manager, superintendent of service and installations, refrigerated air conditioning sales man, air conditioning installation foreman and others. I was never actually told that they would not give me an equipment price; however, after pursuing the issue for five (5) days and being referred to one person after another, leaving calls that did not get returned etc., it became evident that no price would be forthcoming. The end result being that I did not have any way to possibly submit a competitive bid on this heating and air conditioning job as specified. Yours truly, JAMES L. WILKS, THE SNELLING CO., St. Paul, Minn., March 11, 1968. (Attention: J. K. Harrington) TWIN CITIES SMARCA, Minneapolis, Minn. DEAR SIR: During the past year the Northern States Power Company, our local utility, has continually been more active in the installation, selling and service of various types of gas equipment. They are serving gas burners for a charge of $2.00. We are confident that this is considerably below their cost. They have also been active in selling gas air conditioners. They have spent considerable man hours and newspaper advertising and they have underwritten dealers' costs for buying air conditioning equipment. the In addition to this, they have been selling water heaters and incinerators below average price that dealers normally sell them at. We have complained to them about this, because we feel that it is their business to supply gas and electric and not the selling of equipment and servicing of it. Sincerely, Mr. J. K. HARRINGTON, HAROLD KRINKIE, President. MILL CITY HEATING & AIR CONDITIONING CO. Minneapolis, Minn., March 14, 1946. Executive Director, Twin Cities S.M.A.R.C.A. Minneapolis, Minn. DEAR SIR: We wish to register with you our grievance with having to compete with the Minneapolis Gas Company, the local Public Utility serving the area in which we are attempting to put a few dollars in our net profit column, In essence the above named Public Utility is in direct competition with our company, who is a licensed and bonded company engaging in sales and installation of Heating and Air Conditioning equipment. This competition is unfair to say the least and in fact should not be allowed. They are able to promote, finance, advertise and sell gas equipment with the assurance of a guaranteed annual net profit all at the expense of higher rates to the consumer and at the same time taking business away from dealers like ourselves. There are many things that should be aired and briefly here are a couple: 1. The so called "Free Service" policy to the consumer. Some of the statements made by Gas Company service personnel that come back to us from our customers are a good reason to leave the servicing of gas equipment to qualified Licenced dealer organizations. Our Service Department cannot compete with theirs of course for reasons that are obvious. 2. Discriminating practice of Direct Sales by Gas Company personnel with subsequent sub-contracting of installations thru their Select Dealers, who are also Our direct competition. In conclusion and summation it still boils down simply to unfair competition mainly, and anything that the contractors association can do to bridge this unequity would be appreciated. We feel that our investment over the years should be paying off to a greater extent and the above situation as outlined briefly is not helping matters to say the least. We welcome fair and equitable competition and are not at all awed by any of them. To stand against the Gas Company is another thing and I am sure the pressure of the Contractors Association in our behalf could be of great assistance if applied at the right level. Yours very truly, WM. H. STEVENSON President. BERNADETTE PLUMBING & HEATING CO., Albuquerque, N. Mex., March 14, 1968. ASSOCIATED MASTER PLUMBERS OF ALBUQUERQUE, Albuquerque, N. Mex. GENTLEMEN: We have had several occasions arise in which we found ourselves in direct competition with a utility company, and came out second best due to what we feel were unfair advantates exercised by them. The Southern Union Gas Co. is able to sell a job at considerably lower prices than we can, due to the fact that their profit is derived from the sale of gas and they are willing to install equipment at cost or below to promote the sale of gas. Several times I have been in conference with some of the minor officials of The Southern Union Gas Co. and they have insisted that it is their company aim and policy to increase gas sales by whatever means are available. They have seen fit to alienate dealers like myself by entering into direct competition with us even though we would be selling the same gas burning appliances, and they would benefit from gas sales regardless of who sold the job. My most recent encounter with