The Cost of Energy Ratings for the AHFC Home Energy Rebate Program Skyrockets

I feel a little bit like Michael Moore.

Do you remember when families could have their babies down at the clinic? I do. It was nice. No trips to Juneau, Whitehorse, or Anchorage for the birth; no need for house sitters; pet sitters. Waddle down to the clinic with friends and family and then go proudly home 4-6-8 hours later, babe in arms. Sweet. That sweet situation came to a screeching halt sometime after 1982 for a variety of reasons – one of which was the bone shattering cost of malpractice insurance.

Fast forward to 2008 and again, the insurance industry may be the unfriendly element in an otherwise incredibly consumer friendly program. The Alaska Housing Finance Corporation (AHFC) Home Energy Rebate Program, which I gushed about May 14 (Reach for the Stars – Energy Stars) has just become too expensive for me – thanks, apparently, to insurance requirements.

When the program was launched in April, AHFC posted regulations that said:

The cost of ratings done after May 15, 2008 will be reimbursed by AHFC directly to the rater, up to $500 for the As-is and Post Improvement ratings combined. The energy rater will be paid 65% of the reimbursable cost of the rating ($325) for the pre-, or As-is rating, and 35% ($175) for the Post Improvement rating.

A week or so ago, regulations were changed to this:

The cost of ratings done after May 15, 2008 will be reimbursed by AHFC to the homeowner, up to $500 for the As-is and Post Improvement ratings combined. The homeowner will be reimbursed by AHFC 65% ($325) for the pre-, or As-is rating, and 35% ($175) for the Post Improvement rating.

Do you see the difference? Under regulation “A”, the rater gets his fee from AHFC; under regulation “B”, he gets it from me – the homeowner. Under B, the rater can charge any amount he wants.

This all came to light when the energy rater 10 of us convinced to come to Haines told us his fees: $550 for the first rating, and $200 the second post-improvement rating. Wow. Huge, up front fees when we expected what? - no fees.

What’s an extra $225, you say, when it allows you to get reimbursed for supplies up to maybe $10,000? Think of it as an "entry fee." Exactly. The problem is that a $225 "entry fee" may be chicken feed for Wally Hickle – who also qualifies for this program – but it is a big chunk of change for me. It is in fact 17% of my monthly income. Now you know. I don’t think I am the only one in this income bracket in Haines.

Why the switch? According to Rosie Ricketts, AHFC Home Energy Rebate program manager, the culprit is insurance requirements. Someone, presumably in the State AG’s office, advised AHFC that if AHFC paid the raters directly, each rater would have to procure professional liability insurance to protect the state from any errors the rater might make.

Ted Veal, an energy rater from Homer, Alaska wrote in a 2 June email:

The raters met with AHFC about this program and were notified that if AHFC was to pay us directly we would have to have insurance to cover AHFC. Some raters reported from their investigation that the insurance available to meet AHFC’s requirements was in our opinion exorbitant. One reported that he was quoted $20,000.00 per year!

Thus the switch to regulation “B.”

I started checking energy rating fees around the state. The fee for the initial AS IS rating varies by as much as $200! So far, Carol Perkins from Active Inspections & Energy Ratings in Chugiak is the rater I would choose if I could. Her fees coincide exactly with the amount AHFC is willing to reimburse the homeowner.

Anchorage, Fairbanks, Homer, Seward, Chugiak, Palmer, Soldotna are flush with raters. You know what that means: competition tends to keep prices on the low side. Presently, we have three active raters in Juneau - Charlie Ford, Marquam George, and Craig Moore - none in Haines. I have emailed 23 raters around the state asking about rates. So far, Mr. Moore’s are the highest of those reporting back.

Two Haines men have qualified to be trained as energy raters. One starts his training this week. He will be back amongst us the week of June 11. I don’t know what his rates will be but I would love it if he followed Carol Perkin’s lead and charged the reimbursable amount. I hope it works out for him to do this.

So, until then, what is a girl to do? You better believe I have been asking. For one thing, I learned that the present regulations are temporary. AHFC will hold a public hearing on them June 25. According to Ms. Ricketts, time and place should be advertised on the website and in the newspaper. I have written to AHFC and Representative Thomas and to the Mayor and to the Haines Borough Assembly asking them to consider requesting AHFC to reimburse the fee for an energy rating on a sliding scale based on income guidelines up to 100% of the cost – whatever that cost may be. You could do that too. Here are email addresses if you are interested:

• Rosie Ricketts, Home Energy Rebate Program Manager, AHFC, rricketts@ahfc.state.ak.us
• Representative Bill Thomas, through Jesse Badger, Jessie_Badger@legis.state.ak.us
• Email address for the Haines Borough Mayor and members of the Assembly can be easily accessed through the Haines Borough website.

You also might be interested, as I am, in the AHFC Low-Income Weatherization program. If you are accepted into this program, all services will be paid - from inspection through implementation of improvements. Haines is served by the Alaska Community Development Corporation. Download an application and submit it right away. The ACDC person I spoke to said that ACDC is coming to Haines this summer. The glitch is that the work might not be able to be performed before this winter.

Low income weatherization work is performed by a contractor contracted by the State. That process takes time. In contrast, the Home Energy Rebate Program improvements can be done by you, or anyone you choose, right now– if you can afford the initial energy rating.

I’ve lived long enough now to feel like “low income” isn’t low any more. Or at least it isn’t low compared to 26 years ago when my husband and I built our house.

According to ACDC, I would qualify for the program – living alone as I do – with an income of $47,700 or less. I qualify. Be warned, the income guidelines posted on the Alaska CDC home page are not the income guidelines now being used for the program. They are using FY 2008 HUD Income Limits for Alaska, effective April 15, 2008. Get these at the Weatherization Program. Click where it says “Click here for Weatherization Program Income Guidelines.”

Maybe the insurance industry isn't to blame for the change in the regulations. Blaming anyone or any group for anything is probably not a very useful thing to do. What is useful is working constructively to change a situation that seems inequitable. The date for that work is June 25 - the date of the public hearing for the AHFC Home Energy Rebate regulations. I hope to discuss solutions to what I perceive to be a problem with the Energy Rebate Program's entry fee - the fee for the required Energy Rating. Join me. We can turn this around. I believe everyone wants this program to work.