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Contractor Training Key to California Utility's Loan Program
Until 1995, Pacific Gas and Electric Company (PG&E) in California gave customers rebates for purchasing energy-efficient products. Now the utility does not consider rebate programs cost-effective, and is instead helping customers obtain low-interest loans for installing certain efficiency measures. The program saves summer peak load for PG&E by providing loans from $1,000 to $15,000 for customers who buy efficient air conditioners, insulation, and low-E windows from approved contractors.

Recognizing that qualified contractors are the key to actually achieving the energy savings in a loan program, PG&E has made contractor training the cornerstone of its program. To participate, contractors must be certified by the Electric and Gas Industries Association (EGIA) and must attend one-day classes covering basic information about the products they sell and install. Instructors at PG&E's Stockton Training Center explain details of PG&E installation standards, common problems caused by improper design and installation, and the use of improved materials and procedures. In the second half of 1995, PG&E offered eight of these classes, and 146 contractors attended. (The windows classes were the most popular.)

In addition to these required courses, PG&E is offering more in-depth training in 1996. Classes include Installing High-Performance Windows to Reduce Call-Backs and Increase Customer Referrals, Using Diagnostic Equipment to Sell Your Business, How to Diagnose and Seal Duct and Shell Leaks, and Introduction to Indoor Air Quality. Contractors pay $90-$160 per class, which covers most of PG&E's costs. They pay a reduced rate of $55-$75 for the mandatory courses.

PG&E does not provide the loans directly to the customer. Instead, Volt VIEWtech, a utility services company, is serving as the primary lender, and Fannie Mae has agreed to purchase the efficiency loans. PG&E customers apply directly to VIEWtech, which processes the applications and conducts credit checks. VIEWtech bundles the loans and transfers loan obligations to Fannie Mae. To date, VIEWtech has approved over 4,000 loans totaling more than $20 million.

PG&E will spend $1 million on administration and advertising for the program in 1996. The utility is marketing the loan program through billing inserts and newsletters. In addition, when customers call in with energy questions, they are informed about the program and referred to EGIA-certified contractors. Contractors are also doing their own marketing, sometimes getting together for cooperative efforts facilitated by EGIA. PG&E provides brochures that contractors can stamp with their company name.

Since much of the contractor training costs are recovered by class fees, PG&E considers the program to be very cost-effective. And the contractors who participate certainly benefit from the utility's marketing and referrals. However, there are many measures that are not covered in the loan program, which focuses only on reducing peak cooling loads. PG&E is planning to introduce more measures to the loan program within the next year, including measures to reduce natural gas consumption. The broader the scope of the program, the more likely it is to encourage accurate assessment of customer needs using a whole-house approach.

-Jeanne Byrne


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