(Draft for review)     Personal Observations and Comments about the CEFIA

Geothermal Rebate Process of the past 2 1/2 years.

Background:

At the March 16, 2012 - 9:00 am Board meeting of CEFIA in Rocky Hill, CT,

Peter Tavino was the only person to express comments during the three minute per person Public Comments segment.

Recording secretary Shelly generalized my comments for the minutes the next day, and emailed me Saturday that

if I would like my exact statement used, please email her a copy of what I read:

I replied I would have them for her at "the Top o the mornin" (after my St. Pat's event that night.)

Here is that statement thus emailed:

Following this, at teh Board meeting, David Ljungquist was asked how much has been rebated so far. David responded that only $140,000 is left until April 30 or so.

Catherine Smith asked me if I had further comment. I asked if I should speak now. She said Yes.

I said There is a difference between how much has been paid out, versus how much has been approved for payment.  David implies that $4.36 million has been paid out, which is untrue.

Catherine Smith said "Would you please send us your written comments?"
I said "Yes. Thank you." And there was no further discussion of my comments for the two hour meeting, which I witnessed, but like other citizens, could not speak anymore.  There was virtually no discussion of geothermal, except that there were (37?) programs administered, implying geothermal was one.  (I look forward to serving on a CEFIA geothermal subcommittee some day that can meet between the CEFIA quarterly meetings.)  Solar Thermal and PV programs were presented.  I recall that when John Olsen asked if Cape Wind jobs might be available (for his labor union constituents?) Commissioner Daniel Esty implied in the negative for now. Commissioner Esty did remind the board at one point about the importance of inexpensive natural gas to CEFIA programs.  My personal sense was that this board meeting was not the usual celebratory meeting of success as in the past.  The new leaders seemed more alarmed for the direction CEFIA is taking, in my opinion.  Commissioner Esty also addressed with Norma Glover, CCEF history.

After the meeting I outlined these 15 points for my written statement.  They follow.

It is my desire for beneficial closure to the ARRA funded program ending in about a month and a way to move forward now.

I also decided to detail each point below on this website.  I promise to log in any revisions I post based on comments received or changes I make.

Constructive Comments on how CEFIA can be more efficient going forward:

1. Report actual dollars sent in checks to property owners who installed geothermal, not amounts approved.

2. Have more informational meetings with interested geothermal folks.

3. Report on the negative impact to nonresidential geothermal by Davis Bacon.

4. Eliminate the 30 day delay for State Historic Preservation Office review of geothermal projects.

5. Enforce the approved contractor requirements, and the 30 day delay.

6. Eliminate CEFIA because no technical service beyond the utility companies' review was ever provided.

7. Release the secret (inferior, but collected) energy data in the application forms, without delay.

8. Define CEFIA Goals and measure accomplishment in real time, other than just $ approved.

9.  Move from the 19 and 34 page forms to a one page on line form as submitted.

10. Remove obstacles from geothermal at the state level such as the improper 50' separation to septic systems.

11. Report on harm done to geothermal by the competing and subsidized Home Energy Audit program.

12. Consider feedback from CT folks before hiring a Colorado consultant with no CT geothermal experience.

13. Report on all ARRA money not used directly for rebate.

14. State in original application, not hidden final application form that rebates are taxable income.

15. Improve the CCEF/CEFIA web site by accepting comments & documenting each time a change is made by its webmaster.

My credentials to comment as an individual against a well financed "quasi governmental body", which has all the data, not me:

include a presentation of CCEF in Colorado in 1010 at my own expense, and involvement with the program from its conception, having completed probably the first CCEF rebated installation in 2009.  I see patterns from my own limited project experience at variance with the success being reported by CEFIA. I hear comments from other Connecticut Geothermal Association members.

Everyone who knows me, knows I only wish to promote what I feel is a beneficial energy source for Connecticut.  I do not mean to criticize any individuals, but offer these observations this Sunday morning in a positive, constructive manner.

Here are more detailed explanation links to the 15 points outlined above.

1. Report actual dollars sent in checks to property owners who installed geothermal, not amounts approved.

My own web site reports that my clients have been approved for $150,000 in rebates, but about one quarter of them will not apparently complete work in time to receive the rebate. Extrapolating that tells me other approved projects will also not be reimbursed.

