Energy Services Bulletihttp://www.wapa.gov/esjun043.htmet" href="esb.css"> </head> <body bgcolor="white" link="red" vlink="#003366"> <div align="center"> <table width="100%" border="0" cellpadding="2" cellspacing="0"> <tr> <td width="60%" valign="top" align="left"><span class="subhead">Energy Service Bulletin, June 2004</span></td> </tr> <tr align="center"> <td width="60%" valign="top" align="left"> <table border="0" cellpadding="0" cellspacing="2" width="100%"> <tr> <td width="96%"> <div align="right"> <span class="text"><a href="jun042.htm">Return to article<br> </a></span></div> </td> </tr> <tr> <td width="96%"> <div align="left"> <p class="headline">'Do-it-yourself' heat pump promotion a big success for co-op<br> </p> <table width="100" border="0" align="right" cellpadding="0" cellspacing="0"> <tr> <td><img src="images/CoZlogo.jpg" alt="" height="177" width="228" border="0"></td> </tr> <tr> <td class="cutline">The Co-Z Energy Plan started as a way to sell DMEA members energy services—hot water, cold beer and comfort—and turned into an award-winning program promoting GeoExchange technologies. (Artwork courtesy of Delta Montrose Energy Association)<br> </td> </tr> </table> <p class="text"><a href="http://www.dmea.com/">Delta Montrose Energy Association</a> proved that if you want something done right, the best way is to do it yourself—especially for a rural electric co-op hoping to sell its members energy-efficient electric technology and build "good load" in the process.<br> </p> <p class="text">The board made a strategic decision in 1998 to market energy services to its members that ultimately led to more than 300 geothermal heat systems being installed on Colorado's western slope. "We wanted to create a financing program that would provide residential members conditioned space at a fixed monthly fee," explained Marketing and Member Services Manager <a href="mailto:pbony@dmea.com">Paul Bony</a>. "The concept is called 'chauffage,' but our members said it sounded too French and too expensive, so we renamed it the Co-Z Energy Plan."<br> </p> <p class="text">Through the Co-Z plan, members' monthly payments on their electric bill cover energy cost for heating and cooling, and the costs of installing and operating a geothermal heat pump. Initially, the program targeted GeoExchange technology "because it fit our goals really well," said Bony.<br> <br> </p> <p><span class="subhead">Finance program makes new technology competitive<br> </span></p> <p class="text">Those goals were to develop a long-term revenue stream; build a profitable, stable electric load; cultivate member loyalty; promote energy-efficient technology; and educate local contractors. In a market where existing homes were mainly heated by propane and builders were installing natural gas heat in new homes, DMEA recognized that it would have to remove the barriers associated with adopting green, electric powered technologies.<br> </p> <p class="text">For most consumers, high first cost is the biggest obstacle to installing energy-efficient systems. DMEA's solution was to offer members long-term loans to finance complete ground-source heat pump systems, including installation and all equipment, for up to 30 years. Participants also enjoyed a "lock" on their energy rates for a total monthly heating and cooling bill that was competitive with propane and natural gas prices using conventional equipment. Members who purchased the geothermal installation outright or those who have paid off their systems early may also purchase service and maintenance agreements.<br> </p> <p class="text">The energy services staff manages the program with help from the co-op employees' credit union, which is located in DMEA's lobby. Expanding its charter to include co-op members, the credit union processes the loan paperwork. <br> </p> <p class="text">It was a convenient arrangement, Bony said, since energy services undertook the Co-Z administration with minimal training. DMEA did, however, bring in an outside bank auditor to evaluate the program. "We wanted to make sure the processes and procedures were accurate and efficient," he added.