Duke Progress ending HVAC repair service, leaving some customers steamed
Marvin Woll of Raleigh was peeved when Duke Energy Progress notified him this month that his heating and air conditioning repair service would soon be canceled.
Woll, a retired school counselor on a fixed income, signed up for the power company’s service nearly four years ago; he has paid over $800 into the program through $17.99 monthly payments. In all that time, Woll notes, he hasn’t missed a payment and his air conditioner didn’t need a single repair.
Then Woll learned that some program participants would be getting full refunds. The power company is refunding all participants who have signed up for fewer than 12 months.
“That upsets me even more that they’re giving refunds to some people,” Woll said. “Why not just give a 12-month refund to us suckers that have been with it for four years?”
Such is the luck of the draw in unregulated services offered by public utilities, not just in North Carolina but all over the country. These adjunct services are not subject to oversight by the N.C. Utilities Commission because repairing and maintaining appliances is not a regulated monopoly service.
The Duke Energy Progress HVAC repair program is being discontinued Aug. 31. The program covers up to $2,000 a year in heating and cooling repairs.
The company is issuing refunds even though there is no requirement to do so, said Duke spokesman Jeff Brooks.
“Participating customers have enjoyed the benefits of this pilot for years, and many have taken advantage of it,” Brooks said in an email. “But some signed up to participate in the service recently only to find out the pilot was ending soon after. As a gesture of good will, we elected to refund the fees for those customers who had participated in the program for less than 12 months, many for only a few short months.”
Utilities have leveraged their brand names for years to generate extra cash by selling insurance policies on appliances and home equipment. In some states utilities have branched out into insuring TVs and electronics. Raleigh-based Duke Energy Progress offers four such programs now, including service for home wiring, water heaters and surge protection.
PSNC Energy, the natural gas utility, markets nine programs that have a total of 50,000 subscribers in the state for maintenance of sewer lines, home plumbing and fireplace logs, among other services. The company’s HVAC repair service has signed up 5,000 people since 2007, said spokeswoman Jodie Roberts Smith.
The N.C. Utilities Commission requires that these non-regulated services be kept separate from regulated utility services, with clear disclosures to customers that they are not regulated.
“It’s just another revenue stream for utilities, just like other businesses,” said James McLawhorn, who heads the electric division of the Public Staff, the regulatory agency that represents the public before the Utilities Commission.
Duke Energy Progress, formerly known as Progress Energy, launched its HVAC service in 2010 as a pilot program in certain parts of Raleigh; the company said it had signed up about 700 participants. It cost $17.99 a month for heating and cooling repairs. For households with multiple heating and cooling units, the cost to insure the second unit is $15.99. The program also offers a $9.99-a-month option to insure heating units only. Service call fees are $35.
“Part of the purpose of a pilot to is try out new programs to determine customer need and interest in the benefits the program provides,” Brooks said. “The HVAC pilot allowed Duke Energy Progress to offer a valuable service to customers and learn about the program. We are continuously evaluating potential services which offer solutions to customers.
Because the program is unregulated, the company doesn’t have to disclose how many people signed up, how many made claims for repairs and how many will be getting refunds.
Woll still has two months to claim an air conditioner repair if his system conks out this summer. In the future Woll said he might just put the money in a piggy bank to save for an HVAC emergency.
“Legally I have no ground to stand on because they had that one sentence that says they can terminate it at any time,” he said. “But would any person have enrolled in that if they knew it could be terminated in a few years?”
Murawski: 919-829-8932
This story was originally published June 29, 2015 at 4:25 PM with the headline "Duke Progress ending HVAC repair service, leaving some customers steamed."