The 8 ton pond loop multi family residential, saw the Davis Bacon requirements as not worth pursuing.  Two other jobs have been non communicative with me through another general contractor.  One job paid me gratefully in full to allow another installer to work to his own satisfaction, but I understand the revised paperwork was never filed.  A last job has been delayed for 6 months through a zoning issue, and no driller or HVAC contractor is yet selected.  My latest job asked not to be involved with the CCEF/CEFIA rebate, although my written agreement allowed for it.  The consensus is that the big Fairfield County projects are not interested in CEFIA rebates and conditions.

When David gave me a spreadsheet to help with my Colorado presentation, I grew alarmed that only a quarter of fees were paid out with one half the time to go, even though more than half the budget was "approved".  It is this ratio that I requested to know at the March, 2012 CEFIA meeting.

2. Have more informational meetings with interested geothermal folks.

There was only one meeting conducted at Rocky Hill Town Hall by David at the start of the program in October or November 2009, and then not another one ever again.  David did appear at one Association meeting, and answered some questions.  Mostly his conference appearances seem to cover more solar thermal and PV interest than geothermal. This resistance indicates program problems to me.  Since CEFIA is not accountable to installers, which with it interfaces, it need not meet with them.  Conversely, if a private contractor was asked to meet or explain work, and did not, its competitor would be used instead.  But if the state asks a contractor for something and it is not forthcoming, the permit or rebate is simply denied.  This is government control without accountability.  And why should David be the only one to meet with constituents?  CEFIA board members would be welcome too.  David does respond to phone and email questions, but one on one replies are improper, unfair to meek competitors, and the information should be disseminated more widely. The website publishes sunny statistics only.

3. Report on the negative impact to nonresidential geothermal by Davis Bacon.

How many commercial projects received rebate money these past two years? The web site simply speaks to an average tonnage of 40.7, but will not tell us how many.  I am familiar with at least three. One was a giant school that received a big refund (in line with program goals to give so much to so few?) another was the CT Landmarks, who had their rebate delayed for many many months as DB paperwork issues delayed them.  My single commercial rebate program also involved different versions of the DB form, instead of one consistent form for all to follow.  My client was frustrated for months unnecessarily.  A last CCEF/CEFIA application package of mine in Nov. 2011, for $80,000 in rebate was not submitted by the client, partially because of unknown DB costs.  When the Federal Dept of Labor presentation was made to us a few years ago in Hartford, she forgot the power point, and the presentation, never repeated, was a fiasco.

Many times, the CCEF board was asked to grant leniency, on this non AARA requirement, but John Olsen as vice chairman persuaded the others to  keep DB.  So what was the result?  How much should have been for commercial, and how much damage to the commercial market was done by insisting on prevailing wages that made many of them non affordable?  To his credit, David did not interfere with requests for common sense here.  But only he, not the regulated community, knows the impact.  So how many commercial projects were rebated?

4. Eliminate the 30 day delay for State Historic Preservation Office review of geothermal projects.

The SHPO should be ashamed of itself for what it has done to set back geothermal in Connecticut. Again, David has recognized the harm and tried to mitigate, to no avail.  We all understand the negative visual impact of wind turbines and solar facilities mounted to historical building roofs, etc. But underground geothermal should have been exempt.  Instead, we have the possibility that underground native American artifacts could be disturbed.  Coming down from the Federal government, our SHPO refused to apply common sense, and instead protected their work claiming to be understaffed!  What they did with the useless color photos of the front of each house, having nothing to do with buried geothermal is beyond me!

My experience with SHPO is that near the casinos, the projects that were suspected of impacting Indian civilizations, simply laughed, withdrew their CCEF application (but remained as part of the approved totals never to really be paid out?) and went forward without the archaeology study, and without the rebate.  Many owners did not want their properties dug up by "archaeology students, etc." who might then impact their ability to do additional unrelated excavation work on their land.  

I have documented what happened to my horizontal loop and can report such if asked.  In summary, the state archeologist misread the map and selected the wrong watershed. So my client had to undergo the survey dig, -this next to his swimming pool and in an area that once was a Christmas tree farm, disturbing soil far more than the geothermal.  There were at most 1/2 inch long quartz flake chips found, that may have been from tool making scrap a thousand years ago perhaps.  This caused taxpayers through CCEF to pay $4000 to an archaeologist who prepared a report I never saw.

