We, in our company, in these two instances, are taking the approach that we are doing our customers a favor by making them aware of the current and future situations within the industry. As it happens, we anticipate and hope that reaction to the two situations may in fact help our business this year and want you to be aware of our thoughts.

First, let’s look at the efficiency change in May 2013. Here in Missouri, we are the most southern state in the Northern region, thus mandating that we install 90-plus percent furnaces. While I am very curious as to how the federal government intends to police these new changes, we are proceeding on the basis that they are going to be a reality. We are finding that in 25-40 percent of the homes we are in, it is going to be extremely difficult and impractical to install the PVC venting required for a 90-plus percent furnace. Therefore, we have prepared a letter which we are handing out, or mailing, to any customer who has a furnace that is 15 years old or older where we can tell that installing the PVC is going to be very difficult.

I will be happy to send you a copy of the letter if you email me. Our letter does not attempt to pressure the customer, but makes them aware of the situation and lets them know that if they want to avoid the problem they should consider changing that furnace during 2012.

In the opposite situation, when we have someone who is already planning to replace their furnace this year, we make them aware of the upcoming efficiency change, and recommend strongly that they consider a 90-plus percent furnace for the replacement. This is obviously so that they don’t have a furnace that is lower efficiency than the industry standard within a year after it is installed. In both of these situations, we feel we are doing the right thing for the customer by making them aware of the upcoming issue.

R-22 and R-410A

Similarly, as I’m sure you are all aware, the recent Environmental Protection Agency (EPA) ruling regarding the amount of Freon 22 that may be manufactured in 2012 has caused the refrigerant market to go crazy. While we feel that the pricing will level off in the not-too-distant future, we believe that with reduced manufacturing capability, the price will never subside to previous levels. Thus presents itself opportunity No.2.

We are in the process of researching our files to find all of those systems where it was necessary for us to add a sizable amount of refrigerant in the last two years. We have prepared a letter and are contacting these customers to make them aware of what has happened in the refrigerant market and advising them, that should it be necessary for us to add that much refrigerant this year, the pricing will be significantly higher.

In conjunction with the notice, we are offering an early season sale on new R-410A systems in an attempt to encourage customers to make the change prior to us being in the hot, and hopefully, busiest part of the season.

In these cases we feel we are taking the right approach by notifying our customers about a situation that could significantly affect them. We can then at least feel comfortable about the fact that we made them aware of what was happening and left the ultimate decision up to them. Sure, we are hopeful some business will be created, but in any case we feel we will be making a positive impression on our customers.

Publication date: 3/5/2012