Fuel Oil News

Fuel Oil News May 2016

The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding

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Page 36 of 51

www.fueloilnews.com | FUEL OIL NEWS | MAY 2016 37 WITH A SUCCESSFUL REAUTHORIZATION BEHIND IT, the National Oil Heat Research Alliance is finally up and running as it serves the industry. The ongoing process has also begun on how best to utilize the funds available to fulfill its congressional mandate. That money is divided up for a range of purposes. Some of it is set aside for research and development, some for improving indus- try safety, some for technician education and for promoting the move into Bioheat. While there is money reserved for industry promotion and consumer advertising the current reautho- rization shifted some of that into other areas like research and development. Compensating for that is the ability to use some of the funds available to associations in the other core areas to support a rebate program that encourages energy efficiency and safety improvements. NORA has now established a rebate pro- gram that is being integrated into a number of states. The program is highly flexible to both the state associations and dealers. PROGRAM FEATURES The program is only available for oil heat appliances and tanks. These include boilers, furnaces, burners and controls. The new equipment must be more efficient than the old equipment that it replaced. While not an efficiency upgrade, tanks are included because they represent a safety upgrade. While both underground and aboveground tanks can be replaced, the replacement has to be an aboveground tank. The program is administered through the state associations that serve the industry, but it is open to both members of those associa- tions and nonmembers. Currently the program is underway with Oil Heat Comfort Corp. (Long Island), New York Oil Heating Association, Upstate New York Energy Association, Hudson Valley Oil & Energy Council, Connecticut Energy Marketers Association, NC Oilheat, Virginia Petroleum, Convenience and Grocery Association and Fuel Marketers Association of New Jersey. It is under consideration in Pennsylvania. Operating within the basic NORA requirements, each asso- ciation has a significant amount of flexibility in implementing the program. For example, some require a minimum efficiency for the equipment upgrade even though NORA only requires it to be better. Some associations are similarly looking to link the NORA rebates with various state incentives that might exist for efficiency improvements and dealers within the industry can offer matching or complementary rebates. Once on board, there is a registration period where an asso- ciation would send a letter out to every dealer in the state that is possible to identify to let them know about the program. The deal- ers are then given a window of opportunity to register. The associations currently have a pool of funds to work with that could range from $75,000 to $150,000. Some associations are allocating that money by the amount of gallons delivered. Some are using a flat number of rebates per company, such as 10 and a flat fee for the type of upgrade. Each association determines how much money is in the pot, how much is available for rebates and then determines which types of equipment they are going to cover. "I've been here for 34 years and this is the most exciting program that we have done during my time," said Kevin Rooney, CEO of OHCC. "I think it is so positive and it meets all of the goals of the association and our industry--more efficient equipment, saving customers money, burning a cleaner fuel--this helps accomplish all of the things we talk about." OHCCis acknowledged to be farthest along in the process, having begun in the fall of 2015 with a launch on Jan. 1 with about $100,000 of its NORA money. This was allocated based upon the gallonage for each of the companies that went through the sign-up process. That included virtually all of its members and numerous nonmembers. OHCC issued more than 200 rebates in the first quarter of 2016. "The beautiful thing about this is that the customer doesn't have to do anything. The company files on behalf of the cus- tomer," Rooney said. He noted that OHCC decided to send out the checks directly to the customer instead of sending them to the oil company. "If you say we're taking $300 off the price because we're getting a rebate that sounds like some marketing message. I wanted the benefit of being able to send a check and a nice letter out to every homeowner," he said. The HVOEC program offers each dealer 10 rebate slots, as long as the dealer sells oil as well as provides HVAC services. A customer can receive $500 for a heating appliance upgrade and $250 for a tank. "It's an exciting thing to be able to offer customers rebates, espe- cially in this economy," said Leann Panebianco, manager of Stony Point, N.Y.-based Panco Petroleum and HVOEC president. "People are still struggling, and a lot of people view having to replace their heating system as not particularly exciting compared to other things they could do with the money. Any time we can offer a customer a rebate or a discount or something like that it is an exciting thing." How each company offers those rebates is also flexible. For example, Marlboro, N.Y.-based Porco Energy Corp. is looking BY KEITH REID NOR A Rebate Program the REWARD YOUR CUSTOMERS FOR UPGRADING TO MORE EFFICIENT HEATING APPLIANCES AND SAFER TANKS

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