Aligning Utility Allowances with Electrification

October 29, 2024

New Quick Start Grant Report

Bright Power and Climate Action Campaign aimed to pilot solutions for increasing the adoption of electrification-friendly utility allowances in regulated, multifamily housing through a Quick Start Grant project.

Many utility allowances in Southern California are based on older, inefficient electric-resistant heating appliances, rather than modern electric heat pump technology. This discrepancy often results in higher utility allowances for electric appliances compared with gas alternatives, reducing the rent that housing owners can collect and disincentivizing the switch to modern electric equipment. The project team set out to understand how to mitigate this barrier.

The project team found that more education for public housing authorities, property owners, and heat pump installers on how utility allowances are set, and impact heat pump installation, would be very beneficial. The team also found that a greater awareness of alternative methods for setting utility allowances, such as the California Utility Allowance Calculator (CUAC) or HUD Utility Schedule Model (HUSM) is needed.

The efforts endeavored through this Quick Start Grant resulted in a successful whole-property heat pump installation at a Section 202 low-income senior housing project in Torrance, California. Post-retrofit, resident utility expenses will drop, resulting in an updated and lower utility allowance. These changes translate to around $20,000 of additional annual revenue for the property owner without increasing resident expenditures. As an additional resource, the project team’s successful efforts were organized and published into a guide on how to adopt an electrification-friendly utility allowance.

bright power final

To learn more about this Quick Start Grant, read the full report.

The TECH Clean California initiative is funded by California ratepayers and taxpayers and administered by Southern California Edison Company under the auspices of the California Public Utilities Commission. The TECH Clean California team is led by Energy Solutions and partners with Anchor Blue Consulting, Ardenna Energy, Association of Energy Affordability, Building Decarbonization Coalition, Central Coast Energy Services, Inc., Electrify My Home, Frontier Energy, National Comfort Institute, Energy Outlet, Recurve Analytics, The Ortiz Group, Tre’ Laine Associates, and VEIC.