<br> <br> </p> <p><span class="subhead">Newsletters, workshops raise customer awareness of heat pumps</span> <br> </p> <p class="text">The best finance program in the world won't make a difference if customers don't know about the product. In 1991, the utility's regular demographic and attitudinal survey showed that only 35 percent of its members had heard of ground-source heat pump technology. DMEA set out to change that by "doing everything," as Bony put it, "promoting GeoExchange in our newsletter, sponsoring workshops and running newspaper and radio ads."<br> </p> <p class="text">DMEA sponsors Doug Rye's syndicated <a href="http://www.wapa.gov/es/pubs/esb/2003/03Aug/esb082.htm">"Home Remedies" radio program</a> in its western-most market. Rye also presented several home energy efficiency workshops in Montrose and Grand Junction, Colo., sponsored by DMEA. "The newsletter and Doug's seminars have generated the most interest by far," observed Bony.<br> </p> <p class="text">The Co-Z plan succeeded in raising member awareness of geothermal heating and cooling to 61 percent by 2003. However, the most recent survey revealed that only 10 percent of the members recognized the Co-Z brand name. "Our new marketing goal for the coming year is to talk about the financing plan," Bony stated.<br> <br> </p> <p><span class="subhead">Program takes off when utility starts contractor service</span> <br> </p> <p class="text">In spite of the lack of brand recognition, the Co-Z plan has resulted in the installation of more than 300 geothermal heating systems since 1997, and in the creation of the subsidiary <a href="http://www.intermountainenergy.com/">Intermountain Energy One</a> to get the job done. "The last thing we had in mind was starting a heating and air company," admitted Bony, "but financing alone just wasn't getting the program moving."<br> </p> <p class="text">The utility invited manufacturers in to talk about the Co-Z Energy Plan but local contractors showed little interest. Finally, Van Bourn, an HVAC professional, recommended that DMEA start its own contracting service and offered to become the first employee. "That was what we needed to jumpstart the market," Bony said. "It wasn't our original intent, but it was part of the big, messy process called market development."<br> </p> <p class="text">Intermountain Energy now boasts 11 employees and 227 installations for DMEA alone—140 under the Co-Z plan and 87 more sold outright. Through a joint marketing agreement with <a href="http://www.gcea.coop/">Gunnison County Electric Association</a>, <a href="http://www.gvp.org/">Grand Valley Power</a> and <a href="http://www.smpa.com/">San Miguel Power Association</a>, the contractor has installed 26 ground source heat pumps outside DMEA's service territory.<br> </p> <p class="text">The overall number of installations has grown almost exponentially every year, from 26 systems in 1998 to more than 70 in 2003 and 58 in the first quarter of 2004. More than 60 percent of all the geothermal installations in DMEA's service territory have been sold using the Co-Z financing program. Based on the amount of loans DMEA financed through the program, the Co-Z Energy Plan has added more than $1 million in value to the overall assets of the cooperative.<br> <br> </p> <p><span class="subhead">Adaptable program could benefit other energy providers<br> </span></p> <p class="text">The <a href="http://www.aesp.org/">Association of Energy Services Professionals International</a> honored DMEA's initiative and innovation with its 2003 Award for Achievement in Energy Services. The award recognized not only the success of the Co-Z Energy Plan but its flexibility. Utilities and energy services companies throughout the country could adapt elements of the program, such as its choice of energy-efficient technology, to meet customer retention and load-building goals.<br> </p> <p class="text">Meanwhile, DMEA is adapting its promotion of GeoExchange systems to reach small commercial and institutional markets. In early 2004, Intermountain Energy, working with Par Mechanical and EnLink Geoenergy Services, Inc., installed 120 tons of GeoExchange capacity in the Montrose County Health and Human Services Facility, the equivalent of 30 residential units.<br> </p> <p class="text">Businesses, after all, can benefit at least as much as homeowners from year-round comfort and low energy costs. If there is one conviction guiding DMEA, it is that every member should be able to enjoy the benefits of energy-efficient technology. Even if the co-op has to start a few new businesses to make it happen. <br> </p> </div> </td> </tr> </table> </td> </tr> </table> </div> </body> </html>