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Partners in Efficiency

Originally published
Originally published: 3/1/2010

Large electrical utilities are promoting hvacr contractors through pre-qualified referral lists.

HVACR contractors have expressed concern over the practice of energy utilities offering contracting services. Some utilities might do so yet today, but fortunately, this practice seems to be turning around to benefit contractors by actually connecting them with new customers.

Large energy providers are beginning to actively partner with hvacr contractors to make it easier for utility customers to implement energy-saving improvements. They are doing so by pre-screening contractors and auditing their work in order to provide a current list of recommended local contractors for hvacr replacement, repair, and maintenance. (Some are doing the same for other categories of contractors, such as lighting and office equipment.)

The referral lists are not simply “come-one-come-all” directory listings. Contractors must apply, meet certain criteria, and undergo training to make the list; and then they must demonstrate that they are actively performing quality work to remain on the lists. Also, it is the contractor’s job to tell their market that they are on the list and what it means. The pay-off, of course, is more work and new customers.

Southern California Edison (SCE), which provides power to nearly 15 million people, is a leader in this practice, according to Paul Kyllo, a senior program manager for the utility’s hvac program area and chairman of the Western HVAC Performance Alliance. The company offers a downloadable list of qualifying hvacr contractors on its Web site and encourages consumers to use it.

“Contracting is not our core focus,” Kyllo said of the Contractor Referral List of about 30 hvac companies. “We’re trying to help our customers implement solutions and facilitate the transactions by getting the parties together.

“Prior to offering this list, customers would want to participate in our programs, but there was no easy way for them to find contractors who fully understood the program requirements.”

Kyllo said that Edison International, the parent company of SCE, tried to provide its own contractor services through another subsidiary about 15 years ago, but was not successful. Turns out, that failure was a good thing because as energy conservation became more crucial, SCE found partnering with hvacr contractors is a better model. This is particularly true as the dual trends of rising demand and rising rates has led to increased consumer attention on energysaving equipment and a push by energy providers to meet demand in part by ferreting out wasteful consumption.

“The area of hvac is a huge focus of SCE and all of California because our summer peak load is due completely to air conditioning,” Kyllo explained. “We have a big emphasis on reducing that peak demand. So this program gives us the benefit of making sure systems are designed properly to avoid oversizing. Another benefit is helping to make sure things are installed correctly, such as making sure that air flow is correct so that system capacity is realized, duct leakage is dealt with so we’re not wasting energy, and the system is charged correctly. It’s a holistic approach to make sure everything is done right from the start.”

SCE’s list includes both residential and commercial hvac contractors. In order to make the list, a business must:

• Have at least half of their technicians certified by NATE.

• Participate in SCE’s “Quality Installation and Maintenance” program training, which currently lasts four days and includes such topics as ACCA Manuals J, D and S and system commissioning.

• Sign an agreement that allows for open inspection of all work by SCE inspectors.

If contractors make the list but are not actively performing work through it, they will be dropped. Kyllo said, for example, SCE just dropped 40 companies that had not completed any work in the past year.

According to Andy Reade, corporate vice president of Burgeson’s Heating and Air Conditioning, his company has completed 100 to 120 jobs from the SCE referral program since September of 2009. His company continues to receive about three calls a week from the list.

Burgeson’s is one of the contractors that has benefited the most, Kyllo said, because they are good at marketing in general, and therefore good at marketing themselves as a member of the SCE program.

“There’s a handful that do quite well and get a high response,” Kyllo said. “There are others that are not really marketing that they are part of the list, and they don’t get as much work. Also, we have different performance levels on the list, so we really highlight the guys who do a lot of good work and de-emphasize those who don’t do a lot of work. We do that to create a little competition.”

Kyllo said it is too early to tell if the program will indeed decrease peak load (SCE began promoting the list last year), but anecdotally, he and contractors know that customers have made improvements they otherwise wouldn’t have specifically because of the list.

“Most customers we talk to think it’s great that we have a list of contractors that have had some level of scrutiny and that we are coming in behind it and verifying the work that they do.”

Tonya Vinas is a previous editor of HVACR Business.

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