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"Clunkers" appliance plan worries Minnesota, North Dakota retailers

FARGO -- A $296 million federal Cash for Clunkers appliance program set to begin next spring in Minnesota and North Dakota is making consumers anxious and causing headaches for some retailers.

"We get calls constantly," said Shawn Driscoll, president of Fargo appliance retailer Nodak Stores, from consumers who think the State Energy Appliance Efficiency Rebate program has already begun.

"Somebody was in here in the last 10 minutes asking if it had started yet," Chuck Matthees, president of Rigels Inc. in Moorhead, said Thursday.

"The wheels are turning very slowly," he said.

The rebate program was announced July 14 by the U.S. Department of Energy. Individual states had until Oct. 15 to submit a plan indicating what types of Energy Star appliances would be included in their rebate program.

North Dakota expects to receive about $615,000, said Zachary Weiss, state energy engineer with the North Dakota Department of Commerce. From 10 to 25 percent of each award covers administrative costs, according to DOE guidelines.

Minnesota will receive $5 million for its rebate program.

"It's a train wreck," said John White, executive vice president of Brand Source, a natural merchandising group for appliance retailers based in Anaheim, Calif.

"There's certainly a good amount of pent-up demand - people waiting for this program to start," he said.

As a result, Driscoll has seen regular appliance sales decline. Customers have been calling since August asking about the program, he said.

"I've been in stores and heard consumers say 'I'm waiting until I can get this $500 or $2,000 rebate on appliances before I buy anything,' " said White, a 1994 North Dakota State University graduate who once worked at Rigels.

In most states, the rebate will total $50 to $200, he said.

"In the appliance world, that type of rebate is normal out there all the time," White said.

Next month, some of Rigels' appliance manufacturers will be offering rebates from $100 to $200 when consumers buy washer/dryer combinations that qualify under the Energy Star program, Matthees said.

"That will be comparable or more than what the federal program would have been," he said.