> ![](media/image1.png){width="0.625in" height="0.625in"}**[U.S.
> Department of Housing and Urban Development]{.smallcaps}**

##### Office of Public and Indian Housing

######### 

## **[Special Attention on: Notice PIH-2007-30 (HA)]{.smallcaps}**

Public Housing Agencies; Issued: October 24, 2007

## Hub Directors of Public Housing; 

## PIH Program Center Coordinators; Expires: October 31, 2008 

Public Housing Division Directors;
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

######### Resident Management Corporations Cross Reference

#########  **24 CFR 85.36**

#########  **24 CFR 965**

#########  **24 CFR 990**

#########  **This notice supersedes Notice** 

#########  **PIH 2005-25** 

[Subject: U]{.smallcaps}sing [Energy Star]{.smallcaps} to Promote Energy
Efficiency in Public Housing

1.  **[[Purpose]{.underline}]{.smallcaps}** This Notice encourages
    [Energy Star]{.smallcaps} as the standard for Public Housing
    Agencies (PHAs), encourages PHAs to implement energy saving
    activities, and informs PHAs that [Energy Star]{.smallcaps}
    expertise is available to provide valuable assistance for
    implementing energy conservation initiatives. Purchase of [Energy
    Star]{.smallcaps}-labeled products, adoption of the whole-house
    approach of *Home Performance with [Energy Star]{.smallcaps}*, and
    construction of [Energy Star]{.smallcaps}-qualified residential
    structures (HOPE VI) by PHAs support the goals of the President's
    National Energy Policy by reducing the burden of public housing
    energy costs while increasing comfort and reducing health risks to
    public housing residents. It also streamlines the purchase of Energy
    Star products using the Department of Energy's website at
    [http://www.quantityquotes.net](http://www.quantityquotes.net/).

2.  **[[Applicability]{.underline}]{.smallcaps}** This Notice applies to
    PHAs operating public housing.

3.  **[[Background]{.underline}]{.smallcaps}** Nationwide, for PHA
    fiscal years ending between 9/30/06 and 6/30/07, PHA-paid utilities
    totaled \$1.6 billion annually or 23 percent of the costs to operate
    public housing. It is estimated by the Office of Public Housing and
    Voucher Programs that \$430 million in utility costs are paid by
    residents which are paid indirectly by PHAs in the form of utility
    allowances that reduce resident rents. The use of [Energy
    Star]{.smallcaps} equipment, with proper maintenance, can
    significantly reduce energy consumption and expenditures.

> The Energy Policy Act of 2005, the HUD Energy Action Plan, and the
> Memorandum of Understanding with the Department of Energy (DOE) and
> the U.S. Environmental Protection Agency (EPA) emphasize that [Energy
> Star]{.smallcaps} should be selected whenever energy systems, devices,
> and appliances are replaced unless it is not cost effective to do so.
>
> In July 2001, HUD's Deputy Secretary established a Department-wide
> Energy Task Force to identify measures HUD could take to support these
> goals. The goals developed for Public and Indian Housing are to
> require PHAs to base equipment purchases on [Energy Star]{.smallcaps}
> standards and establish HOPE VI as a leader in cost-effective,
> energy-efficient construction.

The Energy Conservation equipment and practices regulations currently
require PHAs to purchase original or replacement equipment that meet
minimum efficiency requirements set by the DOE (24 CFR 965.306). This
Notice encourages increasing the standard to that of purchasing [Energy
Star]{.smallcaps} products.

> HUD is interested in promoting and expanding the use of
> energy-efficient equipment and appliances in public housing in order
> to reduce energy consumption and to control operating costs. PHAs are
> encouraged to purchase [Energy Star]{.smallcaps} equipment as
> replacement needs occur, adopt *Home Performance with [Energy
> Star]{.smallcaps}* as part of any rehabilitation or modernization
> initiative, and construct [Energy Star]{.smallcaps}-qualified homes as
> part of any new construction project, if economically feasible.

