Utility Marketing Success Stories developed by 
Intermountain Energy, a DMEA subsidiary

Co-Z Energy Plan

geothermal heat pump financing by DMEA


   The Co-Z Energy Plan geothermal heat pump financing program is central to DMEA’s success in transforming the market for 
   heating and cooling systems in Southwestern Colorado.  More than 500 geothermal heat pumps have been installed in a market 
   that was traditionally electric resistance or propane furnaces with an evaporative cooler.

 

 

Goal: 

DMEA’s energy efficiency vision is to develop technology-based marketing initiatives that strengthen customer loyalty, increase net kWh revenues and support renewable energy initiatives. Further, DMEA has a public goal to promote “best practice” energy efficiency strategies that reduce members’ total ENERGY use by 25%.  They believe they can increase member loyalty by helping members save gas & propane, too.

Description: 

According to ENERGY STAR®, geothermal heat pumps are the most energy efficient and earth friendly space heating and cooling technology.  These systems can provide year-round comfort at an annual operating cost savings
of up to 70% as compared to propane furnaces and standard air conditioners.   

 DMEA identified geothermal heat pumps as the best tool to help them recapture electric heating market because it
had the highest lifecycle cost return for members, best load factor for the utility and offered an environmental benefit because the majority of the system’s energy is derived from the earth.  But DMEA also identified these market barriers: higher installation cost, installation contractor disinterest and limited consumer awareness.  In response, DMEA created the Co-Z Energy Plan.

 Most people would like to have a superior heating and cooling system, but don’t want to make the upfront investment in higher efficiency equipment.  The Co-Z Energy Plan offers year-round home comfort for an affordable monthly payment with 100% financing for up to 30 years for the installation of a geothermal heating and cooling system.  As part of the financing process, a certified installation contractor conducts an energy analysis of an existing home (or new home plans) to properly size the system and determine the room-by-room heating and cooling requirement. Then, a computer model is run that shows what the home would cost to heat and cool on an annual basis depending on the system chosen.  Once the system is installed to the customer’s and utility’s satisfaction, one monthly payment on the utility bill covers the entire installed cost of the geothermal system.  In many cases, the combination of the monthly system payment and electricity operating cost is significantly less than the member’s previous or alternative combined electric, gas and/or propane bills for a less efficient heating and cooling system. 

The Co-Z Energy Plan began as a “perpetual” lease with repairs and maintenance, and evolved into a second mortgage type of finance agreement.  DMEA is currently developing an alternative geothermal  loop tariff whereby the ground loops will be utility owned and billed through a monthly fixed fee per ton of equipment.

The financing program remains a lynchpin in an overall marketing communications effort that also included:

  • Geo Comfort Club with an annual dinner and quarterly newsletter for everyone with a system

  • Quality Assurance Plan with established system design parameters

  • Brochures and Newspaper Inserts

  • Workshops and Seminars

  • Builder and Developer Outreach

Member outreach included promoting the technology in its periodic newsletter to all co-op members, in radio and print advertising, and through participation in home shows and energy education events.   Activities targeting HVAC contractors included providing training on the various standards and specifications necessary to install geothermal heat pumps. But these initial training efforts were not particularly effective.  In 1998, DMEA created its Intermountain Energy installation subsidiary to install geothermal systems exclusively.  Other market constraints
were equipment availability.  To overcome this, DMEA invested in CoEnergies, a partnership between DMEA and GeoFurnace Development Inc., the inventor of breakthrough geothermal systems.  Their Geo Hybrid Heat Pump Patent #5,983,660 increases efficiency and comfort of air-source heat pumps by replacing the electric defrost cycle with geothermal defrost cycle.  A demonstration project in Alabama sponsored by the Cooperative Research Network is now underway.

Results:

The CO-Z Energy Plan encouraged members to install a technology that will provide long-term benefits for the cooperative and its member.  By eliminating the first-cost barrier, DMEA created a sustainable and lasting market for geothermal heat pump technology in S.W. Colorado.  This year, DMEA will achieve the 500th system installed in its service territory. 

In a residential load management study, DMEA determined that the average margin from members with geothermal heat pump is $91.05/month as compared to an average margin from all members  of just $56.83/month.  This incremental margin of $34.22/month is worth $410.64/year per geothermal heating and cooling system installed

For the CO-Z Energy Plan to be successfully implemented at another cooperative, it would require: 

  • Installation Guidelines and Quality Assurance Plan to ensure system performance

  •  Detailed Policies and procedures for customer lead and financing processing

  • A long-term commitment to educate employees, members, and potential partners on the benefits of geothermal system installations; and

  • Established relationships or partnerships with an installation contractor

 It is especially important for the cooperative as a financing organization to have some type of quality control in the installation process. DMEA’s Quality Assurance policy is designed to provide installation contractor, the customer, and the financing organization with assurance that each installation will conform to the program requirements.

To learn more, visit www.dmea.com and www.intermountainenergy.com or contact:

DMEA (utility program sponsor)

Paul Bony, Members Services and Marketing Manager, (970) 240-1278, pbony@dmea.com

Tom Polikalas, Communications Supervisor, (970) 240-1245, tpolikalas@dmea.com

Intermountain Energy (program design consultant and installation contractor)

Ed Thomas, Market Development Manager, (970) 209-8347, ethomas@intermountainenergy.com

Developers of Utility 
Marketing Success Stories

  Delta-Montrose Electric Association (DMEA) created its Intermountain Energy subsidiary so other electric cooperatives could share in the benefits of its program design and implementation experience and expertise for energy efficiency, renewable energy and load management. 

