City Offers Rebates for Furnace Replacements This Winter

MILLBROOK, Ind. — Millbrook Municipal Utilities will offer rebates of up to $500 to homeowners who replace an aging furnace with a qualifying high-efficiency model this winter, the utility announced Monday, as part of an effort to shave peak demand during the coldest weeks of January and February.

The rebate program, funded through MMU’s existing energy-efficiency surcharge rather than new ratepayer fees, opens for applications November 1 and runs through March 31 or until the $280,000 set aside for the program runs out, whichever comes first. Utility officials said the program is intentionally timed to catch homeowners replacing a furnace that fails mid-winter, historically the single largest driver of emergency HVAC spending in the city.

"Furnaces don't usually die in October. They die on the coldest night in January, when everyone needs a new one at the same time and nobody has time to shop around," said MMU efficiency program manager Dale Rourke. "We'd rather get ahead of that and make the efficient option the easy option."

The base rebate is $500 for any furnace rated at 95% AFUE (annual fuel utilization efficiency) or higher installed by a contractor registered with Castellan County. Households that also qualify for the Indiana Low-Income Home Energy Assistance Program are eligible for an additional $300 through a separate income-qualified track, bringing their total rebate to $800, before standard installation costs.

Why the City Is Paying for This

MMU’s board has pushed efficiency rebates for several years, but this is the first time furnaces specifically have been targeted at this rebate level. Utility data presented to the city council in September showed that Millbrook’s winter peak electric and gas demand has grown roughly 9% over the past five years, driven partly by population growth in the Elmhurst and Thornfield subdivisions and partly by an aging furnace stock: MMU estimates nearly a third of furnaces in homes built before 1995 are operating below 80% efficiency.

Replacing even a few hundred of those units with higher-efficiency models, Rourke told the council, reduces strain on the system during the exact hours — typically 6 to 9 a.m. on the coldest mornings — when MMU has had to buy supplemental power or gas on the more expensive spot market in each of the last three winters.

How to Apply for the Rebate

Homeowners apply after installation, not before, through a form on MMU’s website or in person at the utility’s Court Street office. The application requires the contractor’s itemized invoice showing the furnace model and AFUE rating, proof the installing contractor holds a current Castellan County registration, and a copy of the homeowner’s most recent MMU utility bill to confirm the service address.

• Submit the application within 60 days of the installation date; late applications are not accepted.
• The furnace must be installed by a contractor registered with Castellan County — homeowner self-installs do not qualify.
• Rebates are paid as a check or a credit toward a future MMU bill, homeowner’s choice, typically within six to eight weeks of a complete application.
• The income-qualified $300 add-on requires a current LIHEAP eligibility letter, available through the Castellan County Community Action office.

Rourke said the utility expects to process the rebate for roughly 450 to 500 furnace replacements before the funds are exhausted, based on the average claim amount and the budgeted total, though he cautioned that estimate could shift if a particularly cold stretch this winter drives a surge of emergency replacements late in the season.

A Smaller Add-On for Smart Thermostats

The program also includes a separate, smaller rebate of $50 for installing a programmable or smart thermostat at the same time as a furnace replacement, and $75 for a professional duct-sealing inspection on homes more than 25 years old. Both are optional and paid on top of the base furnace rebate, though homeowners must request them on the same application rather than filing separately.

What Council Members Said

Council member Denise Okafor, who represents the Elmhurst ward and has pushed for more consumer-facing efficiency programs since taking office in 2024, called the rebate “a reasonable use of a fund that homeowners are already paying into” when the program came up for a routine budget briefing at this month’s council meeting. No council vote was required, since the rebate draws on MMU’s existing surcharge fund rather than the city’s general budget.

A Lesson From Last Winter

The timing of the rebate is not an accident. Last January, during a cold snap that saw overnight lows drop below zero for six consecutive nights, MMU’s emergency line logged 212 furnace-failure calls in a single week, more than triple its typical winter weekly volume. Several local HVAC contractors reported waits of five to seven days for a full furnace replacement during that stretch, leaving some households relying on space heaters or staying with relatives while they waited.

“We heard directly from people who had no furnace and no appointment available for most of a week in January,” Rourke told the council. “Some of that is unavoidable — you can’t predict exactly which furnace fails on which night. But if more of the oldest, least efficient units get replaced on a homeowner’s own schedule in November instead of failing in January, that’s fewer emergency calls competing for the same limited number of contractor appointments when it’s fifteen below outside.”

Local contractor response to the rebate has been positive so far, according to MMU, which briefed roughly a dozen Castellan County-registered HVAC companies on the program’s requirements in a session earlier this month. “Anything that gets people to replace a furnace before it dies instead of after is good for everyone, including us,” said Walt Brennan, owner of Brennan Heating & Cooling, one of the contractors who attended the briefing. “The emergency replacements in January are the worst version of this job. Nobody’s shopping around, nobody’s comparing efficiency ratings, they just want heat back on. A rebate that gets ahead of that is good news for homeowners.”

MMU plans to publish weekly updates on remaining program funds on its website once applications open, and Rourke said the utility will decide by early spring whether to renew or expand the program for next winter based on how quickly the current round of funding is claimed.