It was a busy third quarter for the Business & Financial Services team, especially around the ENERGY STAR initiative and keeping members up to date on the Inflation Reduction Act. Representatives from the EPA and DOE were with us in Las Vegas for PrimeTime, and the program continues to move forward in more states. We sat down to get the latest lay of the land with NMG’s resident IRA and ENERGY STAR expert Frank Sandtner.
Rob Stott: We are back on the Independent Thinking Podcast and always a favorite when I can have Mr. Frank Sandtner, our senior Director of Business and financial services here at Nationwide Marketing Group. Come on to talk shop, to talk Energy Star, to talk the Inflation Reduction Act. It’s great to have you on, man. How are you?
Frank Sandtner: It’s always great to be on. I ditto everything that you just said and let’s get to it.
Rob Stott: Yeah, dive right in. Cut the pleasantries. We don’t need all that. We got to talk shop. Let’s get right into it.
Frank Sandtner: Get to the meat of it.
Rob Stott: Well, before we do that, we’ve got a lot to talk about because there’s past updates about events we’ve been attending and our own Primetime included and some awesome things that have happened there to what’s coming down the pike in the near future and what we have going on. And then even maybe we will be crazy and look ahead to next Primetime already. Is that a possibility? Maybe we’ll do that. We will see. But I want to start with today. How are things today in your world and the things that you track and follow here for Nationwide and our members?
Frank Sandtner: Well, looking at the, we’re going to talk about the Inflation Reduction Act as the main topic, and this is one where the amount of activity has increased significantly over the last several months. We went through a lull period. The Department of Energy was trying to get states to apply for the Inflation Reduction Act. Most states did not have the resources to do that, and so it took a lot of work. In fact, in many cases, the Department of Energy provided a good deal of the content to reply to their own requests for proposals, which is kind of interesting, but it is what it is. And they took states kind of in waves of about five states. They would help five states complete their applications and then get them ready to roll and then have them submit.
So it was a gallant effort and now we’ve crossed the 50% mark where there’s more than 50% of the states that have applied. And there’s a bunch of them that have now received the funding and then some of them that received the funding and are preparing to launch. And most of the ones that have launched at this point have launched only parts of the program. There’s a much greater awareness at the state level of what can we launch first? How can we fit this program into some programs we already have or is that not what we should do? Should we just start something totally to the side? What kinds of software do we have to build to work with the federal rebate system that the Department of Energy built? So the discussions that I’ve had recently with states reflect the fact that the DOE has done a great job of raising the education level, raising the awareness of the program and what it will require to get the program to be launched.
Rob Stott: Right. My mind’s going a couple of ways. One is, A, great update because I think the last time we talked was before Primetime in August and I think there was only one state that was active in having their program out there, if I remember right. New York, is that right?
Frank Sandtner: Yeah, that was New York. New York is pretty much at the same point as they were before. We’ve got Wisconsin that’s launched. And you have, I think Rhode Island now that launched. California is way further down the path. They haven’t launched really yet, but they submitted their application. They’re getting close. Florida has applied, which they hadn’t before. Georgia had applied. North Carolina has applied. So if you look at the map, it’s-
Rob Stott: It’s like the domino effect. Right? So they’re coming through. Now, as they are launching, are you noticing, I know you mentioned each state’s going to take their own approach to this, but do you notice any … I almost think how our members are right in best practice sharing and talking to one another. Are they talking to one another and is it massive group think in terms of how they’re launching these programs? Or obviously every state’s different and they have their own processes and procedures, so I imagine there’s some best practice sharing, but at the end of the day, they’re doing kind of what works best for them.
Frank Sandtner: When we first, I’ve been involved in it since before the actual act was signed, which was in October of 2022. And before that, we went through a process with a bunch of the utility contractors to make an appeal that the programs run uniformly so that we don’t end up with 50 different programs. And then they went through an evolution of a bunch of different stages. And what we’re seeing now is that the states are collaborating with each other a lot. So there’s a venue called NASEO, National Association of State Energy Officials, that brings all of these people together. And they do like to hang out together at the Energy Star meetings last week. They go to their own dinners. And so there’s a fair amount of familiarity, but what we’re seeing is that the programs are all coming out different.
