POCO get in the home wiring business

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Mike03a3

Mike03a3

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Location
Virginia
Today I received from Dominion electric (my POCO) an invitation to pay them an additional $3.50 a month on my electric bill.

If I sign up for the "In-Home Electric Line Repair Program" they will now repair, replace or restore any wiring, switches, outlets, receptacles, boxes, fuses, breakers or connectors from the service entrance through receptacle or outlet boxes. This includes the panels, but excludes fixtures, appliances, appliance cords, extension cords or light bulbs.

Landscape wiring or any other wiring leaving the primary dwelling is also excluded.

I wonder how many people will sign up.
 
Mike03a3 said:
I wonder how many people will sign up.
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I've wondered about this too. This first showed up in the phone bill back in the 70's (for me), and it was $.50/month service fee. It covered all of your premise wiring, but non of customer owned equipment.

I did some quick math, let's say the phone company has 10-million customers. Let's also assume that 20% of these customers sign up for this. That's 2-million customers timex $.50/month = $1,000,000/month in additional revenue. I bet they didn't spend $100,000/month on fixing any of these problems, a truly sweet deal for them. How many times has your phone wiring gone bad?

I'll bet that more than 20% signed up.
 
iwire said:
It might be a good deal for an EC to be hooked up with the program. You get in the door to fix the problem under warranty for little profit but you can then sell them on other work.
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Bob,

That would be OK if the POCO were restricted to use only outside licensed electrical contractors. We (as independent electrical contractors) had to fight this here in NJ because several POCO's wanted to go beyond providing the line voltage to residences to installations and services. I'm sure some cost accountant gave them this idea of charging a monthly fee for these services. They are merely looking for RMR (re-occurring monthly revenue) similar to what the alarm companies are doing with monitoring. The long and short of it is that it's an insurance policy that many HO's will probably never use and the POCO gets a monthly windfall that they didn't have before.

If you stop and think about this, guys like you and I have to work hard to obtain and maintain our licenses, get jobs, hire employees, etc. The POCO comes along, only requires one license for the entire company and then dumps 10,000 employees out there to compete with you. You can't compete at that level. I would fight this to the end.

Regards,

Phil
 
I don't like the idea that a public utility, who gains certain legal and business advantages afforded them by law, is becoming my competitor. Well, not mine, but somebody's. This is the same reason I don't buy Sylvania lamps, because they operate bucket trucks in my area doing parking lot light repairs. I don't like vendors as competitors, either.
 
goldstar said:
Bob,

That would be OK if the POCO were restricted to use only outside licensed electrical contractors.
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I agree, if you read the links that appears to be what they are doing.

Here 'linemen' would not be allowed to do premise wiring work without having an electrical license.
 
iwire said:
Marc I am under the impression that the work is done by local electrical contractors paid for by the utility.
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Which isn't much different than Home Depot Installation Services, and that doesn't work out in the contractor's favor. I remain suspicious. I can see it as a good way for a small contractor to build a customer base, or for a large contractor to keep guys busy between bigger jobs without having to lay them off.
 
mdshunk said:
Which isn't much different than Home Depot Installation Services, and that doesn't work out in the contractor's favor.
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Having never run a business I will certainly take your word for it.:smile:

I figured the profit on the warranty work would be dismal but I thought the opportunity to get in so many doors could be good.
 
Would it be appropriate to add, that opportunity depends if the POCO is a member of a labor organization, where working agreements prohibit using unorganized subs or employees.
 
I'm not sure about what happens, but the intention is money. I think this is another way to squeeze the little guy, like home depot. So I better get on the house rewiring bid soon.

Hank
 
ramsy said:
Would it be appropriate to add, that opportunity depends if the POCO is a member of a labor organization, where working agreements prohibit using unorganized subs or employees.
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Not much point as we do not discuss union vs non-union issues here.
 
Installation services

Installation services

Marc ,
I been there with the home depot installation services, what a forest. They work out of a flat rate labor book in which anyone from the northern states cannot compete with.I tried working with them on a couple jobs , but kept coming up short trying to stick with there guidlines and cost. This might work for one man shops , but i passed on it.
 
ramsy said:
Would it be appropriate to add, that opportunity depends if the POCO is a member of a labor organization, where working agreements prohibit using unorganized subs or employees.
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Many states require person or entities operating as electrical "contractors" be licensed as such - which includes bonding, insurance, etc.
Who in the company(organized labor) will put their license on the line and for how much?
How much would they have to pay a non-employee to become an "employee"(organized labor) in order to use that license...and if that individual gets bent out of shape and yanks their license - then what?

Back in the 90's, when I worked for a railroad - they "polled" the men who were licensed EC's on who was willing to be the license holder for them. My first question: How much? Their reply....$150/year. Not a typo...no missing zeros...one-hundred-and-fifty-dollars. I laughed...but they did get someone for that pathetic price.
I don't know what the story is over there now....I'll long gone from that show.
 
Doing the math really quickly, with the assumption that a service call will cost them on avg $100. (that's what they will pay the contractor who does the work. Yes it's low, but I know they will squeeze the subs.)

And lets say 100,000 sign up. Thats ($3.5*100,000)*12=$4,200,000 /yr gross.

Since the avg residential customer needs service approx 1 time every 36 months, that means they should avg about 33,333 calls/yr

33,333*$100 = $3,333,300 /yr direct costs

or $866,700 gross profit.

After they pay all their overhead for administering the program, there is not much left.

If the avg service call costs them $150, they suddenly drop annual gross profit to (33,333 * $150) = $4,999,950

$4,200,000 - $4,999,950 = -$799,950 /yr

Connective tried it, and failed.

It's a difficult task. They will attempt it for a couple of years, screw up the market, then give it up. Or they will simply follow the lead of all the home warranty companies.
 
I agree that this needs to be nipped in the bud or it could lead to worse things. If it were to become successful, then it could spell big trouble in more ways than just loosing work. The price they could/would charge can really make a big difference in the future to make a reasonable profit.

This could be trouble with a Capital T
 
celtic said:
Many states require person or entities operating as electrical "contractors" be licensed as such - which includes bonding, insurance, etc.
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I believe the Captains of any Industry enjoy several compliance discounts.

I'm having visions of the POCO's "B" license registered to the corporation, with no individual attached. Just a central-support center that dispatches on-call techs with Nextel's for holding their hands.

Techs dispatched from a "B" license (General contractor) need not be bonded, insured, or certified, just an inside JW, or perhaps a part time, probationary, or temporary wouldn't require health or retirement benefits either. That might be an unfortunate trend for residential contractors.
 
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guy from MA that never actually works and has around 1 billion posts said:
Marc I am under the impression that the work is done by local electrical contractors paid for by the utility.
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Iwire is correct. The program calls for them to sub it out. Won't be long till they realize that they are not making money. So they will either raise the price, try to sell the customer more features, or not be able to find contractors willing to work for minimum wages.
 
Dominion was doing this on a commercial level a few years back for electrical preventative maintenance on switchboards and distribution, when I saw some of the companies on the list I said why bother.....Most were residential semi commercial contractors with NO BACK GROUND in EPM...
 
guy from MA that never actually works and has around 1 billion posts said:
Marc I am under the impression that the work is done by local electrical contractors paid for by the utility.
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:grin:

Well....I do have a lot of posts.

But I also hold a full time job working with the tools every day. :cool:
 
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