N.B. Power backtracks on handing heat pump contract to one company

N.B. Power has backtracked on a decision to give all the work from a $30-million energy efficiency program to one company, but competitors still aren't happy with the process.

Daniel Goguen, the owner of Moncton-based Tradewinds Eco-Energy Solutions, said he and roughly 100 other heat pump installers will end up getting "crumbs" from the program, rather than an equitable "share of the pie."

The issue centres around a program announced by the provincial government in September. The news release said it was a "new" program that would "offer a free mini-split heat pump and upgraded insulation along with free installation of both to homeowners who use electric baseboard heating and have a combined gross household income under $70,000."

But it turns out it's actually just a tweaked 2019 program that was originally awarded to one New Brunswick company.

In a series of emailed responses, N.B. Power spokesperson Marc Belliveau said the 2019 program was properly awarded to Greenfoot Energy Solutions after a request for proposals was issued. Greenfoot applied in all four sectors of the province and, based on the bids that were received, was awarded the contract in all four.

The initial program only included anefficiency audit and the installation of insulation and it was limited to low-income households, the threshold for which was established by the Department of Social Development.

Without issuing a new request for proposals, the government announced the "new" Enhanced Energy Savings Program in September, increasingthe threshold for household incomes up to $70,000 and addingfree heat pumps and installation.

So, Greenfootautomatically became the one-stop shop for assessments, equipment and installation under the revised program.

Goguen believes the government should have treated the program as if it were new and started another bidding process or simply made all qualified installers eligible for the work rather than handGreenfoot an extra $30 million of work.

Greenfoot owner and CEO Joe Godbout said the company won the contract fair and square in 2019. Then, when it expanded by $30 million and added free heat pumps, Godbout said the company contacted several other businesses in an effort to spread the work around.

He said Greenfoot reached agreements with about 10 subcontractors even though his company had the capacity to deliver the entire expanded program, he said.

Built into the contract

Belliveau said the 2019 contract "allows the provision to add products," a point Goguen concedes.

It might be legal, said Goguen, but "it's not right. That's for sure."

He said September's announcement gave Greenfoot an unfair advantage.

He said it also "created a market disruption," when those who qualified for the program cancelled work they had underway in order to take advantage of the free equipment and installation.

Goguen said he and others took "major hits" to their business when customers cancelled orders and opted to sign up for the free program.

Industry backlash

Owners were so upset, they banded together to discuss the issue with N.B. Power last month. The provincial Crown corporation met with the group and eventually opened up the program to all qualified installers.

In an email sent late on Wednesday, Belliveausaid "N.B. Power issued a Request for Qualifications to allow interested contractors who meet the eligibility requirements to be added to the contractor network for the Enhanced Energy Savings Program immediately. This was issued on November 10, 2022."

He said when the funding became available, N.B. Power wanted "to get to market as quickly as possible" and that the contract with Greenfoot "allowed for that flexibility."

Belliveau said "the intention was always to go to RFP for the fiscal year starting April 1, 2023, which we are still committed to doing."

Despite the change, Goguen says the rest of the industry isonly going to get Greenfoot's "crumbs."

As the program's sole provider of a home's initial energy audit, Greenfoot has a "first in the door" advantage with consumers, said Goguen.

Other companies can do the work, he said, but it's pretty easy for homeowners to continue with the company that is literally standing right in front of them in their home, telling them what work they need done.

Green Party Leader David Coon said that part of the program should have been changed, too.

"The hangover of the energy assessment being still monopolized by a single company seems to be unnecessary and really is just a hangover of the old program and should have been removed. So that's the last little irritant."

Coon hopes that will be fixed when the current contract expires at the end of March.

Belliveau confirmed that Greenfoot is the only company that can do pre- and post-assessments, but that will end on March 31, 2023.

"This will be broadened in the upcoming Request for Proposals that will take place April 1, 2023," wrote Belliveau.

'Massive disturbance' in industry

Louis-Philippe Gauthier, vice-president, Atlantic for the Canadian Federation of Independent Business, said September's announcement created "a massive disturbance in that industry" when people dropped out of already-started projects to take advantage of the free program.

While those companies can now do the work under the program, Gauthier said it will take a lot of effort to reach out to their former customers and try to get the jobs back.

"So right now, the thing that's important for consumers that are approved for this program to understand is they have a choice," said Gauthier, who was also involved in the talks with N.B. Power.

"They can select the provider that they want when it comes to the heat pump that gets installed, so they can select their local provider."

The program will continue to grow, saidNatural Resources and Energy Development Minister Mike Holland on Wednesday. Holland said the program is "going to be worth more than $30 million, absolutely."