Missouri electric utility ordered to stop appliance repair service

An association of independent Missouri hvac contractors has won a major battle in the fight for fair competition between themselves and a utility company.

The Missouri Public Service Commission (PSC) has ruled that AmerenUE, formerly known as Union Electric, is in violation of Missouri’s fair competition laws involving their “On-Call Appliance Plan.” The utility will terminate its repair service plan to avoid paying penalties of up to $12,500 per violation, and will not institute any similar plan through Dec. 31, 2001.

The Missouri Coalition for Fair Competition, which fought for enactment of the fair competition law (The News, Aug. 10, 1998), had filed a complaint with the Missouri PSC. The hvac contractors complained that AmerenUE had misled consumers in their advertising, which implied that the utility would perform repairs on furnaces, air conditioners, and hot water heaters.

AmerenUE did not perform the repairs, but instead turned the work over to “unknown” contractors. “They [Ameren] never told the public who was performing the repairs,” said the Coalition’s Perry Moore. “One of our sponsors asked Ameren for a list of the names but they refused to give it to us. Maybe the utility thought they were protecting someone. I really don’t know why they wouldn’t reveal the names.”

The utility was found in violation of Section 386.756 of the Revised Statutes of Missouri. The section said that a utility shall not allow any affiliate or utility contractor to use the name of the utility unless the utility, affiliate, or utility contractor disclosed on all advertising that the services provided were not regulated by the Missouri PSC.

The fines for violating the statute could have exceeded millions of dollars, according to Terry Allen, a Jefferson City, Mo. attorney who handled the complaint for the Coalition. He added that Ameren, the state’s largest electric provider and third-largest distributor of natural gas, “misled consumers with advertising in violation of the same law they purported to support.”

Better than fine

So what’s better, termination of the On-Call service plan, or a whopping fine for the utility?

“We prefer what we got,” said Moore. “The settlement was negotiated by several groups including the Coalition. If Ameren had been fined, we would have still been fighting them in 2001.”

Moore, whose background is in the wholesale supply business, said that his group won the battle because of a unified front.

“We refused to let ACCA or other mechanical contractors take to the forefront of the effort,” he said. “We all worked under one umbrella and we eventually got support from the AFL-CIO and the AARP, to name two.

“We ran this as a political campaign, which is the only way to win a battle like this.”

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