This article was originally published in the January/February 1999 issue of Home Energy Magazine. Some formatting inconsistencies may be evident in older archive content.
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Home Energy Magazine Online January/February 1999
|This Wisonsin Gas Company brochure emphasizes that whole-house programs treat the house as a system, from its insulation to its windows.|
|Hidden air leakage areas located in the attic are identified with a whole-house inspection.|
Wisconsin Gas Company
626 East Wisconsin Avenue
Milwaukee, WI 53320
Mold and moisture damage, CO poisoning, energy losses, and long-term health effects are just some of the problems that can result when a house doesn't function well. Home performance contractors have received specialized training in diagnosing the causes of such problems. Using such diagnostic tools as blower doors and pressure pans, these contractors can see the unique way an individual house works as a system, can pinpoint the cause or causes of any problems, and can provide solutions that save money, restore comfort, and last.
While most utilities have not been leaders in the whole-house effort, a few of them have begun to recognize the benefits to their customers. In an increasingly competitive market, these utilities may find that their whole-house services put them at the forefront of retail competition.Home Performance Leadership Takes Root Oscar Bloch, senior policy analyst with the Public Service Commission (PSC) of Wisconsin, first got intrigued by the whole-house approach during his graduate studies in energy analysis and policy at the University of Wisconsin in Madison. There he became familiar with the house doctor approach to home diagnosis that had come out of Princeton University in the late 1970s. At the same time, Bloch was well aware how frustrated energy efficiency advocates were by the tepid consumer interest in efficiency measures.
The engineering approach to efficiency--lists of cost-effective measures and calculated payback periods--was not selling well in residential markets. Approaching customers from the perspective of solving a house's performance problems, rather than just conserving energy, seemed a more reasonable and marketable approach to Bloch. When he started working at the PSC, he brought his enthusiasm for the house-as-a-system concept with him.
Still, Bloch found that getting Wisconsin utilities to adopt a whole-house approach in their demand side management (DSM) programs took a combination of education and state regulation. Electric utilities in Wisconsin have been required to meet annual energy savings goals since 1986. Gas utilities faced similar requirements beginning in 1990. However, in 1995 the PSC started allowing gas utilities to trade reductions in energy savings targets for realistic and quantifiable market preparation goals, or programs that help create market demand and supply for efficiency services. Electric utilities followed suit in 1998. Two Wisconsin utilities have responded to this PSC policy by starting their own whole-house diagnostic programs. In the process, they have built partnerships with local trainers and contractors, and have offered their customers unique benefits. (For a look at how utility-contractor partnerships are working in New York, see Working the Utility/Contractor Connection, HE Nov/Dec '97, p. 37. For more information on other Wisconsin efficiency programs, see The Changing Marketplace: Recovering the Costs for Efficiency Services, HE May/June '96, p. 30.)Better Addressing Customer Complaints Wisconsin Gas Company (WGC) has offered comprehensive demand-side services for more than 15 years, but 5 years ago WGC started to explore offering a formal whole-house program. This was done partly to fulfill PSC requirements and partly to improve customer benefits. The complaints we got from customers--excessive moisture, cold rooms, drafts--were not being adequately addressed by the traditional conservation approach, says Ken Sipes, program manager for WGC's DSM services. The utility's Whole-House Program was designed to better address these types of customer complaint and creating a network of independent, local contractors trained in whole-house diagnosis and treatment.
Early in 1995 WGC took the first step in creating its program: finding contractors who were disposed to put aside their usual emphasis on selling a particular service or product and concentrate instead on treating the entire house. Sipes started by contacting the local contractors whom WGC had worked with in previous DSM programs. Sixty contractors expressed an initial interest in the program, but that number fell to about 25 when the required time commitment became clear.Training Contractors For those first 25 contractors and for any contractor wishing to join the program, the utility provides up to a week of free training on whole-house safety assessments, testing, diagnostics, and installation techniques. During the first two years of the program, WGC also offered to the participating contractors low-interest financing of testing equipment and use-to-own performance incentives that substituted for payments on equipment. The utility felt that in the early stages of the whole-house program, local contractors would be reluctant to lay out capital for new equipment without knowing what the payback would be or when it would come. Offering the contractors methods to obtain the equipment at low risk (but not for free) gave them incentives to both purchase and use the equipment.
In return, the contractors were asked to meet strict qualifications, including good Better Business Bureau ratings and adequate insurance. They had to agree to site inspections and other quality control measures. WGC staff conduct regular quarterly meetings and send out a newsletter to maintain communication with, and get feedback from, the contractors. Only 4 of the contractors initially involved in the program have dropped out, and those 4 were quickly replaced by others. WGC currently has 14 HVAC and 9 insulation contractors on its contracting team.