I redesigned the loop away from test pits that had any chip flakes. I felt that less expensive horizontal loops ($13,000 vs $20,000 to well drill) were singled out by the geothermal inexperienced state archaeologist.  This redesign required compromise, preventing us from using superior deep soiled meadowland as planned and to extend into areas with more shallow ledge to avoid digging up and reburying "flakes".  My client was very understanding, but did not need this.  What other archaeology impacts to geothermal occurred that CEFIA knows about, but we do not?

No one appreciates history more than me, (I am on my 5th of a 6 year volunteer term on my local Historical Society Board of Trustees) but this government strong arm control and delay is another anti business example.  It does embarrass Hartford by making for good laughing and eye rolling by workers in the know.  I am pleased that future CEFIA work unrelated to Federal control will separate us from the archaeology ball and chain around our ankle.  What a drag on CEFIA efficiency!

5. Enforce the approved contractor requirements, and the 30 day delay.

We approved CT geothermal installers enjoy a camaraderie with each other especially through the newly formed Connecticut Geothermal Association.  But we still compete with each other.  In our other ventures, we are regulated by building and health inspectors, etc. through our licenses.  Once listed on the CCEF page, there seems to be no check if credentials are still being maintained.

Does the requirement to successfully complete an IGSHPA course mean that the exam must be passed and the person be a listed installer?  If installers switch companies is it monitored?  If home improvement licenses are dropped, is it known?

What was to stop our competitors from starting before the 30 day SHPO delay? There was no enforcement.

The PV staff member at the March, 2012 CEFIA board meeting was praised for reviewing applications in only two days, but so what if SHPO delays everything for 30 days or more?  She was praised for activity not on the critical path.  Similarly, geothermal applications are not reviewed for technical content like a health department sanitarian or a building inspector would review plans.  There is no technical checklist to follow, nor orderly constructive comments provided.  Instead after 30 days the application is approved.

If outside loop jurisdiction was given to local health departments as I suggested years ago, their orderly review and comment process would help. And we would have local geothermal advocates "on the ground".  Instead, idled building inspectors seem to be trying to take jurisdiction.  Apparently the CEFIA consultant who does not install, but sees finished jobs is training them with CEFIA's blessing.

6. Eliminate CEFIA because no technical service beyond the utility companies' review was ever provided.

 CEFIA simply overlaps CL&P and UI in establishing that proper installation has occurred.  CEFIA asks for no additional information beyond what the utilities require, so why overlap them?  Would it not be easier to just use the $4.5 million by increasing the CL&P rebate from $500 per ton for three tons to $2000 per ton extra up to six tons, and let CL&P give out one check for a total rebate?  Sorry that this might eliminate some CEFIA jobs.

It is CL&P who asks for a Verification of Installed Performance VIP (CEFIA now asks for copies from installers too).  CEFIA asks us for the duplicate blower door HES report too.  These redundancies are for what?  At least CL&P asks for the contractor invoice to prove a system was installed.  Fortunately, CEFIA does not invade our privacy like CL&P by asking for costs that are not their business, nor helpful to anyone. It does not help that CL&P thinks geothermal is too costly without understanding the overhead from all the many tire kickers and total lack of advertising or state promotion.

CEFIA sends out its consultant to be sure a system is operating.  But CL&P verifies instead with VIP, AHRI certificate and invoice.  CL&P could request two photos to be sure a loop field was actually installed and a heat pump is in place, and not need a scheduled appointment for the installer or owner to show the CEFIA consultant the heat pump (s).

7. Release the secret (inferior, but collected) energy data in the application forms, without delay.

Why does CEFIA require that the homeowner submit electric and oil bills for one year?  The oil bills are inconclusive if not averaged over a period of several years to determine annual energy to a building.  A half empty tank warps a one year trend.  Recall the criticism in climate change global temperature reporting, where a sine wave is averaged out to show upward sloping average rise in temperature that is not occurring. Similarly a fluctuating fuel oil tank must account for actual oil used each year. In an article I am publishing in May, I recommend using 8 years of oil records for averaging.

