PacifiCorp

[September 17th, 2003] What would you say if an insurance provider informed you that your policy was being terminated in 30 days? Probably something unprintable. Now, what if they added that replacement insurance just wasn't available?

This is the predicament 20,250 Oregon utility customers found themselves in last month when they learned that PacifiCorp 's Hassle Free Water Heater Guarantee program wasn't as guaranteed or free from hassles as they thought.

Since 1987, thousands of PacifiCorp customers have shelled out a modest monthly fee ($2.99 to $5.89) in exchange for a guarantee that the electric company would fix all water-heater problems within 24 hours. The popular program offered consumers an assurance that they wouldn't have to go an entire weekend without hot water or get scalded by huge repair bills.

When the program's underwriter--Wasatch Crest Mutual Insurance of Salt Lake City--was liquidated by the government because of insufficient assets, PacifiCorp pulled the plug on the program. Customers' previous payments? Vaporized.

"Consumers are being ripped off," says Bob Jenks, director of the Citizens' Utility Board of Oregon. "People were paying money to ensure that if their water heater breaks, they wouldn't have to pay for repairs, and now they will."

Bekki Witt, a spokeswoman for PacifiCorp, told WW that no other insurance company would underwrite the service at a similar cost and PacifiCorp couldn't carry on alone.

"PacifiCorp is a power company. We're not an insurance carrier. That's why we sought an underwriter in the first place," Witt says.

But Jenks says customers inked their deal with a state-regulated, rock-solid utility, not an obscure, penniless Utah company.

"When PacifiCorp put their name behind this, they ought to have ensured that this thing was stable," he says. "Customers ought to get what they're paying for."