ComEd Rebate/Incentive Season Opens
7.12.2009
Filing Pre-Application is Recommended
Move Quickly – or Wait Till Next Year
As of June 1st, ComEd (and DECO for municipalities) started the second year of re-distributing rate-payer money for energy efficiency measures. Last year ComEd re-distributed $8 million in the business program. That money was snapped up in short order, leaving customers wanting for financial incentives. This year there is $16 million allotted for the program. Considering there are many customers who were crowded out last year, who are ready to move forward with "last-year’s" projects, the money may not last much longer this time around. To be successful in securing funding this time around, business customers must move precisely and quickly. The program is very similar to last year’s – but there are a few changes. On the negative side, Compact Fluorescent Lamps (CFLs) and variable speed drives for chillers have been removed from the list of prescriptive measures. On the positive side, some of the paper work has been simplified. The maximum rebate for each facility is $300K. The process has been simplified, but in one’s eagerness to secure a rebate, some simple steps could easily be glossed over or ignored. The following is a listing of action items to take which we believe will make your project more successful in securing supplemental funding.
Keys to Success
#1 – Know which measures are eligible. Just like last year there are "prescriptive" and "custom" measures that are eligible. Prescriptive measures have the incentives defined for each eligible measure. Included in the list of Prescriptive measures are: lighting, HVAC, motors and chilling. For each prescriptive measure, ComEd will tell you what is eligible and the level of the incentive. If you have an energy efficiency measure that is not listed in the Prescriptive list but does save a quantifiable amount of electricity, a custom application can be filed.
#2 – File a pre-application/reservation as soon as you have your project scope defined and the equipment chosen. This allows ComEd to tell you what’s wrong with your application and whether the project qualifies for a rebate. Once the project is prequalified, ComEd sends out a reservation letter. The reservation letter ensures that funding is set aside. Therefore, if you adhere to all the guidelines and rules, and your project is completed in a reasonably timely manner, you will receive your rebate. ComEd recommends that all applicants file pre-applications in order to avert disappointment; and pre-application is required for all Custom measures.
#3 – Only projects started after April 1, 2009 are eligible for this year’s incentives. If your project started prior to that, you’ll have to either find another project or you’ll have to work on segmenting the project so remaining work can satisfy the timing requirement for this year’s incentives.
#4 – Don’t waste time implementing your project. ComEd gives you 90 days to complete the project after it is approved (i.e., you receive your reservation letter). They have been lenient in the past (and most probably will continue to be lenient) giving extensions to those who can’t move fast enough. However, if the program is over-subscribed, ComEd may be under pressure to get projects completed and, therefore, may assume a more aggressive position in completing projects. It is in your best interest to get the project completed quickly so you can capture the energy savings.
#5 – Make sure the project is installed as planned. Last year several applicants changed their project which rendered their incentive payments ineligible. If you are anticipating a change, check with ComEd. Because this program is subject to an audit on many different levels and it is being administered by the local utility, everything has to be done "by the book." Unlike the state’s college system, this process is govern by ICC rules; therefore, favoritism is not allowed or tolerated.
#6 – The final application for funding has to be submitted within 60 days of completion of the project. Again, why would you procrastinate if they owe you money?
#7 – Keep your paper work. Because there is the timing issue and the scopes are narrowly defined for Prescriptive projects, keeping your paperwork can only help you. All measures are subject to audit and a small number will definitely be audited to ensure compliance.
Getting Management to Contribute $ All of the above are the mechanics of securing rebates/incentives from ComEd for worthwhile energy efficiency measures. That’s the easy part of the process. The difficult task in today’s tight-money environment may be wrestling the non-ComEd incentive portion from management. The rebates/incentives cover approximately 25% to 50% of the total project cost. That means that the customer has to come up with the lion’s share of the funding. And with the recent low in commodity energy prices, there is less financial incentive to invest in energy efficiency. So how does one get management to pony up their share?
Argument #1 – With lower commodity costs today, we should spend the surplus of what we’ve budgeted for utilities and invest it in our physical plant as energy efficiency measures. Although energy prices are low today, as the economy and prices recover, investing today in energy efficiency will position us favorably to reduce utility expenses. If we had done that in 2002 when prices plummeted, we’d be in much better shape today.
Argument #2 – If our competitors are investing in energy efficiency and we don’t, we’ll be at a competitive disadvantage once the equipment starts producing energy savings.
Argument #3 – (Note: This argument is especially good if your company invests in renewable energy certificates.) If we invest in efficiency, we can not only reduce utility expenses, but also reduce our carbon footprint to benefit the environment. Argument #4 – If we add some of our own money to the rebates/incentives, we can get more money from ComEd than we paid into the energy efficiency program.
It doesn’t matter what reason works for you as long as you invest in energy efficient measures and receive some subsidy from this ComEd-run program. You’ll be better off than if you stand by and watch others use the money you contributed to the program.
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