Keith Williams, owner of Building Services & Consultant, has been training WGC's contractors for about 4 years. An insulation contractor for 18 years, he honed his expertise in blower door diagnosis and the whole-house approach from a WGC training he underwent 5 years ago. In the classroom and field training that Williams now conducts for contractors new to WGC's program, he emphasizes understanding the numbers that blower door tests generate. Williams also conducts quality control spot checks for WGC. Initially, the checks revealed that the contractors weren't too accurate in their reporting of blower door test results, but within the last year, the contractors have been getting more conscientious and the reported results are more accurate, says Williams.Branching Out into the Marketplace Among WGC's long-term goals for the program is to create a pool of contractors who offer whole-house services independently. (See Whole-House Services: The Child is Beginning to Walk.) The five years of contractor training that WGC has conducted is paying off, as more and more companies and individuals in the area offer blower door and other diagnostic testing. But the contractors aren't ready to operate independently yet, says Sipes. So WGC helps with marketing by referring customers who call in to its customer service line. WGC also pays for cooperative advertising with the contractors, sends out targeted mailings to customers, and has sponsored radio call-in shows. We have the supply out there, Sipes says. Now we're looking to make demand grow.
For customers who call in with specific complaints, a whole-house inspection that includes a blower-door test, a check of insulation levels, ambient CO monitoring, and combustion appliances safety tests is an easy sell. To stimulate demand among all its customers, WGC offers rebates for specific work. The amounts of these rebates have declined over the life of the program. For example, customers used to get repaid for $75 of the cost of an inspection. Now they have to pay the entire inspection fee, which varies depending on which contractor does the work. They also used to be eligible for a 30% (up to $200) rebate toward insulation work. Now residential customers are eligible only for a flat rebate of $65 for insulation work.
In spite of these declining rebates, customer participation in the program has increased. In the program's first year, only about 100 rebate certificates got turned in. For 1997 that number jumped to close to 1,000. WGC hopes the program will eventually become so valuable that customers sign up even without rebates. What percentage of program costs these rebates amount to isn't clear, because WGC doesn't keep track of program spending as a separate category, says Sipes.
Sipes points to the increased customer participation as a clear indication of the whole-house program's success. Although the PSC's policy helps to ensure the existence of the whole-house program, Sipes says that by now the program would be offered anyway because of its customer benefit value. (See Will Whole-House Work for Every ESP?)Building Up Future Demand Madison Gas and Electric (MGE) has a whole-house program that Dave Borski, a marketing representative for MGE, describes as being still in its infancy. In return for the PSC granting MGE a 50% reduction in its residential gas savings goals, MGE agreed last year to a series of market preparation goals. These include: devising performance standards for contractors who market whole-building services; integrating whole-house energy assessment and treatment into the home real estate and lending markets; getting homeowners to recognize the importance of whole-house energy efficiency and high performance housing; and securing the inclusion of whole-house performance principles in the curricula of local secondary and technical schools.
After about a year of effort, MGE has made some progress toward meeting its various market preparation goals. MGE has sponsored trainings for contractors learning to conduct home performance ratings. These trainings also include information on house dynamics and whole-house diagnostics. No nearby colleges yet offer house performance classes, but Borski has given lectures to local high school and technical college classes on home performance and energy efficiency. He is also talking with the University of Wisconsin about including a home performance perspective in their energy auditor training course. To build recognition of the value of high-performance housing, MGE also holds neighborhood workshops and sends out promotional brochures to customers.
MGE's whole-house program is not one that customers can simply sign up for, says Borski. Odds are it never will be. Borski predicts that before their whole-house program is developed enough to be actually supplying services to residential customers, all DSM programs in Wisconsin will be taken out of the hands of utilities and become the province of a public benefits board. MGE's market demand efforts will not have been for naught, though; they will have built up market demand for this future board's programs.
In explaining why MGE is now sold on a whole-house focus, Borski says, Oscar [Bloch] is our regulator, and he feels strongly about it. But I also feel strongly about it. In the past, Borski has been on the receiving end of calls from customers complaining about home performance problems that develop when a house is not treated as a system. The contractors would come in and solve one problem, and then inadvertently create another, says Borski. He hopes the whole-house approach will eliminate those calls.
Recognition of these kinds of systemic problems is what first led Bloch to his appreciation of the whole-house approach. Given his position, he has been able to spread his appreciation around, through utilities to contractors and finally to residential consumers who get to appreciate the joys of living in high-performance housing.
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