By Robert P. Mader of Contractor’s Staff
Boston – Saying they can’t get straight answers from Keyspan about the activities of the utility’s unregulated subsidiaries, Boston-area contractors have turned to legislation – Massachusetts House Bill 1379, The Fair Competition Bill.
The bill, spearheaded by the Massachusetts Alliance for Fair Utility Competition, would prohibit Keyspan and other utility subsidiaries from using their parent company corporate logos, forbid joint advertising and marketing, and require a structural separation between regulated and unregulated businesses, said Monica Lawton, executive director of the Associated Subcontractors of Massachusetts.
Contractors object to Keyspan performing commercial and residential service and advertising for Keyspan Home Energy Services and Web services provider MyHomeKey.com.
"When you throw hundreds of thousands of dollars into advertising, at least show us that it’s not rate-payer money – and they can’t do that," said Hugh Kelleher, executive director of the Plumbing-Heating-Cooling Contractors of Greater Boston and chairman of the alliance.
New York-based Keyspan bought Eastern Enterprises and its subsidiaries Boston Gas, Colonial Gas and Essex Gas last year. It immediately drew the ire of plumbing and heating contractors and the Massachusetts Oilheat Council by giving away free furnaces and boilers to get homeowners to switch from oil to gas (August 2000, pg. 1). That giveaway is ongoing.
Keyspan spokesman Bob Mahoney said all of the service operrations are under the umbrella of unregulated subsidiary Keyspan Services.
Nevertheless, the Keyspan companies appear to be closely intertwined. The Keyspan Internet homepage links directly to Keyspan Home Energy Services and to joint venture myHomeKey.com. MyHomeKey.com, is a partnership among myHomeKey.com, headquartered in San Francisco, and Keyspan, Texas Utilities Energy Services and California-based Sempra Energy. The utilities handle all the advertising in their local markets and sign up the contractors. Services range from plumbing and heating to lawn care and maid service.
Keyspan Home Energy Service offers a variety of plumbing and heating services, including heating unit sales, service and service contracts, water heaters, pool heaters and snow-melt systems. The number for consumers to call is 1-800-KEYSPAN, the same main number they would use to report gas leaks.
The phone number for commercial service work connects to Keyspan Energy Delivery, the regulated gas transmission company.
Keyspan also recently bought Delta Mechanical, a large Norwich, Conn., mechanical contractor that performs commercial work.
"Our concern as always has been that we feel that they use their essentially monopoly status when they advertise in the local papers," Kelleher said. "When they are advertising this new service [myHomeKey.com], when you look at it you’d think you are calling the gas company. People associate their logo and their trucks with a well-established utility business and naturally are going to feel at least somewhat comfortable calling them for assistance in all these other areas.
"We are concerned that they are using rate-payer money to promote all these new businesses," Kelleher continued, "and, in the process, are basically using rate-payer dollars to undermine small- and medium-size contractors."
Kelleher referred to the program to give away gas furnaces and boilers: "They did this at a time when prices for consumers to purchase gas were going way up, but they still found the revenue right out of rate-payer money to sponsor giveaways. This hurts small contractors.
"No contractor can compete against a huge utility monopoly that can make its huge profits off the backs of rate-payers," he said. "We don’t mind if they get into other businesses as long as they can show that they are not subsidizing those businesses with rate-payer dollars. We are willing to go head to head with them and any of their companies if they are playing by same rules all other contractors are playing by."
Lawson, whose members are almost exclusively commercial/industrial, said Keyspan has announced plans to enter the office and hotel construction markets.
Lawson also said that colleagues who are not in the industry told her they thought myHomeKey.com was the same as Keyspan.
"Their advertising is designed to confuse," she said.