HUD’s Office of Community Planning and Development (CPD) posted a single “Q&A” on December 7 explaining how Community Development Block Grant-Coronavirus (CDBG-CV) funds may be used to make emergency utility payments to a public utility provider on behalf of a household.
The one-page item goes into technical detail about the cost principles of a HUD rule that applies to all HUD programs (2 CFR part 200). In short, a utility owned by a city or county receiving CDBG-CV (a grantee) must ensure that the per unit cost of delivering a utility to a household is reasonable. If a grantee-owned utility does not have an excess of revenue over expenses (does not make a profit), a fee billed to a household may be used to support the “reasonableness test” and CDBG-CV may be provided to the publicly owned utility on behalf of a household unable to pay the utility due to the coronavirus.
If a utility is operated in a manner that is intended to earn a profit, the grantee must calculate the per unit cost for residential customers based on the actual costs of providing the service and an allocation base that results in an equitable allocation to the grant.
The Q&A fails to remind the reader that a CPD waiver allows a household to receive emergency utility assistance for up to six consecutive months (up from the previous cap of three months).
The Q&A is at: https://bit.ly/3m0qcIG