What customers should know about utilities’ unregulated businesses 

A recent customer complaint heard by the Minnesota Public Utilities Commission (PUC) sheds light on confusion customers may have around unregulated services offered by their utility.  

Businesses like CenterPoint’s HomeService Plus (HSP) and Xcel’s HomeServe offer appliance sales and warranty subscription services to customers. These offerings are separate from the gas and electric services provided by the utilities and are not regulated by the PUC. As a result, the consumer protections built into regulated utility operations do not apply. Customers should know that they are not required to participate in these programs. 

CUB is pushing for greater transparency and accountability to make sure customers fully understand the difference between their utility provider and the for-profit businesses their utilities operate. 

Regulated vs. Unregulated Businesses 

In Minnesota, a large portion of natural gas and electric utility service is provided to customers by investor-owned utilities, or IOUs. IOUs are private, for-profit corporations, such as Xcel and CenterPoint. Because of the monopoly-like nature of these utilities, they face little to no competition. In return for this exclusive market position, these utilities are heavily regulated and subject to oversight by the PUC. The PUC oversees IOUs’ pricing, service quality, and operational practices.  

However, utility companies sometimes also operate unregulated businesses under the same name. Since these unregulated business operations face competition, they are not subject to the same stringent regulations regarding pricing and service standards. There are no assurances that the prices or warranty coverage offered by businesses like HSP or HomeServe are competitive with other companies that provide similar services. 

CenterPoint HomeService Plus Complaint 

The PUC is currently reviewing a customer complaint regarding CenterPoint’s HSP operation. The customer reported that payments intended to pay down gas service charges were incorrectly applied to their account with CenterPoint’s HSP program, which contributed to the customer’s gas service being subsequently disconnected for non-payment. The customer also appeared to believe, incorrectly, that they were required to maintain an HSP plan. CUB is concerned that this customer complaint is indicative of broader misconceptions by the public surrounding CenterPoint, and other utilities’, unregulated business operations.  

The distinction between regulated utility services and unregulated, optional services must be more clearly communicated to customers, and charges must be more clearly delineated on bills. CUB has recommended clearer itemization and language that highlights customers’ rights, including that a utility cannot disconnect gas service for unpaid unregulated business charges (although late fees or other penalties may accrue). We are also recommending CenterPoint be required to add language to its website explaining the difference between regulated and unregulated services, and the utility’s policy around default payment allocation practices. Customers should understand they are not obligated to use CenterPoint’s HSP, nor are they provided preferential treatment for their regulated gas service for doing so. The PUC will likely hold a hearing on the matter and consider CUB’s recommendations in the next few months.   

Complaints 

The PUC does not regulate or oversee customer issues with the utilities’ unregulated businesses. However, if you are experiencing an issue with the unregulated business that impacts your gas or electric service, you can file a complaint with the PUC here.