4.  [**[Energy Star Products]{.underline}**]{.smallcaps} In 1992, the
    EPA introduced the [Energy Star]{.smallcaps} label to identify and
    promote energy-efficient products that exceed minimum efficiency
    requirements. The [Energy Star]{.smallcaps} label is now on major
    appliances, heating and cooling equipment, windows, lighting, and
    over 40 other product categories. Through the EPA's partnerships
    with more than 8,000 private and public sector organizations, the
    [Energy Star]{.smallcaps} initiative can deliver the technical
    information and tools that organizations and consumers need to
    choose efficient energy solutions and best management practices. The
    [Energy Star]{.smallcaps} initiative has successfully delivered cost
    savings across the country saving businesses, organizations and
    consumers more than \$8 billion a year.

> [Energy Star]{.smallcaps} provides PHAs with a common specification
> for energy efficiency that goes beyond minimum efficiency
> requirements. This can significantly reduce public housing energy
> costs and provide residents increased comfort and reduced health
> risks. Moreover, specifying [Energy Star]{.smallcaps} when purchasing
> equipment eliminates any confusion caused by different
> energy-efficiency thresholds. By focusing energy-efficiency
> initiatives on [Energy Star]{.smallcaps}, PHAs can build on the market
> momentum established in the marketplace and take advantage of bulk
> purchasing initiatives, energy-efficient construction expertise, and
> combined heat and power systems.

5.  **[[Application to Asset Management]{.underline}]{.smallcaps}** In
    accordance with 24 CFR 990, HUD is shifting the focus of the public
    housing program from the \"agency\" to the \"projects.\" In keeping
    with these changes, each project will receive its own Utility
    Expense Level and PHAs will be required to maintain utility costs
    and consumption at the project level. PHAs should begin to plan now
    for energy conservation measures on a project-by-project basis. To
    the extent that a project can achieve energy savings, that will mean
    more funds available to the project for other operating costs.

6.  [**[Using Energy Star in Public Housing]{.underline}**]{.smallcaps}
    PHAs can use [Energy Star]{.smallcaps} effectively in both existing
    and redeveloped public housing. In existing housing, PHAs can
    replace equipment or appliances with [Energy Star]{.smallcaps}
    models. For more permanent savings that return energy savings many
    times longer than the life of an appliance, PHAs can also adopt the
    whole-house approach of *Home Performance with [Energy
    Star]{.smallcaps}*.

> In redevelopment, PHAs can specify that the house/unit be built to
> meet the [Energy Star]{.smallcaps} requirements for new construction
> which is at least 15 percent better than homes built to the 2004
> International Residential Code. Several states have begun requiring
> new affordable housing be built to [Energy Star]{.smallcaps}
> specifications. Purchase of [Energy Star]{.smallcaps} equipment, as
> with all procurement transactions, must be consistent with the
> standards set forth in 24 CFR 85.36.

7.  **[[Energy Star products for existing
    buildings]{.underline}]{.smallcaps}** Purchasing energy efficient
    appliances and equipment provides an opportunity to conserve energy
    and reduce operating costs. PHAs should always consider [Energy
    Star]{.smallcaps} when purchasing products or appliances since more
    efficient equipment pays for itself with energy savings and it
    offers an opportunity for the PHA to reduce operating costs.

> [Energy Star]{.smallcaps} provides a label on over 40 product
> categories and numerous models for residential applications. [Energy
> Star]{.smallcaps} products are 10 to 30 percent more efficient than
> products that meet the minimum DOE standards. New [Energy
> Star]{.smallcaps} products may be as much as 50 percent more efficient
> than older equipment. For example, current [Energy Star]{.smallcaps}
> qualified refrigerators usually require half as much energy as models
> manufactured before 1993.

**[8. [Purchasing Cost Effective Energy Efficient
Equipment/Products]{.underline}]{.smallcaps}** PHAs should purchase
[Energy Star]{.smallcaps} equipment such as appliances when economically
feasible. The incremental additional costs for the more energy efficient
equipment must be recoverable from energy savings over the expected life
of the equipment and the equipment must be cost effective to maintain.
If energy savings are insufficient to pay for the additional cost of
purchasing [Energy Star-]{.smallcaps}labeled equipment, the upgraded
equipment should not be purchased unless there are compelling
circumstances such as energy being in short supply or emergency
conditions that must be considered when making the selection.

