Responsible Energy Decisions Using Cost-effective Efficiencies
Program Summary
REDUCE is Golden Valley Electric Association’s (GVEA) On-Bill Financing (OBF) pilot program. Eligible members can choose from a variety of energy efficiency projects, up to $10,000 per membership, to improve their home and finance the project through a low-interest GVEA funding award. This program makes it possible for members to improve their home, while at the same time saving energy and energy costs.
Program Goals & Objectives
REDUCE’S goal is to increase access for GVEA members to energy efficiency, beneficial electrification or renewable energy projects.
The REDUCE pilot program will have limited participation and will provide data for GVEA to perform an analysis for a full OBF program. REDUCE seeks to meet the following objectives:
- Save the members money. Even if a project increases electrical use, it must reduce another energy expense for a net financial savings to the member.
- Make renewable energy, energy efficiency, and beneficial electrification projects accessible to members regardless of their income level or credit rating.
- Reduce overall energy consumption.
Eligibility Requirements
To be eligible for participation in the REDUCE Program, the Applicant must:
- Be and remain a current GVEA Residential Member;
- Have received electric service for a minimum of 12 consecutive months;
- Have average electric usage equal to or greater than 600 kilowatt-hours per month;
- Have not been disconnected for non-payment within the prior 12 months; and,
- Own the service location where the improvements are to be installed.
Please note: (1) these eligibility requirements are only for the pilot program. Participation and eligibility would be expanded if a full OBF program is adopted by GVEA. (2) Only one active loan per membership is permitted.
Financing
Eligible members under the REDUCE program may apply for a minimum of $500 to maximum of $10,000.
REDUCE has an initial budget of $200,000 to kick-start the program. This money comes from non-operating funds and has no impact on member rates.
Applications will be reviewed and approved in the order they are received until the pilot program funding has been exhausted. Once the pilot program funding has been exhausted, GVEA will no longer accept additional applications.
Upon receiving an Approval Letter, a Financing Agreement will be developed which will offer equal re-payments over a five or ten year term (to be selected based on the equipment cost). Additional terms, including a 3% amortized interest rate to recover administrative expenses for this program will be included in the Agreement.
As part of the program, GVEA must offer Maintenance Agreement. A Maintenance Agreement can be added for an additional cost to maintain the original functionally of certain equipment. It is important to note, in the event that a member sells their service location with an ongoing REDUCE loan and no Maintenance Agreement, the member must pay the full balance at that time, unless a separate waiver is obtained by the home buyer. For details on what is covered under the Maintenance Agreement, any exclusions that apply, and the monthly cost, review the agreement HERE.
Upon completion of the equipment installation, the member will be mailed a separate bill in addition to their normal electric bill for the installment payments. Payments will be due within 30 days of the bill date.
Eligible Technologies
Eligible technologies must be able to show energy cost savings within a maximum 10-year period. The following categories of items are generally eligible, however, it may vary for each member if the selected equipment will not result in savings for your specific service location.
Energy Efficient Appliances
Weatherization
Lighting Improvements
Solar Array
How REDUCE Works
1. Get a Bid/Quote
As a first step in this process, contact a local contractor to obtain a bid or a quote for the eligible equipment you are seeking to have financed under this Program, plus any installation fees and labor up to a maximum of $10,000. Members are responsible for selecting and coordinating with contractors.
2. Apply
Once you have obtained a contractor bid or quote, submit a REDUCE application, and a copy of your bid to GVEA. GVEA will respond to REDUCE applications within 5 business days. Completed applications will be reviewed in the order in which they are received. Given that limited funding exists for the pilot program, members will only have 5 business days to correct any incomplete applications before the application is returned and the member must re-apply.
CLICK HERE TO COMPLETE AN APPLICATION
3. Site Assessment
If GVEA is unable to determine from the application if it is likely that energy savings will be obtained, GVEA may require a site visit to your service location. GVEA will contact you to schedule the visit, if required.
