services Agreement (ESA) Review and Approval of the Energy Services Agreement (ESA) Field Office Capacity Field Office Capacity Energy Services Center Energy Services Center EPC/ESA Tracking and Monitoring; HUD Forms 52722 and 52723 EPC/ESA Tracking and Monitoring; HUD Forms 52722 and 52723

4. ENERGY PERFORMANCE CONTRACTS: The Role of the HUD Field Office and the HUD Energy Center Energy Performance Contract Energy Performance Contract RFP - Technical Review HUD Review Checklist

5. THE HUD ESA Review Process PHA submits an ESA to the HUD Field Office for review (including amendments or changes to an existing contract) PHA submits an ESA to the HUD Field Office for review (including amendments or changes to an existing contract) Field Office has available staff to perform review. Field Office has available staff to perform review. Field Office reviews ESA with support from HUD Energy Center Field Office reviews ESA with support from HUD Energy Center FO Director requests assistance from Energy Center FO Director requests assistance from Energy Center Energy Center has Staff to review ESA Energy Center has Staff to review ESA HUD Energy Center assigns ESA review to contractor HUD Energy Center assigns ESA review to contractor HUD Contractor reviews ESA - HUD Energy Center reviews ESA HUD Contractor reviews ESA - HUD Energy Center reviews ESA HUD Field Office Issues ESA Approval Letter HUD Field Office Issues ESA Approval Letter

6. ENERGY PERFORMANCE CONTRACTS The Role of the HUD Field Office and the HUD Energy Center ENERGY PERFORMANCE CONTRACTS The Role of the HUD Field Office and the HUD Energy Center Controlling Authority Regulatory Guidance Policy and Procedures

7. EPC HUD Regulations / Notices / Procedures 24 CFR 990.185 – HUD’s Financial regulations including Energy Incentives for EPC 24 CFR 990.185 – HUD’s Financial regulations including Energy Incentives for EPC 24 CFR 990.185 – HUD’s Financial regulations including Energy Incentives for EPC 24 CFR 990.185 – HUD’s Financial regulations including Energy Incentives for EPC Part 990 Final Rule/Part 990.185 Final Rule (01-16-2009) Part 990 Final Rule/Part 990.185 Final Rule (01-16-2009) Part 990 Final RulePart 990.185 Final Rule (01-16-2009) Part 990 Final RulePart 990.185 Final Rule (01-16-2009) 24 CFR 965 – HUD regulations on utility allowances, utility metering and EPC 24 CFR 965 – HUD regulations on utility allowances, utility metering and EPC 24 CFR 965 – HUD regulations on utility allowances, utility metering and EPC 24 CFR 965 – HUD regulations on utility allowances, utility metering and EPC 24 CFR 85.36 – HUD Procurement regulations 24 CFR 85.36 – HUD Procurement regulations HUD Procurement Chart HUD Procurement Chart HUD Procurement Chart HUD Procurement Chart HUD Field Office Review Procedure for Energy Performance Contracting HUD Field Office Review Procedure for Energy Performance Contracting HUD Field Office Review Procedure for Energy Performance Contracting HUD Field Office Review Procedure for Energy Performance Contracting PIH Notice 2009-16 – Guidance on Energy Performance Contracting PIH Notice 2009-16 – Guidance on Energy Performance Contracting PIH Notice 2009-16 – Guidance on Energy Performance Contracting PIH Notice 2009-16 – Guidance on Energy Performance Contracting PIH Notice 2011-36 - Guidance on Energy Performance Contracts NEW PIH Notice 2011-36 - Guidance on Energy Performance Contracts NEW PIH Notice 2011-36 - Guidance on Energy Performance Contracts PIH Notice 2011-36 - Guidance on Energy Performance Contracts

8. PIH Notice 2009-16 – Guidance on Energy Performance Contracting PIH Notice 2009-16 – Guidance on Energy Performance Contracting PIH Notice 2011-36 - Guidance on Energy Performance Contracts PIH Notice 2011-36 - Guidance on Energy Performance Contracts Additional Provisions and New Requirements for EPC’s