Every state has nuances to it, even though at a high level they’re all the same. But once you get further into it starts to flake apart a little bit. So one of the states that also has launched is New Mexico. New Mexico was the first state to actually submit an application And it took them a long time to launch, but they have successfully done that. But they’ve launched only a small portion of their program. It’s actually insulation. So do-it-yourself insulation, which our members are not involved in that anyway. But in October, they’re going to launch their appliance portion of their program. And when I spoke to the lady that’s responsible for the Inflation Reduction Act last week at the energy Star meeting, she said that in terms of, because one of the things you could do is you could target either low-income, low and moderate-income. So most are going to do either one or the other. She said, “Well, we’re targeting only.” She said, “You may not realize this, but there’s only one county in all of New Mexico that’s not low-income.”
Rob Stott: Oh wow.
Frank Sandtner: Like what?
Rob Stott: Whoa.
Frank Sandtner: So I think it’s Los Alamos County and there’s a federal government, a bunch of nuclear scientists that live there.
Rob Stott: Gotcha. That’s what we’re considering the threshold for low-income.
Frank Sandtner: Everybody else is way lower. In one county, it’s crazy.
Rob Stott: Wow, that’s incredible.
Frank Sandtner: And then all the other counties are below that. So they have that very unique situation. So they’re going to focus not on moderate-income, only low-income. And that’s the only state that I know that’s only doing that. And as I said, they launched with one program, which is do-it-yourself weatherization, insulation. Nobody else has done that. So their path is just not the same as everybody else’s. And I don’t know any two that are alike at this point.
Rob Stott: Now have you talked to any members that are in states with active programs and heard any feedback on how things are going or if they’ve realized any benefit from these programs being launched?
Frank Sandtner: In the state of New York, we actually have a pretty good relation with NYSERDA, which is the organization in the state of New York that kind of manages inflation reduction. They have launched, but they have not launched the appliance portion. The kind of struggling with that a little bit. So they launched an HVAC, and it may include a water heating portion, that ties into this other state program that New York has had for a long time. They have not had this type of appliance program and that they are targeting to launch, first it was October, now it’s kind of November. So even though there’s a lot of activity, the notion of a state fully launching, we don’t have a single state that at this point has launched all the programs.
There’s a bunch of states that are not ever planning to launch all the programs. They’re only planning to launch one of the two programs. So just to review, the HEAR program is the one that is appliance-related. And the appliance related deals with cooking and drying. And drying, it’s only heat pump dryers. And cooking, it depends on the state. It could be electric cooking or electric and induction, or it could be just induction depending on where you’re going. In New York state, it’s only going to be induction cooking. And so, that kind of limits it right there.
Rob Stott: Yeah. Again, just another reason why everything you’re doing and kind of tracking all the differences and variations from state to state, obviously the retailers in those states are going to be listening to their leaders and elected officials on kind of the direction they’re heading and energy department. But to have that one source of truth for us is certainly a big benefit That doesn’t get talked about nearly enough, but also it goes to show just how much preparation, even though none of the appliance related programs have launched yet, they are still coming. So lots of education that still needs to happen. And kind of a nice segue then to talk about what you have been doing to keep retailers abreast of all that stuff and what’s coming and have the conversations that need to be had and doing.
So most recently, well maybe not most recently, you were at that Energy Star meeting, but for our members at Primetime, so talk about you had a full slate of programming going on at Primetime, so catch those of us up that weren’t, I’m not included in that list. I was there, but for those that weren’t there, what you had going on at Primetime and all that good stuff.
Frank Sandtner: Sure. We were very fortunate. We were very blessed to be able to bring together some aspects of the program that were usually pretty hard to pull together. We were able to bring in a gentleman from the US Department of Energy, so we had him at the show. His name is Adam Morse and he is definitely an expert on the federal government side. So he knows where most states are. He kind of understands how they would implement the programs to a certain extent vis-a the federal rebate system. So we had a lady, Maddie Kohler, from NASEO. She is the one that knows many of the state energy officials because that’s their association. She is specifically focused on rebate programs within the states. And the biggest one out there is inflation reduction. So each of them had one-on-one sessions with retailers. So retailers that want to specifically talk about their state or their program, they were able to meet.
Rob Stott: That’s awesome.
