May 1, 2002

Dear HERO Participant,

Congratulations on your decision to participate in the HERO Program. Whether your home is a newly built home or an existing home, your participation in the HERO Program will benefit you, in saved utility bills and greater comfort, long after any rebate that you receive for making your home more energy efficient is gone. If your home is newly constructed - your rebate will be determined by multiplying your home energy rating's energy efficiency premium by 20%. Your rebate will be the result of this calculation, up to a maximum of $2,000. If your home is a pre-existing home - your rebate will be determined by either multiplying your home energy rating's energy efficiency premium by 20%, or by multiplying the cost of the energy efficiency improvements you make to the home by 20% - whichever is the lesser of the two. Your rebate will be the result of this calculation, up to a maximum of $2,000. Your cash rebate amount currently will be taxable, though we have applied to the IRS for a declaration that this award be nontaxable. Should the IRS reverse their decision on taxing this cash rebate, you will not receive a 1099 for this rebate amount in the upcoming tax season. Please save this notification with your tax information for the upcoming tax season. If you have any questions, please call us at (225) 342-1399 or (800) 836-9589. Please visit our web site, for an explanation of the HERO Program, and step by step instructions on how to participate in the program, at :

http://www.dnr.state.la.us/SEC/EXECDIV/TECHASMT/programs/residential/hero/index.html

Once your home energy rating has been submitted to the Department of Natural Resources by your rater, you can monitor the status of your application through the HERO system by going to :

http://sonris-www.dnr.state.la.us/www_root/sonris_portal_1.htm

clicking on the lighthouse at the top of the screen, and then clicking on "Homeowner/Builder Inquiry" and entering your social security number. Please take advantage of this feature to keep yourself abreast of the status of your application through the system. By participating in this program you consent to a possible follow up rating audit within a three year period from the time of the rebate check date. You will be notified in advance, to schedule a time at your convenience, should your home be randomly selected for such an audit.

Thanks,

Buddy Justice
Federal Energy Analyst Supervisor
Energy Rated Homes of Louisiana
Louisiana Department of Natural Resources

HBJ/dkb

Enclosure