them was a heater replacement and re-piping job that they under bid me by a large margin. Comparison revealed to me that their labor and/or material is sold at far below cost, apparently subsidizing it from the sale of gas. This is not an isolated case. It is more of a typical example and serves to exemplify the monopolistic activities exercised by The Southern Union Gas Co. My sincere belief is that, if they are franchised as a utility company whose profit is guaranteed by law, they should refrain from entering into competition with private enterprise that enjoys no such profit protection. By way of comparison look at The Public Service Co.'s activities in a parallel field. They advertise, promote and sell their appliances, services and installations through electrical contractors and dealers and enjoy a co-operative relationship in their industry. It stands to reason that when one department of an organization is losing money, it must be made up by the other departments. That is why our gas rates rise and the general public pays the difference. This does not serve the best interests of the public nor of private enterprise and I would like to see it cease. Sincerely, Re utilities competition. HUGO A. BErnadette, President. MILLER METAL Co., Albuquerque, N. Mex., March 15, 1968. NEW MEXICO SHEET METAL CONTRACTORS ASSOCIATION, GENTLEMEN: My most recent experience in attempting to compete with Southern Union Gas Co. of Albuquerque was on a proposed remodel for Executone of New Mexico at 111 Cornell Dr., SE. This system consisted of a complete heating and air-conditioning system for a suite of offices to be remodelled. I quoted on a combination roof-top system, gas fired heating and electric airconditioning and, of course, the Utility quoted a package unit. We were some 18 to 20% under the Utility's figure, however, we did not get the job. Mr. Pickett's explanation of his decision to accept the higher figure made two points. One was the tremendous savings in operating cost which the Utility had quoted him and Number two was the "Painless" method of payment by means of merely adding the monthly payments to the Gas Bill over a period of five years. This transaction took place in the latter part of 1967, however, I have this date reconfirmed with Mr. Pickett, the President of Executone, that the payment angle through the Utility was indeed the most enticing factor in accepting their quotation. I also confirmed that the interest rate the Utility charged was 5% Add-on interest. Thanking you for your endeavors toward resolving this problem, I remain, Sincerely yours, EDWARD M. MILLER. ED MILLER, CREST-HI PLUMBING AND HEATING CO., Albuquerque, N. Mex., March 7, 1968. President, Association Plumbing Contractors of Albuquerque, DEAR ED: Having lost another retail sale of a space heater last week to Southern Union Gas Co. it is my belief that our groups of contractors and retailers are going to be forced out of business if this practice continues. We cannot compete with a utility company who is guaranteed a profit by the Public Utilities Commission. In other words, we the taxpayer are financing their business and are forced to compete against our own money. The fact that they, Southern Union Gas, have a monopoly on all the gas sold also gives them a monopoly on all gas appliance sales because people just add it to their gas bills. Would it be possible to add this to the agenda for our next meeting. Sincerely, To Whom It May Concern: A. T. YANALAVAGE. SANDIA PLUMBING & HEATING CO., I strongly object to the monopoly run by Southern Union Gas Company. They own the gas pumping stations, gas scouring stations, also gas wells and the gas lines right up to the customer's meter, then they sell them their appliances. They also have repair trucks and pay their men less than we have to pay ours. This definitely gives them the advantage over the small contractors. I firmly believe they should be in the business of selling gas only and anything you can do to further this interest will be greatly appreciated. Very truly yours, JACK WASH. GOODRICH AIR CONDITIONING, Re Utilities installation of heating and air conditioning equipment. GENTLEMEN: We recall no specific occasions but over the years when we have inquired into the installation of specified gas air conditioning equipment we have found that Southern Union Gas Company buys and installs the equipment and all that is left for sheet metal contractors is the connecting ductwork. We feel that this is unfair competition from utilities as we are not allowed to buy and sell the air conditioning equipment and their arrangements for payments make it impossible for us to compete. Yours truly, H. N. BLUE, Owner. WAGNER PLUMBING Co., Albuquerque, N. Mex., March 15, 1968. ASSOCIATED PLUMBING