Oklahoma Gas and Electric's insurance offer jolts customers in the midst of dealing with ice storm damages

Nov. 12--Oops.

Officials said Thursday a well-intentioned program being introduced by Oklahoma Gas and Electric Co. intended to help insulate customers from unanticipated storm-related damage costs involving electrical service hardware on homes and businesses could have been better timed.

Mailers offering coverage on costs to make repairs to those systems began going out earlier this month as the utility was in the throes of dealing with what likely will be the most expensive storm to it and its ratepayers in the company's 120-year history.

The mailer, topped with an OG&E letterhead, reminds customers that a utility isn't responsible for electrical service hardware mounted on a home or commercial building that connects a utility service drop line to the structure's electrical distribution system inside.

The electrical service hardware -- consisting of a weatherhead, insulator, riser, meter base and service entrance conductor -- are owned by a property owner, not the utility.

When any portion of the equipment is damaged (as often happens during an ice storm when a line is pulled down by a broken pole or a felled tree), it must be repaired before the utility can restore service to a customer's home or business.

The problem is, while costs to make those repairs is expensive, they usually aren't large enough to even exceed a typical insurance policy's deductible.

The coverage, offered through a monthly $5.99 premium through HomeServe USA Repair Management Corp., guarantees coverage on repairs costing up to $5,000 annually to each customer who chooses to participate.

Participants can receive multiple service calls annually, can report damages to a 24-hour repair hotline, are eligible for priority repair status that is done by local, licensed and insured contractors and the policy guarantees that work for a year.

The national average costs for replacing a weatherhead and a meter base are about $196 and $450, respectively, it explains.

Brian Alford, a spokesman for OG&E, confirmed Thursday the offering is legitimate and offered by HomeServe to customers of many other utilities across the nation. The utility will get less than $1 monthly for each policy executed by a customer.

Past ice storms, especially one that hit central Oklahoma in December of 2007, left many of the utility's customers with damaged electrical service hardware that they had a hard time getting repaired because of uncovered costs and high demands for services, he noted.

"Because we had seen those kinds of issues in the past, we began exploring if there might be something out there that our customers could be offered that could help them in that type of situation, going forward," Alford said.

The spokesman said the utility intended to introduce the program to its customers using various types of social and professional media sources, in addition to the mailers.

While nearly all of those plans were shelved when the ice storm happened at the end of October, the mail campaign moved forward, with customers beginning to receive their letters earlier this week.

Since the storm started at the end of October, the utility has made restorations involving 750,000 customers. Peak outages on its system at any one time reached about 450,000 customers during the event.

On Thursday, Alford said several thousand customers remained without power, given the fact their electrical service systems had been damaged and need repairs before the utility could restore power.

"We have gotten some reaction from customers who have received solicitations from HomeServe USA already, usually asking whether or not the deal is some kind of scam. While many of our customers have asked for this type of service (because of past storms), the timing of this in relation to this particular storm was unfortunate," Alford said. "With all of the activity we had going on, it fell off the radar screen."

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