Frank Sandtner: We had a dozen slots for each of those. one-on-one, then Adam Morse did a separate NLA talking about the process. Because thinking about how the process will work for independent retail, there’s a few different paths that you can take. One is more secure and automated, but requires a lot more development work. One is less secure, less automated, doesn’t take a lot of setup time, but you got to make sure you have enough controls so you don’t end up losing money. So he kind of outlined those and I think that was helpful to many members. These were recorded sessions also. So they’re now available. I don’t know exactly where, but they are available. You may want to come to me and force me to find out where they are.
And then we had the third, which was really the pinnacle of the whole thing. We said, “Look, we know that everybody likes to hear from members, so how about if they hear from members, vendors,” so appliance manufacturers, “the US Department of Energy and NASEO in a panel discussion?” So this was designed as the people that are going to benefit from the Inflation Reduction Act other than the consumers is going to be retailers and manufacturers. So let’s set them up to have the ability to ask questions of both the NASEO and US Department of Energy so they could get their questions answered and then everybody in the audience can hear the questions and it would prime something in their mind about what are the things that they really need to know. And so, that was a great session. In fact, people that I’ve told about it, people at EPA or DOE were like, “Yeah, that’s wonderful to be able to bring all those parties together.” In fact, that was something that they wanted to do at the Energy Star Products Partner Meeting last week, but they were not able to bring those bodies together.
Rob Stott: They should have asked Mr. Frank Sandtner to get involved. Maybe he could have had it happening. No, that’s awesome.
Frank Sandtner: And this then led to what we know at this point is the most important thing that we can do is bring retailers together with the states. You have to form a relationship with your state. And the thing I’ll tell you is that every single state absolutely wants to use independent retail. When the Department of Energy created the program, they built it for big box stores. The software they created was only thinking about big box stores. Well, about a year and a half ago, I was in a meeting with Karen Zelmar, who is responsible for the Inflation Reduction Act program. And I said, “Wait a second here. How about independent retail? What are you doing?” “Oh, we’re going to create other workflows.” “Okay, where are those other workflows?” “Well, we haven’t started working on them yet.” “Well, independent retail is here today. We’re not an afterthought.” So through that, that got a bunch of states sort of worked up and yeah, we do want to include independent retail.
And so, the thing of beauty was last week when I was in Minneapolis for the Energy Star meeting and I got to meet with none other than Yeny Maestas. Now maybe not pronouncing it correctly, a wonderful young lady that is running the Inflation Reduction Act in the state of New Mexico. And through another lady, Maureen McNamara at the EPA, she is this lady at the EPA. Maureen, is the interface between the EPA, which manages Energy Star, and all the states is Maureen. So Maureen said, you need to meet Yeny here at this event. And so the last day she brought Yeny to me to introduce me to her and Yeny said, “Well, it’s the last day, so are you going to be able to meet?” And I said, “Yes.” And then she said, “Can you meet right now?” And I said, “Yes.”
So I sat down with this young lady for an hour and she reviewed with me their strategy and what they’re doing to make this program work for independent retail. And then of course I got back this week and the very first thing I did is I introduced her to Mike Baca from Builders Source because we need to start with the biggest retailer. So Mike Baca lives in Santa Fe and so does she because that’s where the state office is. And Mike Baca’s mom retired from the same department as
Rob Stott: You. Oh wow. What a small world.
Frank Sandtner: Yeah. He said, “I probably know Yeny. If I see her, I probably will recognize her.”
Rob Stott: That’s awesome.
Frank Sandtner: Is that level of connectivity and sort of engagement and connectivity that, I mean it’s a huge personal passion of mine to bring people together regardless.
Rob Stott: Absolutely.
Frank Sandtner: But to be able to bring them together in something that benefits both of them, benefits the community, benefits the retailer, benefits the state. That is my commitment to everybody listening to this podcast is you put me on a state and say you want to get connected with somebody at the state level, I will get you connected, guaranteed. I now know enough people between EPA, DOE, NASEO, will find the person that you need to get in touch with.
Rob Stott: The visual I have in my head is those old call centers, the phones with the ladies taking the cables out, putting them in different holes. That’s Mr. Sandtner, that’s you right now making all those connections happen so that you’re talking to who you need to talk to. Right?
