Feedback for the Week: September 24, 2001
Different View of Utilities
I want to thank John R. Hall for his August 6 editorial (“Put Aside the Apprehension and Deal With the Utilities”). He is right. The industry has changed. And sometimes evolution is great.But it may be too simple to resolve all the local issues. I think that we need to focus this debate inside of a local context. It is not a national issue. Deregulation is at the local level. Its resolutions need to be local.
As I read the editorial, my eyes glanced at another item on my desk — a consumer brochure from one of our local gas utility affiliates that advertises unlimited hvac equipment service for a mere $14.99-per-month fee, which can be added to the consumer’s gas utility bill. Clean & check service can be purchased for only $8.49 per month — again, added to the consumer’s gas utility bill. In this brochure, repair personnel are denigrated (“Can the repairman be trusted in your home?”). Meanwhile, the utility advertises itself as “the trusted provider of product protection and repair services.” Plus, it helps me to know that when I paid my gas utility bill, I helped fund this advertising.
Please tell me, why I shouldn’t be apprehensive? Please tell me why I should pay for the gas utility to compete directly against me?
True, there are some states in which the relationships between the utilities and contractors are cooperative ones that mutually benefit all, such as Kansas City Power & Light and the local ACCA chapter. But in many states, that is not the case. In one case, a utility was giving away free gas furnaces to residential customers. Do you know any contractors that can afford to do that? In another case, a utility conglomerate entered the local hvac contracting market with predatory marketing practices. Then, after a mere two years in the market, the utility found it to be an unprofitable venture and departed — leaving thousands of customers with few or no options.
In our area, there are opportunities for contractors to partner with the utilities. And many do. No problem. However, the editorial does not reflect the experience of the Northern Illinois Chapter of ACCA (NIACCA) and the independent hvac contracting community in Illinois.
In late July, after spending literally tens of thousands of dollars in legislative lobbying fees and countless hours of effort on the part of our members and board, the Illinois Commerce Commission decided that joint marketing among the gas utilities and their affiliate companies should be allowed in our state. The matter now moves to the legislative level, and it is our hope that this anti-contractor position can be reversed. In Illinois, we are looking over our shoulder and in our rearview mirrors.
Why? Because our hindsight, particularly in the hvac contracting community, has always been better than our foresight. The era of utility deregulation in our state is in its critical formative years, the time when the ground rules that will establish our “level playing field” are being set. We need to play in that arena and be a voice that’s heard.
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We wholeheartedly agree that building one’s business to weather the onslaught of strong or “unfair” competition is an extremely effective proactive strategy in any business or economic climate. But the threat of utility cross-subsidization and joint marketing is not necessarily resolved in a partnership with the utility. It would truly be naïve to believe that that would work everywhere.
Chris Colditz President, Northern Illinois Chapter, Air Conditioning Contractors of America (NIACCA)
Publication date: 09/24/2001