Consulting 

Ed Thomas of Intermountain Energy - plus Paul Bony and others from DMEA’s staff  - are available to consult with you from our Montrose, Colorado headquarters or at your location.  Our consulting fees start at $1,000 to consult with you for as little as one day on program-specific as well as general topics related to marketing, sales, communications, member service and project support.  Also, we can also call upon other leading consultants in energy efficiency, marketing, and analysis to bring together a specialized team of industry experts to provide solutions to challenges.  Based on your needs, we may conduct preliminary research on your programs, product and markets, and afterwards, follow-up with a summary of the items discussed and specific, actionable next steps. You are guaranteed to gain a minimum of three ideas that you can implement immediately. 

Research Reports 

We can research, write and/or present articles, white papers, case studies, newsletters, and reports on a variety of industry subjects as well as more general customer service and marketing related topics.

Education/Training Workshops 

We are available for your regional, statewide and in-house training, education and outreach activities.  Presentation lengths can range from a 45-minute presentation to a ˝ to full day interactive workshop or staff retreat.  Content will
be customized for the audience and situation – from senior management to customer service staff to all employees or community/industry leaders.

Strategic Assessment with Tactical Punch List 

Our primary objective is to rapidly assess your market position and goals, and get your team focused on the appropriate deliverables to achieve your goals within pre-established time and budget parameters. Together, we outline an action plan based on your highest priorities and we expend the time and effort needed at your location or ours.  Once our Strategic Assessment is validated by you, we will create a Tactical Punch List with actionable tactics to be planned and executed within a within your established timeline and resource parameters.

Program Design and Implementation 

  Allow us to augment your program marketing and sales support staff on an on-going or as-needed basis. We can help you accomplish your tactical marketing “to do” list in ways that immediately position you for new sales in ways that are consistent with your strategic corporate vision. We will work alongside your key staff in your office or from our location for a pre-determined number of days per month to better understand your goals, objectives, capabilities, needs and expectations.

To learn more, visit www.intermountainenergy.com, www.homeenergymakeover, and www.lightbulbfundraiser.com and contact: Ed Thomas, Market Development Manager, Intermountain Energy, (970) 209-8347, ethomas@intermountainenergy.com.

 

Developer Staff Resources           

Ed Thomas, Market Development Manager, Intermountain Energy 

Ed is Market Development Manager of Intermountain Energy, a subsidiary of Delta-Montrose Electric Association.  For DMEA, Ed developed and launched nationally-recognized energy efficiency programs, including the Co-Z Energy Plan financing and GeoExchange Comfort Club, Light Bulb Fund Raiser, and Home Energy Makeover Contest.  During Ed’s tenure, Intermountain Energy has doubled its sales and installation capacity of geothermal heat pumps, and established marketing relationships with neighboring electric cooperatives. 

Ed is a prominent conference presenter and trainer at national and regional energy industry events.  Ed authored an industry report on Home Energy Audits, co-authored a report on Load Management Programs, and published reports on Home Energy Loans and Geo Heat Pumps for the Market Development Group.  For MainStreet Networks, Ed helped reposition the company from an automatic meter reading manufacturer to an affinity marketer of residential Internet gateway services. He also championed the corporate refocus on mass market customers of cooperative and municipal utilities instead of large customers of investor-owned utilities.

For Volt VIEWtech, Ed helped reposition the company from being a demand side management program provider to a residential customer program implementer. While there, Ed introduced first Internet-based home energy and water bill analyses linked to utility web sites; helped create residential finance programs with FannieMae and EPA Energy Star; and chaired the Marketing Committee of National Home Energy Rating Council in Washington, DC.  For the Edison Electric Institute, Ed revitalized meeting activities; doubling attendance to over 2,500 for 20 annual conferences.  He also served as national spokesman regarding billing, call centers and meter reading.

Ed earned an M.S. in Marketing from The American University, Washington, DC; and a B.S. in Communications from Butler University, Indianapolis. Ed served as a U.S. Navy spokesperson during Desert Storm, quoted in USA Today. He presented Pentagon briefings for senior officers and was awarded the Navy Achievement Medal.

Paul Bony, Marketing and Member Service Manager, Delta-Montrose Electric Association 

Paul has over 20 years with investor-owned and public utilities in operational auditing, office management, marketing, energy conservation, rates, program development, water conservation, distribution planning, gas and electric demand side management, fuel cells, photovoltaics, compressed natural gas for vehicles, heating and air conditioning, satellite television programming distribution, and customer service.  He has worked for four utilities (one electric, gas and water investor owned utility, one public power and two cooperatives) as well as in the food processing industry, energy consulting, and in heating and air conditioning. He earned his M.B.A. from University of Nevada, Reno with Beta Gamma Sigma honors, and a B.S. with honors from Kansas State University’s College of Agriculture.

Tom Polikalas, Communications Supervisor, Delta-Montrose Electric Association  

Tom has published articles on energy efficiency in several national trade journals including Building Operating Management, and regional published articles on sustainable construction practices in newspapers (CA/CO/NV) and other publications, including Builders’ Magazine and Builder/Architect.  Tom was Director of Nevada Recycling Coalition, a Reno based non-profit, where he coordinated more than two dozen events, including the Building Sustainable Economic Growth Conference, a multi-state event funded through public/private partnerships.  Tom has also worked for Plumas-Sierra Rural Electric Cooperative, Nevada Division of Environmental Protection, Governor’s Office of Community Services, National Energy Management Institute, and Nevada’s Office of the Advocate of Consumers of Public Utilities.  Tom earned a B.A. in Economics from University of Nevada, Reno with graduate studies in Economics at Brigham Young University.

Intermountain Energy can also access the staff  of  its parent company to meet your needs.