Concerns raised over accessibility of low-income heat-pump program

Susan Levine of Coram would appear to be an obvious customer for a new type of home heating and cooling that LIPA says could eventually displace oil and gas systems across the state. But after two months of trying to get a new heat-pump system using a special rebate for low-income customers, the retiree is not so sure.

"I’m not any closer to buying anything," Levine said Tuesday of the program that requires she work with a list of PSEG-qualified installers and buy high-efficiency equipment that is the most expensive available. "It’s heartbreaking."

In recordings and notes of her dealings, Levine said she’s "hit a wall" after some installers either balked at providing written estimates, were unable or unwilling to use the specified equipment to qualify for the rebate, or tried selling her insulation instead. One of the mostly highly recommended installers ultimately refused to do the work after three weeks of preparing an estimate, she said, adding, "It’s a very helpless feeling."

PSEG Long Island has said low-income customers can get 80% to 100% of the cost of their system through a special fund created when state Attorney General Letitia James won a $6 million settlement from National Grid over alleged utility accounting irregularities. It promised $4.5 million would be used to cover most or all the costs for 350 families, or around $13,000 each.

But in responses to Newsday, the Long Island Power Authority, which oversees the program, said only 20 customers have received "expanded, low-income rebates" funded by the settlement since the program was announced last year, and of those projects, the rebates funded 40% to 81% of the cost. By comparison, PSEG said a total of 4,677 heat pumps were installed last year.

Additional costs such as duct work, electrical upgrades and "decommissioning" of old heating systems can jack up the total cost, LIPA said. By comparison, PSEG said a total of 4,677 heat pumps were installed with a utility rebate last year.

Heat pump systems, which both heat and cool homes, generally do not come cheap. Equipment for average homes can cost $7,000 to $20,000 or more, depending on home size, number of zones, the brand and efficiency of the unit. Rebates vary depending on the efficiency of equipment and whether customers are leaving old fossil-fuel systems in place. One 4.5-ton system estimate provided to Newsday, including duct work and other labor, cost just over $29,000, before $4,500 in rebates.

LIPA noted that since the low-income program is new, "we are in the process of evaluating the data that has come in on customer participation and rebate totals to ensure the program is working as expected. If our review finds that project costs are unreasonably high, we will investigate."

Nevertheless, LIPA said that after hearing of Levine's experiences, it "may revisit rebate sizing within the next year."

A spokeswoman for the state attorney general said, "We take these concerns very seriously and have reached out to LIPA as a result. We are committed to the success of this program."

Levine said her issues with the program went beyond an inability to have most of the costs subsidized by the rebates. She said she found many of the eligible heating and AC contractors either don’t do the required work or declined to provide her with a complete written estimate. She said many of the installers provided by PSEG’s low-income vetting company, Slipsstream, told her they only do insulation work. The best she got was an estimate that required she pay $6,700 — about 40% of the cost for a $16,350 system — and the compliant heat pump wouldn’t arrive for two to three months, she said.

"I’ve called all 30 of them," she said of the contractors on the list. "I had two quotes," including one from an installer who "yelled at me on the phone. I have him on tape telling me it’s $10,000."

In one recording, a PSEG representative apologized to Levine because Slipstream's list of eligible installers didn't match those listed on PSEG's website for Home Comfort Plus. He told her Slipstream was "updating their system" and she could "work with any one of those partners" listed by PSEG.

A Slipstream representative said the company is contracted with New York State to do income screening for utility customers. She declined to comment further.

Newsday called half the companies on PSEG's approved installer list. One who said he's had "good experience with the program" said, "I don't want my company's name published." Another said, "I don't really focus on the HVAC [heating, ventilation and air conditioning] business. I do more weatherization and prefer not to comment." A third said, "We don't have any experience with the Home Comfort Plus package," and added, "We really don't want to be in this article."

One who did respond to questions was Mark Hoffman, general manager of Home Efficiency Experts of Ronkonkoma. He said supply constraints have made heat-pump systems more scarce, though "we happen to be well stocked." System pricing and rebates, he said, vary by home and system size.

"If people want something more efficient and better, it's always going to cost more," he said. "But it's also going to save them." Rebates, as promised, he said, "are being paid."

One problem may be that the program requires that customers buy among the most-efficient heat pumps on the market. Those units are measured in SEERS. Ashley Chauvin, a spokeswoman for PSEG, said systems must meet a minimum requirement to qualify for the full rebate.

"Customers interested in installing ducted air source heat pumps may select any brand, make or model but in order to qualify for the rebate, the efficiency combination of the system must meet or exceed program efficiency requirements," she said.

"It is not uncommon for higher efficiency units to come at a higher initial cost but a higher efficiency system is also expected to lead to increased savings over time."

The minimum SEER rating, she said, is 17.

Levine said she’s been told the eligible system for the rebate is 20 SEER. "Why am I forced to go up to 20 SEER when I am low-income?" Levine said, noting she got by "just fine" with a 10-SEER system for 17 years.

Levin said one dealer offered her 13 SEER and 15 SEER units, with a written quotes to finance the system over 15 years at 6.99% interest for $75 a month. Another quote she received included a 16-SEER system that cost $9,986 with $812 in rebates. The financed system would cost her $133.10 a month for five years (or a discount of $1,200 for a system paid for up front."

Levine said none of the 30 installers she called was able to provide a quote using the rebate to provide an 80% to 100% subsidy.

For Levine, who had an old heat pump system that broke and can’t be fixed, most of the prep work for her house is already done. What she needs is for the old system to be removed, the new one installed and the heat turned back on. As it is, she’s paying $22 for "emergency heat" from her old system using electric heat registers, the most expensive heat there is.

"I just want a quote for a condenser and the air handler," the two primary pieces of equipment for a heat-pump system, which works as central air in the summer, she said.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.