Frank Sandtner: And you don’t need to wait until your state has even applied. They have now hired people. All these people that I met over the last week in the state energy offices, they’ve all been in their positions less than a year. So these are new people. They’re very, very hungry. They have just a tremendous amount of energy, and so let’s harness that energy. They’re thinking about independent retail already anyway. Let’s get you in touch with them because you may be able to influence how the program gets set up.
Rob Stott: Right.
Frank Sandtner: I’ve seen this happen already where they want input and they are using that. Because these are not people that have been in their jobs for 20 years. These are fresh, young blood ready to listen and ready to make things work.
Rob Stott: And even beyond, you’ll have the ability to influence those programs, but getting in on that ground level, it sets you up for success when it eventually does launch because you don’t want to be behind the eight ball after the fact when these programs are already up and running. People know how they work and then you’re having to catch up and get educated. So the sooner the better.
Frank Sandtner: The sooner the better. This is an area where even though the initial software was, as I said, it was designed for big box stores, don’t even worry about that. The fact of the matter is that the level of understanding of how the program works and being able to get to low to moderate income households and be the advocate for them to help them because there’s a qualification process. There’s coupon codes, there’s quite a few steps. Simplifying that for somebody in your community because all of you are out in your communities is a huge thing, is one that the big box stores are not able to do.
In fact, big box stores because they target the middle of the market, they’re not set up to provide the kind of support that these programs will require. And the retailers that could provide the support are going to be successful, are going to make a good amount of money out of this. This is a significant revenue opportunity to everybody out there, and now is the time to get engaged. In the case of New York state, and this will be the case in all states, you have to be a registered retailer to participate. So if you’re not on the list of qualified retailers, you can’t even participate. If somebody comes into your store they heard about these rebates, you’re going to have to say, I can’t do it. Not part of the program.
Rob Stott: Set up for it. Yeah.
Frank Sandtner: So now the signups have started in New York State, and so if there’s anybody in New York state that wants to know how to get signed up, I’ve got the link to do that. Every state’s going to have nuances like this, but it’s up to the retailers to say, “Okay, I want to find this out or that out and then put me on the case to bird dog the thing through.”
Rob Stott: No, that’s awesome. And again, just I can’t reiterate enough the benefit to the member of having a resource like you within the organization who’s doing that work to making those connections and putting them in touch with the people they need to or vice versa, putting the people at the program in touch with the retailers that can influence these programs or make them aware of the challenges at that local level. So awesome to hear those updates. Go ahead. I
Frank Sandtner: Do want to let you know that it’s thanks to Nationwide Marketing Group. Nationwide Marketing Group has had a commitment to sustainability for many years dating back to Rick Weinberg, we won partner of the year for sustained excellence for the 10th consecutive year this year. And as a result of that, this is way before I ever got involved. Rick, he did the digging.
Rob Stott: The dirty work.
Frank Sandtner: And that enabled us to be in the position that we’re in right now. You would not be able to just show up at the Energy Star meeting and say, “Hey, here I am. Make it all come together.” There’s relationships that Rick had that he’s now handed over to me that I’ve then taken those, tried to grow them even further, that enabled this to be possible. I would not be able to stand in front of you or I’m actually sitting and say that you put a challenge in front of me regardless of what it is related to inflation reduction, and I will solve it if it wasn’t for Rick and the things that he did over the years. Nationwide is the one who, out of their own hide, in terms of sort of give back to a cause which is bigger than everything, which is the environment and has done that year after year, that is now paying off because we have the connections and the relationships and the understanding of how this whole thing works.
Rob Stott: The groundwork’s been laid and it’s been built over time too. Don’t have EPA showing up to two Primetimes in a row if it’s not for all of that, the work that had been done and relationships that have been built and showing up on a podcast and this past March to being involved in sessions at this past show, lots going on. It’s exciting to see too, because everyone saw the work that Rick had done and I think appreciated it. And again, probably another underestimated just the amount of effort that he put into it, but to see where it’s grown and how it’s grown and what it’s become today, it’s awesome. And to your point, only something that happens because of the Nationwide Marketing Group.
Frank Sandtner: And we are now at the point where we have people wanting to come to our show.
Rob Stott: Yeah. That’s awesome.