My experience with DEP was that for years they collected data on how much wetlands or buffer (with no distinction by the way) was affected by the proposed use. This state form for years was ignored and no one compiled the data to help Connecticut learn how little wetlands we were actually disturbing.   Similarly, where is the data and conclusions on how much fuel oil is being saved and resultant emissions by conversion to geothermal?

Where is the data and publicity on how much heating oil was not burned last year due to Connecticut geothermal?

8. Define CEFIA Goals and measure accomplishment in real time, other than just $ approved.

There are no specific CEFIA goals for geothermal, and they are unfortunately tied to unrelated solar and wind.

Here are good goals going forward in my opinion:

* Lower soot emissions in Connecticut air, by removing oil combustion from homes.  For an 80% efficient furnace or boiler that uses 500 gallons per year, 100 gallons worth go up in smoke into our air.  Using ground source energy instead, complemented by more efficient electricity generated by gas or nuclear, will reduce air pollution.

  * Reduce imported fuel oil, by heating with the ground and a little electricity instead of burning oil.  Reduce traffic by oil delivery trucks.  Reduce possible carbon monoxide poisoning and fire risk and oil leaks into ground water by reducing the fires burning inside our homes.

*  Drop Connecticut's rating from the second most expensive electric rates in the nation after Hawaii.  Do this by reducing peak usage during intense air conditioning summer days by converting air source to ground source heat pumps requiring half the electric power at that critical time.  Reduce the very expensive standby generators for peak summer days.  Help balance usage by supplying a new market for winter electricity at times when demand is low.  Oil not being burned, but electricity being used in winter helps suppliers.  Electrical heat costing 4 times as much as geothermal will be lost too, but electric heat users deserve this efficiency.  Folks without air conditioning who do get it from geothermal and add to peak summer loads are also entitled to this reasonable comfort, as long as it is as efficient as possible for the coolness supplied.

* Use local surcharges and taxes to benefit local businesses.  We all recall the past CCEF secretary leaving to go to work for a solar company in California.  (Solyndra??)  Or was it a company that imported panels from China?  The Financial Times reported 80% plus of US stimulus wind monies were for turbines made overseas.  Geothermal does not have this problem.  The majority of the installation work is for Connecticut workers.  They do more than risk their lives on rooftops installing foreign solar panels.  The poor solar workers must try not to anchor the panels with connections and gaskets that will cause rainwater to enter homes.  They receive a small percentage of the average $35,000 per installation reported for doing the dangerous work.  They are also responsible for being sure the solar systems can withstand a Cat 3 or 4 storm, as yet untested.  There is not the AC DC electrical danger from solar inverters associated with a geothermal heat pump.  And the heat pumps are mostly made in Oklahoma or Indiana or Florida or Michigan, and not overseas so far.  Forget wind that has no business being near people with ears.  CEFIA needs to recognize geothermal's benefits for Connecticut's unique geological features, and stop listening to the solar lobby.

Commissioner Esty attempted to "school" the other Board members by informing them of natural gas abundance favorably impacting the cost of generating clean electricity.  This efficient electricity must be leveraged by using it to replace oil burning with geothermal heating.  Clean gas generated electric power need not be offset with more expensive substitute solar or wind electricity instead.  We have reasonable electric generation from natural gas now.  Let's use it against undesirable oil burning, and not make inefficient solar compete with it by unfair subsidies.  Spending David's valuable time on solar with unfit sunshine in Connecticut diverts his resources away from geothermal, where it is suitable in our type of geology and climate.

A last thought on CEFIA's devotion to solar at the expense of the more viable bedrock generated  energy from geothermal: A homeowner's typical electrical bill is not uncontrollable and budget breaking.  Electric and oil heating costs, can run into the thousands of dollars per year versus about one thousand annually for electricity.  Why go after the low cost item instead of addressing the budget busting heating bill?  Perhaps because REEBA and other lobbying entities exert undue influence.  REEBA did try to remove geothermal from its bylaws definition this January at its annual meeting, but I objected and the membership agreed with me to retain it.  Attorneys make no money from the low key geothermal industry installed by small businesses only.  And CEFIA should see through this and set proper priorities.  Instead they come up with headlines touting $40 million for solar, but nothing for the much better for us geothermal.