> There are several ways to calculate the effective cost of equipment
> when energy savings are accrued over a specific amount of time.
> Utility costs have a large impact in calculating the effective cost of
> equipment. [Energy Star]{.smallcaps} products provide specific
> information about savings that can be obtained by reduced energy use.
>
> A PHA should purchase [Energy Star]{.smallcaps}-labeled products such
> as windows and ensure that any new buildings are constructed according
> to [Energy Star]{.smallcaps} standards, unless the PHA performs an
> economic analysis that finds the incremental cost of the [Energy
> Star]{.smallcaps} product or building yields a negative life-cycle
> cost savings.

**9.** **[[Home Performance with Energy Star]{.underline}]{.smallcaps}**
Launched in 2001, the *Home Performance with [Energy Star]{.smallcaps}*
initiative is an effort to use [Energy Star]{.smallcaps} standards to
help encourage and facilitate whole-house or whole-building energy
improvements. Rather than labeling a particular product, or even a home,
*Home Performance with [Energy Star]{.smallcaps}* is linked to the
building performance. The effort emphasizes consumer education, value
and one-stop problem solving. While the program goal is saving energy,
its market-based approach and message focus on addressing a variety of
customer needs, from comfort and durability to health and safety.

> *Home Performance with [Energy Star]{.smallcaps}* has several key
> components including a whole-house approach, a home energy inspection,
> diagnostic testing and installation, and quality assurance
> inspections. The inspection include a complete visual and diagnostic
> evaluation of all of the home\'s thermal and mechanical efficiency
> components such as attic insulation, exterior walls, windows,
> basements, and heating systems. Diagnostics include air infiltration
> testing and duct leakage testing, combustion safety testing, and where
> possible, electric baseload analysis. The inspection results in
> targeted advice on the home\'s energy and maintenance problems.
> Participating contractors can perform any or all of the
> recommendations, using best practices, including installation of
> energy-efficient lighting products; insulation; windows; heating,
> ventilation and air conditioning (HVAC) equipment; water heater
> insulation blankets; and air-sealing and duct-sealing. Alternatively,
> contractors maintain a list of providers for those services not
> directly provided and can assist with coordination and quality
> assurance inspections. Compliance with 24 CFR Part 85.36 is required
> for all procurements, including those associated with [Energy
> Star]{.smallcaps}.

**10. [[Energy Star For Redevelopment]{.underline}]{.smallcaps}** The
memorandum of understanding between HUD, EPA, and DOE addresses
implementation of "strategies to achieve an [Energy Star]{.smallcaps}
rating in new housing financed through HUD's HOPE VI program, unless a
sponsoring housing authority demonstrates the higher standard cannot be
achieved within Total Development Cost (TDC) limits." The HUD Energy
Action Plan suggests that new housing built through the program achieve
an [Energy Star]{.smallcaps} rating for new construction, unless the PHA
demonstrates that the higher standard cannot be achieved within TDC
limits. For example, HOPE VI projects in Holyoke, Massachusetts, and
Louisville, Kentucky, were able to meet the [Energy Star]{.smallcaps}
criteria within TDC limits.

