Competition From The Utility

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dezwitinc

Senior Member
Location
Delray Beach, FL
Just a little rant about our POCO.
For a couple of years now, the POCO has been in the generator installation business, hiring local electrical contractors to handle the installations.
Now they have their own State Certified Master's license and are going full tilt as a contractor, selling and installing generators, still hiring subs but maintaining control over the permit process.
I understand that all companies have the right to diversify and do whatever it takes to turn a profit but when the utility starts to compete with the local contractor on this level, I take offense.
Given their name and resources, it has put the rest of us at a very unfair advantage when it comes to this work.
Due to several companies in the business going belly up and leaving consumers hanging, the customer base has become suspicious of contractors selling generators around here.
It is still my job to capture the trust of these customers and I don't have a problem with that.
What I do have a problem with is, where are they going to stop?
Remember when the orange store came around to sell us supplies and then became our competition?
A public utility should be there to serve the public, not compete with them on a daily basis.
They already have one monopoly, I don't want to see them get a stranglehold on another.
What say you?
 

LawnGuyLandSparky

Senior Member
Here the utility installs and "rents" parking lot lighting. They won't install a pole, but if there's already a pole within eyesight of your business, the POCO will install a 250 or 400w HPS spotlight on it, and you pay a flat monthly fee on your electric bill for it's usage & maintainence.

These lights are an eyesore, and often shine more than 45 degrees above the horizontal. The light goes everywhere. Sometimes, they install them across the street from the premisis being served. They're so obnoxious, local legislation had to be passed to prevent any further installs, and the fixture had to be modified to a less obtrusive one.

On another front, your utility, FPL, was to be the contractor of record for building & installing 24 wind powered turbines 1 mile off our famous Jones Beach. Under the proposed (and since scrapped) agreement, FPL would own & operate the "wind farm" and our POCO had to purchase all power generated and pay for the entire project, assuring FPL a profit whether the plan actually worked or it didn't work. By the time the plan was being finalized, the cost of steel, copper, etc caused the projected costs to DOUBLE and FPL and LIPA (our poco) still wanted to go ahead with it.

Not for nothing, but the whole idea stunk on every level imaginable, made absolutely no sense to try to harness "green power" at a cost 2x more than oil, and IMHO was nothing more than a grand scheme between our 2 utilities to funnel tons of utility money into the pockets of a few well connected politicos.
 

ITO

Senior Member
Location
Texas
I am more than a little leery of competing against and entity that has the ability to rig the game in their favor, which in the long run hurts everyone.
 

petersonra

Senior Member
Location
Northern illinois
Occupation
engineer
The POCO is doing this because they can make a profit doing so. According to your post they are actually handling the installation through local contractors. Is it remotely possible your real beef is that you are not one of the contractors they selected?

It is probable that the amount of this kind of business generated by the POCO becoming involved is substantially more than it was before hand. You probably didn't really lose any business, the amount of business just increased and your share did not.
 

SmithBuilt

Senior Member
Location
Foothills of NC
I have run across the problem with parking lot lighting. Duke Power will install poles and fixtures for a monthly fee. There's no way I can compete with them. One customer told me it cost him about $11/month per pole. Including electricity. He had about 10 put up on his lot and was ecstatic about the $125 monthly for lighting. I don't even see how they are going to make money doing this.

Duke uses one sub the same one that does the bulk of distribution work for them.

I disagree that they are not taking work from us. As car dealers need lights and will pay someone to put them up.
 
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bradleyelectric

Senior Member
Location
forest hill, md
This is happening with the whole economy. Big Orango sells the things mom and pop hardware stores used to. The mom and pops had to find a niche or go out of business. Around here the local hardware store specializes in gas and pellet stoves. The power company has a company that does all kinds of residential service. It is called BGE Home, a seperate company than BGE, a regulated utility.
 

petersonra

Senior Member
Location
Northern illinois
Occupation
engineer
SmithBuilt said:
I have run across the problem with parking lot lighting. Duke Power will install poles and fixtures for a monthly fee. There's no way I can compete with them. One customer told me it cost him about $11/month per pole. Including electricity. He had about 10 put up on his lot and was ecstatic about the $125 monthly for lighting. I don't even see how they are going to make money doing this.

Duke uses one sub the same one that does the bulk of distribution work for them.

I disagree that they are not taking work from us. As car dealers need lights and will pay someone to put them up.

They are leasing the poles to him. The electricity used is not a whole lot, and not having to bill for it saves a lot more than you might think.

If you borrowed $12,000 and paid it off over ten years at 6%, your monthly payment would be in the $125 range. the poles will be there a lot longer then ten years.

Would you charge over $1200 each to put in the poles?
 

SmithBuilt

Senior Member
Location
Foothills of NC
I calculate the power use to be about what they are charging the customer $125. The lights are on photocell I assumed 8 hours with 500 watt fixture.

To me not having to bill is a moot point, they still have to bill for the poles. Which could be on the existing bill.

The power Co also has to maintain the lights also.

I have never installed a treated wood pole before. I'm sure any other we've installed were more than $1200.
 

peter d

Senior Member
Location
New England
SmithBuilt said:
I have run across the problem with parking lot lighting. Duke Power will install poles and fixtures for a monthly fee. There's no way I can compete with them. One customer told me it cost him about $11/month per pole. Including electricity. He had about 10 put up on his lot and was ecstatic about the $125 monthly for lighting. I don't even see how they are going to make money doing this.

Ummm....I don't see what the issue is.

If I look at most utility poles in the commercial districts around here, they will have multiple utility owned floodlights for private business parking lots. Of course a business owner is going to for a small monthly fee rather than one huge bill to install parking lot lighting!
 

petersonra

Senior Member
Location
Northern illinois
Occupation
engineer
SmithBuilt said:
I calculate the power use to be about what they are charging the customer $125. The lights are on photocell I assumed 8 hours with 500 watt fixture.