*Well drillers need skills developed for military personnel such as team work, alertness, physical capabilities, ease working outdoors, etc.  Connecticut should encourage veterans to obtain the Vertical Installers Certification and after training, ensure that there are adequate geothermal jobs for them, with a sensible rebate program not bogged down in the bureaucracy of the past.

* CEFIA should work to get costs down for geothermal.  The touted $42,000 average per 6 ton system whispered behind the scenes hurts us, and is untrue.  With R410 A heat pump technology advancing and the new plug and play circulator pumps located within the heat pump cabinet, introduced a few months a go, HVAC work is greatly reduced.  Watch for variable speed compressors coming soon with even higher COP's.  The more systems installed and the more competitive, experienced builders there are, the better.  Removing CEFIA regulatory nonsense and delays will also help.  Six tons can be drilled and installed for about $10,000 to $12,000, so the drillers are reasonable (if not held to prevailing wage).  With appropriate tax credits, the loop cost is minimal.  Inside, a $5000 heat pump simply needs hook up to duct work and power.  More competition on a level playing field with many more folks installing geothermal is the solution.

9.  Move from the 19 and 34 page forms to a one page on line form as submitted.

The one page form similar to a typical septic system application form, which I submitted last year was received by CEFIA and ignored.

10. Remove obstacles from geothermal at the state level such as the improper 50' separation to septic systems.

The outrageous mistake of requiring an unbelievably unnecessary 50' separation of horizontal trenches to septic systems appeared in the January, 2011 state health code.  CEFIA was told and did nothing to correct it.  This has devastated any fledgling inexpensive horizontal loop business that should have evolved from the ARRA funds.

11. Report on harm done to geothermal by the competing and subsidized Home Energy Audit program.

CEFIA cannot stop patting itself on the back for its ingenious decision to require geothermal rebate recipients to also have a home energy audit.  It has been a huge component of its focus.  The actual result is that folks who expected to invest seriously in geothermal, very often were informed that they needed an energy audit first, and decided to invest only $75 instead, and that would solve all their problems.  Many potential customers were diverted from geothermal because of this.  They said Let's wait and see if our heating costs go down (because they had free caulk or foam between their basement and first floor!)  Instead, they should have been told that the geothermal installer would run a blower door test for them at cost, and could reduce heat loss by implementing certain weatherization, thus lowering the heat pump tonnage and loop field length, at a savings to them.

The reality is that CL&P's Joe Swift told the assembled energy auditors that the payback for geothermal converting from natural gas would be about 59 years.  Possibly fairly accurate under some circumstances of an improper and expensive geothermal installation.  And we do not recommend replacing cheap natural gas in urban areas with geothermal.  But after all the state auditors laughed off geothermal at that meeting, they left with a bad taste for geothermal.  They could not discern between retrofitting off of natural gas and retrofitting off fuel oil or electric heat.  When they were sent to people's homes as the state representative energy expert, they tended to discourage geothermal, did they not?  There was no future business for them if they recommended geothermal, like the criticism being leveled at them now because "their brother in law sells good energy efficient replacement windows, etc."  (See conversation from CL&P in February 2012.)  These are not professional engineers held to a higher code of ethics for referrals.  And if they were in cahoots with a geothermal installer and received a kickback for promoting geothermal, shame on both.  The real result is that energy audits hurt geothermal marketing.

12. Consider feedback from CT folks before hiring a Colorado consultant with no CT geothermal experience.

Spending Other People's Money for this study is in line with the MO of CEFIA.  Don't bother to ask the CT Geo Association.  Pay a distant consultant to ask instead.  I recommended the North Carolina 35% or some percentage state tax credit over 5 years to promote geothermal in Connecticut, but heard nothing, probably because it is so un-bureaucratic.  This would solve the problem of wealthy taxpayers leading the way in getting our industry going.   Since they file for the 30% federal tax credit anyway, they file the same for the state.  The state can claim it is doing something for those who might otherwise move south because of our high taxes.  And the Fairfield County geothermal owners would participate instead of going rogue.  Their less wealthy neighbors on the fence might be convinced to take the plunge. The numbers work.  The ROI is not 59 years.  This tax credit program could bring it to 5 years or so.

And the lost tax revenues would be more than made up by the income tax paid by the now working HVAC contractors, excavators and drillers.  Or at least their bosses.  These actual field workers are in such low tax brackets anyway (as my state representative pointed out), CT generates little tax revenue from the $40,000 per year workers.  But think of their earnings circulating in our economy, and perhaps a little less unemployment check funding for them.

