UPDATE: HVAC Coalition denied “late intervenor” status

 

Several weeks ago, Mechanical Business published a story about Hydro One, a major electricity distribution company in Ontario, endorsing three exclusive partners for the sale of an array of residential HVAC and plumbing systems, including heat pumps, in their franchise area.

The matter was brought to the attention of the HVAC Coalition of Ontario by Mechanical Business. As a precautionary measure, the HVAC Coalition filed for “late intervenor” status in Hydro One’s rate application hearing, which is currently underway before the Ontario Energy Board (EB-2021-0110).

The OEB has denied that request and in its response to the HVAC Coalition noted that if the HVAC Coalition (referred to as HVAC in OEB correspondence) believes “Hydro One’s activity in this regard raises a compliance issue, then HVAC should be addressing this with the OEB’s Consumer Protection & Industry Performance (CPIP) division.”

For more information, contact Martin Luymes at [email protected].

From a previous update published July 28, 2022

Legal counsel for the HVAC Coalition reviewed filings in this proceeding and did not find any reference to this new commercial arrangement, even though it appears from the Hydro One website that it is an activity of the regulated distribution company. No information was filed on the financial implications of this (costs incurred, payments received from the endorsed companies, etc.). As part of intervention request, the Coalition also filed a number of interrogatories seeking information on the scope and rationale for the retail programs and the basis for any exclusive contractual arrangements. The Coalition’s concern, as in the past, is mainly around the endorsement by a regulated utility of a select group of HVAC contractors, which may have the potential to undermine competition, and therefore the availability of energy-efficient equipment and services to Hydro One customers at affordable prices.

Mechanical Business will continue to update readers on this issue. The original article also appears in the July/August issue.

Original Article, published July 11, 2022

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.” It is interesting to note that Hydro One has a disclaimer on the product pages.

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 any 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 the 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.

It is clear Hydro One’s strategy is coming from the electrification climate change push from the provinces and the federal government. 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.

 

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