Supply and service sector faces new competition

Mechanical Business has uncovered information regarding Hydro One that will impact mechanical contractors and their suppliers. Our interest was prompted by a flyer an MB staffer received in the mail concerning a British-based company named HomeServe that sells a range of emergency home repair programs. Subsequently, we learned that Hydro One, an electrical utility in Ontario, is endorsing three exclusive partners, one of which is HomeServe, in the sale of residential HVAC and plumbing products, and services.

The other partners are Home Depot and 1Click Heating and Cooling, which bills itself as Canada’s first fully ecommerce-based HVAC company. When you visit My Energy Marketplace on the Hydro One website a variety of products are highlighted including home repair plans along with brand name air conditioning units, heat
pumps and water heaters among other products.

These web pages have general notes about these products but when you scroll down to “Featured Products” actual pricing is listed along with rebates, which you can only access if you purchase from that vendor. A button is provided to let the reader learn more or as the site says “explore” about each product. These buttons take the reader to the HomeServe or Home Depot or 1Click websites.

Similar to industry challenges in the 1980s with Ontario gas utilities, Hydro One is taking a different but somewhat similar route into the HVAC and plumbing marketplace. Mechanical Business sent questions to Hydro One to better understand the relationships and intention of the parties involved.

Responses from Hydro One stressed their commitment “to meeting our customers’ evolving energy needs by providing choice and flexibility. As a trusted energy advisor, we have made it easy for customers to learn about energy-efficient appliances that suit their lifestyle through My Energy Marketplace.”

While HomeServe refers to Hydro One as a partner and displays its logo on its website, there are no partnership agreements between Hydro One and the three providers. In fact, Hydro One has no direct relationship with vendors on My Energy Marketplace. The utility has instead entered into a contract with a California website vendor named Bidgely who services utilities throughout North America. This website acts as a referral service for customers who want to pursue products and  services listed on the site. Vendors are authorized by Hydro One to be listed on the site, which is seamlessly integrated in the Hydro One website. Interestingly, Bidgely has the following statement on its website “Bidgely smart shop experience empowers utilities to become center of customers’ universe for smart home and appliance shopping.” Hydro One’s response goes on to confirm its customer databases are not available to approved vendors. However, the Hydro One logo is being made available to vendors if requested.

What will other Canadian electrical utilities do when they look at Hydro One’s strategy? Electrical utilities can certainly promote electrification in a generic sense but featuring specific vendors outside of the traditional service and supply chain seems problematic. This promotion would be less concerning if it simply informed consumers on how to engage reputable and qualified electrical, HVAC or plumbing contractors for access to product and services.