> [Energy Star]{.smallcaps} qualified homes are independently verified
> to be at least 15 percent more energy efficient than homes built to
> the 2004 International Residential Code. These savings are based on
> heating, cooling, and hot water energy use and are typically achieved
> through a combination of building envelope upgrades, high performance
> windows, controlled air infiltration, upgraded HVAC systems, tight
> duct systems, and upgraded water-heating equipment.
>
> Any single-family or multi-family residential home that is three
> stories or less in height can qualify to receive the [Energy
> Star]{.smallcaps} label. This includes traditional site-constructed
> homes as well as modular or systems-built homes with insulated
> concrete forms or structurally insulated panels. The [Energy
> Star]{.smallcaps} label is earned only after the home\'s energy
> efficiency is verified, either by an independent third-party such as
> an accredited home energy rater or Builder Option Package (BOP)
> verifier. BOPs represent a set of construction specifications for a
> specific climate zone. For the purposes of using BOPs, the U.S. has
> been divided into 19 separate climate zones, and each county is
> associated with a specific climate zone. BOPs can help simplify the
> process of constructing an [Energy Star]{.smallcaps} qualified new
> home. They specify performance levels for the thermal envelope,
> insulation, windows, orientation, HVAC system, and water heating
> efficiency for each specific climate zone that meet the [Energy
> Star]{.smallcaps} standard.
>
> BOP ratings typically entail at least one on-site inspection of the
> home to test the leakiness of the envelope and ducts. Once
> construction is complete, the PHA will need to locate a BOP verifier
> in the region to test the tightness of the house envelope and ducts.
> The scores derived from these tests are compared with the
> pre-determined specification of the BOP to either pass or fail the
> house as an [Energy Star]{.smallcaps} qualified new home. Further
> information is available at
> [www.energystar.gov/homes](http://www.energystar.gov/homes)

**11. [[Special Offers and Rebates from Energy Star
Partners]{.underline}]{.smallcaps}** To encourage purchase of
energy-efficient products, [Energy Star]{.smallcaps} partners
occasionally sponsor special offers such as sales tax exemptions,
credits, or rebates on qualified products. The [Energy Star]{.smallcaps}
website has search capability that identifies local opportunities to
reduce the purchase price of specific [Energy Star]{.smallcaps}
products. The search is provided as a service to consumers to find
special offers or rebates where they exist, based on information that
partners submit to [Energy Star]{.smallcaps}. Enter the local zip code
to find out if there are any special offers or rebates currently
available on [Energy Star]{.smallcaps} qualified products in a specific
area at
<http://www.energystar.gov/index.cfm?fuseaction=store.store_locator>.
PHAs must follow established procurement requirements when making
purchases using special offers.

**12. [[Procurement Purchasing ]{.underline}]{.smallcaps}** HUD
recognizes the benefits of streamlining the purchase of Energy Star
products and PHAs are encouraged to use the DOE's Quantity Quotes
website, [http://quantityquotes.net](http://quantityquotes.net/) for
procurement purchases above \$2,000 and below \$100,000. If at least
three quotes are received using DOE's Energy Star Quantity Quotes, then
it satisfies both the 24 CFR 85.36(d)(1) small purchase procedures and
guidance provided in the Procurement Handbook 7460.8 REV 2, paragraph
5.2. If less than three quotes are received using DOE quotes, then the
PHA must supplement the difference with other quotes which may include
telephone quotes.

**13. [[Future Opportunities for PHAs ]{.underline}]{.smallcaps}**
[T]{.smallcaps}he EPA and HUD will continue to work to provide value for
Energy Star in public housing. In addition to expanding the bulk
purchasing initiative, other possible projects include creating a
resource page on the Energy Star website specifically designed to help
PHAs include Energy Star in public housing.

**14. [C[ontacts]{.smallcaps}]{.underline}** [Q]{.smallcaps}uestions
regarding this Notice should be directed to Nicole Faison, Director,
Office of Public Housing programs at (202) 708-0744. For additional
information on energy issues for public housing contact the PIH Energy
Conservation Clearinghouse through its website at
<http://www.hud.gov/offices/pih/programs/ph/phecc> or by telephone at
(800) 955-2232. More information on Energy Star can be found at
www.energystar.gov. You can also contact Brian Ng, Affordable Housing
Coordinator for Energy Star with EPA at (202) 343-9162 or send him an
email at ng.brian@epa.gov. For Energy Star information for Public
Housing, contact Leroy Ferguson, HUD HQ Office of Public Housing
Programs at (202) 402-2411.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_/s/\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Orlando J. Cabrera, Assistant Secretary for

Public and Indian Housing