4. Approval & Agreements
Once GVEA has confirmed the equipment is eligible for financing under the program, an approval letter will be sent to the member along with a Financing Agreement. Your next step is to review and sign the Financing Agreement. Once signed, the Agreement must be returned to GVEA. Assuming the Agreement is complete, GVEA will then issue a Notice to Proceed and members can then contact their contractor to proceed with ordering the equipment and completing the installation. GVEA will directly pay the member’s contractor within 30 days of loan approval.
At this stage, members will be offered the opportunity to enter into a Maintenance Agreement. See the FAQs below for more details, or click HERE to view a copy of the Agreement.
5. Bill & Save!
After notification that the project is complete, GVEA will begin billing the member monthly as outlined in your Financing Agreement. The bill will be separate from your normal GVEA electric bill. Members will submit their monthly payments back to GVEA until the loan is paid in full -that’s it, now it’s time to save on your energy costs!
Frequently Asked Questions
The REDUCE (Responsible Energy Decisions Using Cost-Effective Efficiencies) Program is a pilot on-bill financing program that allows eligible GVEA members to apply for a low-interest loan between $500 and $10,000 to finance approved energy efficiency measures at their homes. Loans through GVEA are for either 5 or 10 year term based on the amount requested and have a 3% interest rate.
REDUCE is a pilot program that has an initial budget of $200,000. This money comes from non-operating funds and has no impact on member rates.
At this time, the REDUCE program is only open to Residential members. Additionally, members must be the following conditions:
- Current Residential member of GVEA with at least 12 consecutive months of electric service.
- Average electric usage must be equal to or greater than 600 kWh per month
- Applicant must own the service location where the improvements are to be installed.
- Applicant has not been disconnected for non-payment within the prior 12 months.
Eligible energy efficiency improvements must result in an overall energy reduction. General categories available include energy-efficient appliances, weatherization, lighting improvements and solar systems. However, if the equipment being replaced will not result in energy savings, GVEA may not approve the equipment requested.
Under the pilot program, members will receive a separate invoice for their REDUCE loan. GVEA may ultimately seek Regulatory Commission of Alaska approval to include REDUCE costs directly on the bill but will notify REDUCE members in advance before this change takes effect.
No, during the pilot program only one loan will be offered per membership.
It can take up to 5 business days to get loan approval once all required documents have been received.
You must notify the buyers of the home of the existing loan. Additionally, unless you have a Maintenance Agreement in place or get a waiver from the buyer that transfers the loan into their name, you must pay off the loan in full within 30 days of signing out of electric service at the service location your loan is for.
No, there are no penalties for paying off your loan early.
Yes, loans are capped at $10,000 per membership.
As an owner of the property, you have an interest in that property. GVEA requires all persons who have an interest in the property to sign the REDUCE application and Financing Agreement for the following reasons:
- to ensure that all property owners are informed; and
- to ensure that the obligation will be paid if anything happens to the primary applicant
No, at this time REDUCE is only open to applicants who own their home. If REDUCE is expanded beyond a pilot program, GVEA will look to incorporate options for renters that comply with state on-bill financing laws.
The interest ensures that costs are born by the participants of this program, not the general membership. Costs covered by the 3% interest include administrative costs such as staff time, recording fees, marketing costs, loss reserves, etc.
No, Alaska state law prohibits on-bill financing for initial home construction.
Members can apply for as many projects as they would like, within a single loan application, up to the $10,000 cap per membership.
Yes, any solar systems installed using a REDUCE loan must meet all requirements of GVEA’s SNAP net metering program. A separate application and agreement will also be required for the SNAP program. See GVEA’s SNAP webpage HERE for additional details on this program.
A Maintenance Agreement provides a system under which the Member pays a flat monthly amount and in exchange, GVEA will reimburse qualifying maintenance expenses necessary to maintain the functionality of the equipment. The monthly fee varies depending on the amount of the Member loan. Additionally, certain exclusions apply. Review the full Maintenance Agreement HERE if you want to learn more.