Westar Energy working with HomeServe to offer repair insurance plans

Electric meter on the side of a Wichita house. (Oct. 8, 2014)
Electric meter on the side of a Wichita house. (Oct. 8, 2014) File photo

That baby blue postcard you got in the mail from Westar Energy? It’s a solicitation from the utility and a wiring-warranty company, who have partnered to try to sell you insurance on your outside electric parts.

The card is the forerunner of a joint marketing venture of Westar and HomeServe USA Repair Management.

A Westar spokeswoman said the company teamed with the insurer to insulate consumers from potentially large repair bills and to increase customer satisfaction.

The state consumer counsel says there’s nothing illegal about Westar sharing its customer base with an outside seller, but it does raise some questions over privacy and who benefits from the deal.

For those who opt to buy in, the insurance would cost $4.99 a month and cover repairs from damage or wear and tear to the homeowner-owned parts of the electrical system on the outside of the house. Homeowners could insure their internal wiring for an additional $4.99 charge, said Myles Meehan, a spokesman for HomeServe.

Many electric consumers think their responsibility for maintenance and repairs ends at the electric meter.

Not so.

In Kansas, the meter itself is Westar’s to maintain, but the box that holds the meter is the customer’s problem. Homeowners also are responsible for the conduit and cable run to the weatherhead on the roof, where Westar’s wires connect to the homeowner’s wires.

For example: Let’s say a tree branch falls on the drop line between your house and the power pole – with Wichita’s weather, a fairly common occurrence.

The line probably wouldn’t break, because it’s a lot more likely that it would pull the weatherhead, conduit and maybe the meter box away from the house, which is a physically weaker part of the system.

The cost of repairing that could be as low as $200-$300 if the house is fairly new. But if it’s an older house with obsolete electrical parts, the whole system has to be upgraded to meet the current electrical code and repairs could run about $2,000.

Meehan said that in addition to catastrophic repairs, HomeServe’s plan would fix a slower-developing problem such as worn-out seals allowing water to get in and damage the outdoor parts of the power system. The plan also covers lines and connections to outdoor electrical uses such as pool heaters and yard lighting, he said.

Westar spokeswoman Gina Penzig said customers often don’t realize that they’re on the hook for those repair costs.

The HomeServe contract “gives them the option of having the peace of mind that it will be taken care of.”

Penzig said the program is completely optional and will be billed separately from Westar services.

David Springe, chief consumer counsel for the Citizens Utility Ratepayer Board, said he’d received HomeServe’s Westar postcard and checked it out to make sure it wasn’t a scam.

But he said he thinks there are some issues to be looked at.

One is the use of Westar customer data to sell a third-party product. While that’s not illegal, “to some degree, it’s bad form,” he said.

He said the introduction of “smart meters” will make a lot more information on customer usage available to utilities and that it would be a good idea to have a discussion now of what they are allowed to share with third-party partners.

“I don’t know whether we have an adequate level of control over what Westar can do with that data,” he said.

In addition, he said there’s a question of whether the revenue from programs like Westar’s partnership with HomeServe should go to shareholder profit, as it does now. “Shouldn’t we get some offset against rates?” he said.

Penzig said Westar sent the postcards itself and did not provide its customer data to HomeServe. She acknowledged that the company will get a share of the service contracts HomeServe sells, but said the company doesn’t expect that to be a large amount of money.

It’s not the first time that HomeServe has sought to break into the Wichita market.

The company raised some concerns last year when it mailed official-looking notices to residents seeking to sell water-line maintenance plans. The company wasn’t partnered with the cities, prompting Augusta to put out a scam warning on Twitter, which it later withdrew.

Meehan said Friday those issues had worked themselves out after the cities were informed that what the company was actually offering was an optional private insurance plan and that it is a reputable company.

Reach Dion Lefler at 316-268-6527 or dlefler@wichitaeagle.com.