CONTRACTORS OF ALBUQUERQUE, DEAR SIRS: For a number of years there has existed an unfair situation in Albuquerque caused by Southern Union Gas Company, and this unfairness creates hardships on small business people in the Plumbing, Heating, and Cooling industry. I feel that Southern Union's primary and only business should be the selling and distribution of natural gas. The unfair part is their selling and installing of appliances and piping systems in competition with plumbing contractors. I feel they can sell below cost and make up the difference on the natural gas they sell. In addition, they add an extra dollar or two to the gas bills and call it financing. Their monopoly on gas is enough for them. Applicances and piping should be handled by stores or contractors. Sincerely, VICTOR J. WAGNER, -SEASON SALE SEPT. 5 to 29 IN ALBUQUERQUE WILL BE REDUCED. HERE ARE 5 MORE REASONS LONGER. Because 4. FILTERS THE AIR. You and ing parts in the cooling cycle. cle is about 90% of the whole 's practically no friction any. LOSES COOLING like the other kind, gas air ntains constant efficiency. h cooling after 10 years as it GAS COMPANY'S' . Gas company specialists onditioning to fit your home. mpany remains a permanent ys ready to answer your call. your family will feel better and live better, be- 5. ADD PAYMENTS TO MAKE SURE WE DON'T MISS YOU. If you want the job done right...do it with gas. Mr. DINGELL. Mr. Paquette, if you will stand and raise your right hand. It will be necessary to swear you in. Do you solemnly swear that the testimony you are about to give today will be the whole truth, and nothing but the truth? Mr. PAQUETTE. I do. Mr. DINGELL. Mr. Paquette, you are now a witness under oath. Do you desire to have counsel present at the witness table with you? Mr. PAQUETTE. I have carried on this fight for a number of years, sir, and I was never able to afford a legal counsel or high-priced attorneys, or high-priced accountants. But I have managed to find out a number of irregular practices on the parts of utilities. Mr. DINGELL. Then you do not desire to have counsel at the table. Because you are under subpena, the Chair felt it desirable to ask you that question. Very well, Mr. Paquette, the Chair is pleased to recognize you for such statement as you choose to give. If you will give us your full name and address. TESTIMONY OF JOSEPH PAQUETTE, EAST HARTFORD, CONN.1 Mr. PAQUETTE. I am Joseph L. C. Paquette. I reside at 7 Daniel Street, East Hartford, Conn. I wish to thank the chairman and the committee for inviting me to appear before this committee. I hope that I can offer a contribution toward its effort to uncover and make public the many unsavory practices that are being practiced by utilities and are going unchallenged. I am one of the plumbers that an association was referring to last week. By that I refer to a statement entered into the record that the utilities were actually driving small businessmen out of business. I feel that I have been driven out of the plumbing and heating business, and the financial repurcussions from which I may never recover. I have in my possession facts that prove that the utilities completely control the plumbing and heating business and can determine who shall survive and who shall fail. In 1959, I installed 48 gas-fired heating systems, 25 gas-fired water heaters. In addition to this, I installed for the Hartford Gas Co. 10 gas dryers and 33 pieces of spaceheating equipment. In 1964, I installed 34 gas-fired heating systems, and 10 gas-fired water heaters. This is about the time that the utilities went into the rental of water heater market. In 1964, I installed for the Hartford Electric Light Co. 106 electric water heaters on a rental basis. In the years 1965, 1966, and 1967, business in this category dropped off to the point that keeping records for this type of business is almost impossible, as I just did not have any. I have with me all the necessary building permits to document these installations. Mr. DINGELL. Do you desire to have counsel scrutinize those for appropriateness in inserting them in the record? Mr. PAQUETTE. Yes. Mr. DINGELL. Without objection, counsel will review those for appropriateness in inserting in the record. Mr. PAQUETTE. I tried in the industrial market-I tried to go into the plumbing and heating business in the industrial phase of the business, only to find that the utilities were getting there before me. I also found that utilities managed to tip off manufacturers so that the manufacturers would get to the industry before I did, and sell their product direct, so the only thing I had to offer was my labor. If that was not bad enough, I found that this factory who was supply 1See p. 266 for Hartford Electric Light Co. rebuttal to Mr. Paquette's testimony. |