10. ENERGY PERFORMANCE CONTRACTS The Role of the HUD Field Office and the HUD Energy Center PIH Notice 2011-36 Annual Reporting Requirements The PHA must report the following to HUD annually by April 30th of each year: The PHA must report the following to HUD annually by April 30th of each year: Provide documentation that identifies energy conservation measures installed with HUD funds (e.g. Capital Fund Program) while the RBCL is frozen. HUD will adjust the frozen base, limiting the cost savings retained by the PHA to that which is a result of the EPC-funded ECMs. The PHA is to provide projected consumption reductions for all energy conservation measures installed with HUD funds. Provide documentation that identifies energy conservation measures installed with HUD funds (e.g. Capital Fund Program) while the RBCL is frozen. HUD will adjust the frozen base, limiting the cost savings retained by the PHA to that which is a result of the EPC-funded ECMs. The PHA is to provide projected consumption reductions for all energy conservation measures installed with HUD funds. Provide a copy of the ESCo prepared M & V report for all ESCo developed contracts. Provide a copy of the ESCo prepared M & V report for all ESCo developed contracts.

11. PIH Notice 2011-36 Section 30 of the 1937 Housing Act Where any financing transaction involves a security interest or other encumbrance in public housing property, PHAs are required to obtain written approval from HUD of the security interest or encumbrance pursuant to Section 30 of the U.S. Housing Act of 1937 (1937 Act). HUD approval of EPCs and associated ESAs do not constitute approval of the security interest, and a separate approval must be obtained. Where any financing transaction involves a security interest or other encumbrance in public housing property, PHAs are required to obtain written approval from HUD of the security interest or encumbrance pursuant to Section 30 of the U.S. Housing Act of 1937 (1937 Act). HUD approval of EPCs and associated ESAs do not constitute approval of the security interest, and a separate approval must be obtained. Under some lease-purchase agreements (otherwise known as municipal leases, the typical financing structure for an EPC), ownership of the equipment may reside with the third party, e.g., a bank, ESCo, etc. Under this scenario, where the ownership resides with a third party, a Section 30 approval is not required. Where ownership of the equipment resides with the PHA and a lien or other encumbrance exists on the equipment, a section 30 approval is required. Under some lease-purchase agreements (otherwise known as municipal leases, the typical financing structure for an EPC), ownership of the equipment may reside with the third party, e.g., a bank, ESCo, etc. Under this scenario, where the ownership resides with a third party, a Section 30 approval is not required. Where ownership of the equipment resides with the PHA and a lien or other encumbrance exists on the equipment, a section 30 approval is required. HUD’s Section 30 review focuses narrowly upon the security interest or encumbrance, and does not evaluate or approve the financing. HUD’s Section 30 review focuses narrowly upon the security interest or encumbrance, and does not evaluate or approve the financing.

12. The Role of the HUD Field Office and the HUD Energy Center Measurement and Verification Reports Guidelines are posted on HUD’s Public Housing Environmental and Conservation Clearinghouse (PHECC) website http://www.hud.gov/offices/pih/programs/ph/phecc/eperformance.cfm http://www.hud.gov/offices/pih/programs/ph/phecc/eperformance.cfm Procurement Considerations - Energy Performance Contracts. Conflicts of Interest Future Effects from Legislation

13. ENERGY PERFORMANCE CONTRACTS The Role of the HUD Field Office and the HUD Energy Center Questions Additional Resources http://www.hud.gov/offices/pih/programs/ph/phecc/eper formance/faq.cfm http://www.hud.gov/offices/pih/programs/ph/phecc/eper formance/faq.cfm http://www.hud.gov/offices/pih/programs/ph/phecc/eper formance/faq.cfm http://www.hud.gov/offices/pih/programs/ph/phecc/eper formance/faq.cfm EPC Training Opportunities EPC Training Opportunities The PHECC Web site The PHECC Web siteWeb siteWeb site