To me not having to bill is a moot point, they still have to bill for the poles. Which could be on the existing bill.

The power Co also has to maintain the lights also.

I have never installed a treated wood pole before. I'm sure any other we've installed were more than $1200.

8 hours x 500W x30 days x 10 poles = 1200 kWhr. most utilities are not charging 10 cents/kwHr for power that is only used at night when they have excess power available. Around here it is more like 2 or 3 cents.

this is not much different then the deals they have with many cities to supply power to street lights.

maybe the utility can install the pole for less then you can.

i am pretty sure they are not doing it out of the goodness of their black little hearts. somehow they are making money on the deal.
 

goldstar

Senior Member
Location
New Jersey
Occupation
Electrical Contractor
dezwicinc said:
A public utility should be there to serve the public, not compete with them on a daily basis.
They already have one monopoly, I don't want to see them get a stranglehold on another.
What say you?
I'm with you 100%. We here in NJ formed State and County contractors associations to fight this very thing. If you stop and think of just how unfair this is, we small guys bust our chops to make electrical contracting a living. All a POCO needs is one guy with a license and they now have the backing of an entire company of thousands of people with unlimited wealth in advertising. You'll need to unite with other contractors in your state who feel strongly about this, get some lobbyists pounding on the doors of your licensing board and get lawyers to make your case in court, if necessary.

Being part of a contractors association isn't cheap. My annual dues are $300.00 (of which $200.00 goes to the state council - they have the war chest) + bi-monthly dinner meetings (I'm on the exec board) to the tune of about $25-$45 per meeting + the cost of CEU credited courses, etc. The costs are never ending but at least I'm making the $$ and it's better than having a POCO knock you out of the box.
 

dezwitinc

Senior Member
Location
Delray Beach, FL
petersonra said:
The POCO is doing this because they can make a profit doing so. According to your post they are actually handling the installation through local contractors. Is it remotely possible your real beef is that you are not one of the contractors they selected?

It is probable that the amount of this kind of business generated by the POCO becoming involved is substantially more than it was before hand. You probably didn't really lose any business, the amount of business just increased and your share did not.

No it has nothing to do with not being selected as one of their contractors.
In fact, I talked to them several months ago about getting involved in the program that they had in place at the time.
My beef is that a public utility is getting involved in the work that we contractors have traditionally been doing.
With their resources, the playing field is not even close to being level.
They have the legal system on their side in that they form a for profit corporation under the umbrella of the utility and avoid the the regulations that govern how they operate.
This is strictly a matter of the little guy being kicked to the side by the large corporations that we have little ability to take on.
As far as the business increasing, it has fallen off considerably due to the fact that we have not had any serious blows down here for a couple of years.
I have no problem with with competition, in fact, I savor it.
There's nothing better than convincing a customer that we are the company for the job in spite of the fact that our pricing is a little higher.
We provide a premium service for a premium price.
They (the POCO) operate on the principal that you go in low and then wack the customer for all the extras such as sod replacement, vent blocking and window sealing (if required).
I know that you are going to tell me that all is fair in love and gen installation, but my PPE logo still gets trumped by the local POCO logo with the lightning bolt through it.
Keep in mind that this POCO has a sweetheart deal with the legislature that allows them to backcharge the consumer for 100% of storm damage and repairs.
Yes, they provide a service that we all need, but enough is enough.
What happens when they start competing with us for electrical installations in homes and businesses?
They have the ability to finance projects at a rate that has little or no effect on their bottom line.
Can you finance a TI or a house renovation?
Trust me, this is where they are heading. (P.S. I am not a conspiracy theorist, but look at the historical data on moves like this by large corporations).
Big Brother is going to trump (Trump) us all and the American dream will fall by the wayside if a stand is not taken by the rank and file of this country in matters like this.
 
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satcom

Senior Member
dezwitinc said:
Thank you Goldstar.
Is there a website where I can see what kind of initiatives you folks are taking?
I would be interested to see how you are handling it.

The Assn has been intrested in this issue since 1992, when they first posed doing parking lot lighting.

http://njeca.org/
 

goldstar

Senior Member
Location
New Jersey
Occupation
Electrical Contractor
You can go to the website Satcom posted but I doubt that you'll find what you're looking for. If you want to you can try and contact someone at the state council by snail mail and ask if they can point you in the right direction. If you don't get a response send me a PM and I'll give you the name of someone to contact.

Phil
 

john p

Member
Around my area the poco is a coopertive and we have off peak meters and panels for electric heat/water heaters/dryers. The contractors install the Services and the poco has a contractors lic. so when a customer says they have a problem, the off peak dept. sends out a electrician and they replace or repair items instead of telling them to hire a contractor. I had a customer that they replaced the offpeak panel for. Im glad im a member off this coop.
When a new customer is asking the poco aboat offpeak the poco sends out a electrician and talks to them and if you they are installing slab heat and havent picked a contractor out yet. yep they just happen to be electrical contractors on the side and can help them nice people out. How nice to get paid to check out new customers and get all the work you can handle. Instead of reffering the customers to get a qualified electrian. All these men are qualified master electricians but I dont like the way the coop. is allowing this to happen.
 

JohnJ0906

Senior Member
Location
Baltimore, MD
bradleyelectric said:
The power company has a company that does all kinds of residential service. It is called BGE Home, a seperate company than BGE, a regulated utility.

I was going to mention this myself. However, I don't know how much impact they have had on the ECs.

They do mention being a seperate company in all the ads I have heard, but exactly how seperate they are.... :roll:
 
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