Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Midstream Contractors topic
No spam. Unsubscribe anytime.
Contractors say payment delays are squeezing small businesses as HVAC midstream programs expand
Summary
Contractors and commissioners told the PSC that distributor and contractor payment timelines in HVAC midstream programs have created financial strain for small businesses; utilities said they have shortened distributor payments and added contractor bonuses but asked for specifics to investigate lingering issues.
Contractors and commissioners urged the Public Service Commission to press utilities for faster and more reliable payments from midstream HVAC and distributor chains as program participation grows.
Multiple commissioners flagged complaints heard in the midstream work group that some small contractors face delayed payments after installing equipment. “Small contractors are telling us they are worried about bankruptcy because they must front the cost of electrification upgrades,” Commissioner Litton said.
Utilities defended steps taken to improve timeliness. Eric Webko, who manages BGE’s residential programs, said distributors are being paid in “less than 30 days on average” and that BGE has introduced a per‑job contractor bonus for the new fuel‑switch incentives to help offset contractor cash flow burdens. Pepco said it has revised payment processes and added ACH payments to speed turnarounds; SMECO said it uses drawdown processing and noted efforts to streamline distributor payments.
Utilities warned the Commission that overly aggressive acceleration of payments could create fraud risks without adequate verification. A BGE official described cases where identical verification photos or applications were submitted for multiple rebates and where customers later reported installations never occurred. “There’s a tension between quick payment and QA/QC against improper claims,” a BGE manager said.
Office of People’s Counsel and contractor stakeholders urged the Commission to require utilities to report contractor payment timelines and consider short‑term fixes such as distributor instant discounts at point of sale. OPC recommended rebate processing to distributors within 15 business days where possible while allowing utilities an exception to halt expedited payments when credible fraud indicators arise.
PSC staff accepted the need for more work and recommended that the midstream working group continue examining payment mechanisms and implementation fixes. Several commissioners said they favor a short‑term reporting requirement and a work group motion to explore long‑term options, including third‑party administrators, to reduce program friction for small contractors.
