New residential efficiency program will guarantee utility bills

Home builders will be able to guarantee heating and cooling bills as a way of marketing new high-efficiency homes to home buyers under a program approved Tuesday by the N.C. Utilities Commission.

The program pushes new efficiency boundaries by enticing customers with guaranteed savings as opposed to a mere promise. As part of the guarantee, customers who get utility bills that exceed the guarantee will qualify for reimbursements.

Under the program, Progress Energy will pay the home builders up to $4,000 per home for meeting the strictest efficiency standards. Qualifying homes will have to be significantly more efficient than homes with the federal Energy Star rating.

It's not clear when Raleigh-based Progress will begin offering the program to home builders, and when the builders will begin offering billing guarantees to their customers.

Before Progress can begin the program, the company will have to submit further details to the Utilities Commission. At this point it's not known how the billing guarantees will be phrased or what they will promise.

But regulators expect that home owners will be held to strict standards to prevent them from wasting energy and then submitting claims for reimbursements.

"No building is going to make that kind of guarantee without some sort of restrictions," said James McLawhorn, director of the Electric Division within the Public Staff, the state's consumer protection agency in utility rate matters.

Under the new program, Progress will pay builders between $1,000 and $4,000 per home, based on a home's efficiency rating. The builders of those homes will be able to offer billing guarantees to their customers.

Progress will be able to recoup its program costs by spreading those costs across all its customers through utility rates. Those costs include home builder incentives, program monitoring and marketing.

The builder will have to take the liability for the billing guarantees.

"They better be damn good at computer modeling or they'll be paying out all the time," said Adam Stetten, a Raleigh realtor and home efficiency consultant, when he heard a description of the program.

Progress Energy won't be the first in the state to offer a program linked to billing guarantees. Raleigh nonprofit Advanced Energy offers such guarantees for efficient homes built by Habitat for Humanity.

Progress has 10 days to submit details on the billing guarantees. The additional information is conditioned in the Utilities Commission approval and was requested by the Public Staff.

"The reason I'm asking is because I want to be able to deal with consumer complaints should they arise," said Public Staff engineer Jack Floyd. "If we end up with a lot of complaints then we'll have to revisit it, but I don't expect any problems."