Local contractors cry foul over PSEG WorryFree startup

Independent contractors who install and service heating and air-conditioning equipment are crying foul over the entry last year of a competitor known as PSEG WorryFree, saying the apparent affiliation gives the company an unfair advantage in attracting customers.

PSEG WorryFree is the local brand of a company called HomeServe USA, which operates utility repair services across the country. It has an affiliation with PSEG’s New Jersey parent, but it is separate from PSEG Long Island, the companies said last year.

Long Island contractors say the company’s use of the PSEG orange-sunburst logo and its pricing have allowed it to take away as much as half their business for service contracts and seasonal service work.

“It’s totally unfair,” said Anthony Carbone, vice president of Systematic Control, a heating and air conditioning contractor in Great Neck.

The branding advantage, Carbone said, comes with a pricing advantage. PSEG WorryFree has been offering an annual service contract for under $200 that includes parts, he said, while local contractors charge from $125 to $160 just for the diagnostic visit. Parts are extra.

Last year, Carbone and a trade association called the Metropolitan Air Conditioning Contractors of New York filed a complaint with the Public Service Commission, charging PSEG and HomeService with “obvious and evident misleading practices” in promoting the brand on Long Island. MACC has posted a petition calling for an end to the “deception and unfair competition,” which has garnered 144 signatures of contractors and customers.

Jimmy Moyen, president of the group, said contractors in Nassau and Suffolk have collectively seen a drop of 30 percent to 40 percent in their residential service and maintenance agreement business since PSEG WorryFree entered the market.

“This has had a major impact,” he said, estimating that the new company may have garnered some 155,000 contracts in its first year.

In response to the PSC complaint, the state Department of Public Service, the administrative arm of the PSC, is “monitoring information distributed by PSEG HomeServe to ensure that it clearly states that PSEG Long Island consumers are not required to purchase the product and that this service is separate from PSEG Long Island,” said PSC spokesman James Denn. “Consumers are encouraged to research all available options before deciding whether to obtain such coverage or when selecting any electrical service line insurance or maintenance product company.”

Mike Giardina, manager of PSEG WorryFree on Long Island, said he was "aware of a handful of those complaints. We’ve formally responded to them."

Giardina, in written responses, noted that promotional materials from the company "specifically state that HomeServe is an independent company separate from PSEG Long Island" and all note that PSEG WorryFree is "operated by HomeServe."

As for Carbone's claim of prices being undercut, Giardina said, PSEG WorryFree "does not set HomeServe's pricing and cannot comment on it." 

PSEG Long Island has gone to lengths to say it and PSEG WorryFree are separate companies that do not share PSEG customer information to mail promotional brochures to customers across the region offering service for electric, gas and water utility equipment.

But Brandon Stone, owner and president of All-Weather Temperature Control in Copiague, said he’s concerned that the customer information he sends to PSEG to qualify his customers for rebates is shared. “PSEG has all my customer lists of every customer we do an installation for,” including equipment type, cost and rebate size.

The state Department of Public Service said PSEG Long Island “is not involved with the activities of HomeServe, and it does not share its customer’s information with HomeServe, PSEG Worry Free, or any third-party companies.”

And Giardina said PSEG Long Island "does not provide customer lists or other customer information either to PSEG WorryFree or to HomeServe USA." 

But it’s not just the loss of customers that is affecting local companies’ ability to survive against the larger, PSEG-branded company, contractors say.

Last year Stone said, he lost two of his most seasoned employees, including a manager, to PSEG WorryFree, which was able to pay his top service technician $5 more an hour. “They’re undercutting me on price, I’ve lost employees to them and it’s hard,” said Stone, who estimated his 2019 business was down 5 percent because of PSEG WorryFree’s entrance. “They have much deeper pockets.”

Giardina said PSEG WorryFree "does not recruit or hire employees to perform services," noting that repair services on Long Island are performed by HomeServe. "HomeServe has advised that it does not engage in the practice of recruiting employees from local contractors." 

Carbone challenged that claim, saying five employees were recruited away from his company, and three returned. 

In an attempt to compete, Carbone of Systematic said he sent out customer postcards last year announcing he was a PSEG WorryFree contractor, given that he participates in PSEG’s Cool Homes rebate program. He received a cease-and-decease letter from PSEG Energy Group demanding that he stop using the local and WorryFree name.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.