Jeff Gelles: Cautionary tale on PGW service plan

Without access to a forensic engineer and, let's face it, a time machine, it's impossible to tease out every detail in the frustrating fight pitting Barbara Torode and James Smart against the Philadelphia Gas Works. It began last summer, when the utility refused to pay for nearly $1,000 in repairs under their PGW Parts and Labor Plan. It still rankles today.

But this much is clear: Their dispute could serve as Exhibit No. 1 in the case against service contracts, those insurance-like deals that are supposed to buy peace of mind but instead often yield a great big headache.

How big a headache? By their account, the Mount Airy couple have paid nearly $1,000 to a contractor to do repairs PGW mistakenly denied and to fix wiring its technician left awry. They've also spent dozens of hours seeking help from the Pennsylvania Public Utility Commission and Attorney General's Office - an indirect cost to Torode, a graphic artist, and Smart, a retired writer and former columnist at the Bulletin.

Along the way, they've repeatedly run into brick walls - and some misinformation.

For example, they say a PUC staffer told them that the agency couldn't consider their complaint because it involved a third-party service-plan provider. But as Torode eventually learned, PGW manages the plan on its own.

The PUC's Denise McCracken says the agency's role is limited, though for different reasons. It could in theory consider a formal complaint, but it can't informally mediate fights over service plans - as it does in other disputes - because it doesn't mandate them.

Another miscue occurred when an attorney general's investigator, after concluding that the parties were at an impasse, said the couple could file a small-claims case. But when Torode called Municipal Court, she was told it couldn't take a case against the city-owned utility.

Not so. Court officials say SEPTA and state agencies are immune from small-claims filings, but not the Gas Works.

Is this a court-worthy dispute? Here are the few clear facts I've been able to glean:

For years, Smart and Torode have been paying for a PGW plan on their combined heating and air-conditioning system. Last year, it cost them $232.

In most of the last few years, PGW has had to recharge the system with two pounds of R-22, the ozone-depleting coolant that is being phased out. But this year, a PGW tech told them the system wouldn't hold the charge. Since the plan excludes leaks, he told them to call a contractor.

Torode says the contractor they called, Matt Mazza, found no leak. Instead, he told them that their system needed a new circuit board, and that they should call PGW back to do the repair, since it would be covered by their plan.

This is where things get into what PGW's Barry O'Sullivan calls "a classic he-said, she-said" story.

Torode says the next PGW tech refused to look at the system "because a private contractor had touched it." O'Sullivan says the second technician refused to service the unit because it had been running when PGW left it previously - albeit not cooling - and now wasn't operating at all.

What about PGW's statement, in a letter to the Attorney General's Office that described the second visit, that the air conditioner "was in working order at that time"?

"That's a typo," O'Sullivan told me, after investigating. "It should have said 'not in working order.' "

O'Sullivan says the annual recharges - explicitly covered by PGW - were evidence of a slow leak. If so, Torode responds, why has the system worked fine since they paid to replace the circuit board - just one of many points on which she and PGW disagree?

As I warned, it's impossible to unpack this dispute without a time machine. But the bigger picture is worth considering.

Companies offer service plans because they're profitable - PGW's took in $6.4 million in revenue last year. O'Sullivan couldn't tell me PGW's net return, but the economics are clear. A provider has to perform well enough to maintain its reputation. But it's money in the bank every time it can sidestep a close claim.

Torode says she likes service plans because she hopes to get better, faster service if she signs up - conceding she may be naive as she recalls a week's wait for furnace work in freezing weather.

O'Sullivan says PGW might still pay the claim, if the couple can provide better documentation.

But in the long run, they'd be better off skipping the plan and saving their money for repairs - or for a new system that would save power and spare the ozone.