Frank Sandtner: We have now, based on meetings that we had last week, we have utilities. So let’s say a year ago, we had never had anybody from the EPA come, now we’ve had that happen. We never had anybody from DOE come, now, we’ve had that happen. We’ve never had anybody from NASEO. Okay? We’ve never had a utility come to our show. That’s never happened. Okay. So there’s this very, very significant effort happening right now in California called CalMTA. It’s a market transformation organization that ultimately will encompass the entire state. Well, we met with one of the ladies there that runs it and told her about this event called Primetime. She’s like, “Hmm”
Rob Stott: “I need to be there.”
Frank Sandtner: “That sounds like something I need to see.” Right.
Rob Stott: That’s awesome.
Frank Sandtner: So the awareness that there is this massive force called Nationwide Marketing Group that can do significant things to help with sustainability and the environment, we’ve let that one out. There’s high awareness and thank goodness I could do it with full confidence.
Rob Stott: Yeah, absolutely.
Frank Sandtner: The show that we put on is spectacular. The people from the government that have come to our shows, Dan Cronin, who came from EPA, is now planning to come every year.
Rob Stott: Oh, that’s awesome.
Frank Sandtner: Right? So getting that level of person who influences a lot of things that happen is a big deal. For example, through Dan Cronin, we were able to get the all in one unit included in some of the energy efficiency programs. It had never been done, but we kind of put in his face a few times and then he ultimately said, “Okay.”
Rob Stott: That’s awesome. I just need to get Frank off my back.
Frank Sandtner: I could be a big pest too, when necessary.
Rob Stott: Well, hey, that’s a good preview too of what’s to come because I think to your point, this is something where it feels like an inflection point or it’s ready to take off even though it’s been, what, 16 years in the making, 10 years of the sustained excellence, to your point, but awesome that it really feels like we’re at a turning point with just the potential expansion and growth of the program and its impact within the group and then within the members and of course in turn with their communities. But nice little preview of what possibly could be coming in San Antonio this past March or this upcoming March, right?
Frank Sandtner: San Antonio, here we come. So basically we’ve been going down this path, keep bringing in new partners, federal government partners, and then working a lot with the manufacturers and trying to integrate everything that we do because the Energy Star brand is only useful when it’s part of a product. And what we are thinking of is that we’re going to ask for the world, we’re going to ask for the moon and we’ll see what happens. We are probably going to ask some state energy officials to come to the show. Imagine if we were able to get somebody from the state energy official office from Austin. Austin and San Antonio is a short drive, a one hour drive to come to the show to plant the seed, because Texas is a big state.
Texas actually has more money in Inflation Reduction Act than any other state, more than California. So if we could get somebody from that office to come to Primetime and understand the independent retail channel, and then that person goes back and speaks on our behalf to all the other states because they have a lot of these state meetings and says, “Yeah, Nationwide man, you got to connect with them. That’s the channel that’s going to do the best for you in this program.”
Rob Stott: That’s awesome.
Frank Sandtner: Then I will say like, wow, that is big. I’m looking to do something big.
Rob Stott: Huge. Yeah. Hey.
Frank Sandtner: And maybe I can’t accomplish that, but I’m going to shoot to the stars.
Rob Stott: That’s what they say about Texas. Right? Everything’s bigger in Texas, so might as well
Frank Sandtner: Shoot for the stars, the Texas star, the lone star.
Rob Stott: Yeah. It’s incredible, man. Well, hey, appreciate the update as always. Looking forward to continuing to follow. I know whether I want to or not, you’re going to make me have you on the podcast for these updates. I love it though. You could twist my arm all you want because it’s always good to hear from you and see the work that you’re doing because incredible and needs to be talked about and I’m glad that we’re able to do it on a regular basis. So Mr. Sandtner, I appreciate the update and look forward to seeing what’s coming next.
Frank Sandtner: Well, just the last thought is that the work is only for the members. I’m not doing it for myself. If I could make a lot of members more successful in the coming years, this program runs until 2031, then I will feel that I’ve done my duty and served the members well.
Rob Stott: That’s awesome. Well, a good mic drop moment and I know that you are doing right by them for sure. So it’s like I said, incredible to watch and play just a small part in. So we appreciate it and look forward to catching up again soon.
Frank Sandtner: Awesome. Thanks so much.