13. Report on all ARRA money not used directly for rebate.

I thought there was $5 million originally. $4.5 for rebates and $500,000 for David's staff to administer it over 2 1/2 years.  Later I was informed that was incorrect.  I know some money has gone to the archaeologists.  Where else?  Must we file a Freedom of Information request to see these audited numbers?  Do the CEFIA board members themselves have access to these expense reports?  This goes to my oral statement about lack of CEFIA transparency.

If the original $2000 per ton had been retained instead of being reduced to $1200 in May 2010, perhaps more geothermal work would have occurred.  But we do not know if that reduction was prudent because only the PTB (powers that be) know the numbers.  Not the masses.

In addition, how was the money dissipated?  Was it meant for the small business person, but gobbled up by the few more experienced geothermal installers who received the bulk of CEFIA rebates for their clients alone?   When the public calls CEFIA and asks who is the best or most experienced contractor to use, are they told (like a building inspector does): "I cannot recommend anyone. Go to the approved contractor website and decide for yourself?"  Without divulging the names for privacy, can a report be issued showing the graphed distribution by installer/contractor number?  Perhaps CEFIA does not care if only the strong survive, but can future goals tweak policy to encourage more participation, if this is desirable?

14. State in original application, not hidden final application form that rebates are taxable income.

Note that the final application is kept hidden from the Connecticut citizen considering geothermal.  It is nowhere to be seen on the CEFIA web site. Why? Because the rebate, unlike the traditional CL&P $1500 rebate, is taxable income.  CEFIA demands your W-9 tax number only after you have gone forward.  They mail out the final form and do not allow it to be downloaded like the initial application form, which does not allude to this provision.  CEFIA may feel they are trying to encourage geothermal this way, but it is deceitful.  Honest installers like myself inform clients early on, of this mischief, as gracefully as possible, often to the detriment of getting the job. 

ARRA justifies its $5million figuring $1 to $2 million will be returned as income tax from the unsuspecting rebate recipients, so net cost is only about $3.5 million or so.  And the multiplier effect and income tax of the installers recover that too.

At least the giving up of carbon credits does appear in the fine print of the original application, and since their value has plummeted, folks don't care.  Though the very wealthy installing without waiting for CEFIA administration keep their credits.

The state tax credit idea eliminates all this complex nonsense.

15. Improve the CCEF/CEFIA web site by accepting comments & documenting each time a change is made by its webmaster.

I will lead by example, and post comments here, and document each time a change to content is made.

What is the future of CEFIA regarding geothermal in CT?  Beyond the extension of time beyond April?  The solar folks have $40 million and can plan accordingly.  How about the ground source energy people?

The 9% loan program is an insult.  Lending to borrowers at these usurious rates should be outlawed.  Was nothing learned from the housing bubble?  Financing still needs to be repaid even at zero interest.  CEFIA should focus on lowering cost, not financing.  The introduction of the plug and play circulator pump within the heat pump cabinet will help.  Removing the past CEFIA paperwork obstacles will help.  Fixing the septic code to allow proper installs and more horizontal installs in back yards will help.  Rising crude oil prices also help, no thanks to CEFIA.  Geothermal users should have the excise fee on their CL&P or UI bill waived.  Why should they subsidize CEFIA with higher electric rate payments, when they are part of the solution, not part of the problem.

I envision a new CEFIA website showing good videos of how geothermal works, and providing web resources.  It explains how to fill out the tax credit federal and state forms.  It becomes a clearing house for good, instead of obstruction.

Connecticut will then lead the way nationally, using our suitable soil and water and rock resources for sustainable living for the long term.

This ends my written statement as requested by Catherine Smith.

I express myself to improve CEFIA, not to simply criticize it.  As a Monday morning quarterback, it is easy for me to comment from afar.  But this "peer review" by a local experienced and knowledgeable participant in the unique "CCEF geothermal rebate program" is meant to challenge the policy makers to see geothermal in a better light, and administer its future use with a higher Coefficient of Performance.

PJT 03/18/12    4 pm.

Posted 03/19/12   9 am.

Revisions and comments asked to be posted:

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