Residents Call MLGW Policy Unfair

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(Memphis) "Tuesday, August 14th, I was sitting here in my office working and I heard sizzling and popping."  Then, Willie Brooks-Howze says everything went black.

"I just grabbed my keys and I was leaving the house 'cause I don't know what to think.  I didn't know whether my house was on fire, whether I had an explosion," says Howze.

A transformer had blown, the one sitting underground, in front of Howze's home and running power to it. The entire neighborhood was in the dark for roughly seven hours, but when the power came back on, several other things didn't.

"I checked my fuse box and everything came back on except my television sets," Howze explains.  Little did Howze know, her neighbor was having the same problem.

"My daughter tried to turn on her television, and no response, we tried the television in the living room, no response," says Dorris Harris. Harris also lost an XBOX and DVD player.  Both women filed claims with MLGW to have the electronics replaced, and in each case they were denied.

"When he called me back, he told me they weren't liable," says Howze.

"MLG&W is not legally authorized under the Government Tort Liability Act to pay claims for the unexpected, unforseen, unpredictable failure to equipment," read Harris from the letter sent to her by MLGW.

Simply put, "not responsible," exclaims Harris! She says going through her insurance would be costly because of a $1,000 deductible.

Cheryl Patterson is Vice President of General Counsel for MLGW. She says in order for the company to pay out, there would have to be negligence or prior knowledge that their equipment would fail.
"Sometimes equipment just fails, we had not been doing any work in the area and had no reason to think there would be a problem with this transformer so that claim was denied," Patterson explained.

So, besides a problem, how would MLGW have prior knowledge? We asked, and the company doesn't routinely inspect residential transformers. They say it's not a common, industry practice.

Workers do check substation transformers, but with more than 100,000 of the smaller ones running power directly to homes, they say it's simply a manpower issue, plus,  "It's a little bit difficult even if you do scheduled maintenance, it's not necessarily so that you would know in advance that something was gonna go out," Patterson adds.

In addition, Patterson says customers, would pay the price in the form of higher bills if MLGW paid for claims in which they weren't negligent.
An answer that isn't stopping these Raleigh residents from fighting back.

"So who is liable, same thing they say, same thing is our back up, we don't know when the transformer's gonna blow, otherwise, we'd turn everything off," Harris says.

We took the concerns to Councilman Kemp Conrad who sits on the City Council's MLGW committee. He says it's an issue worth looking into.

"If people are paying for power and things are happening that are causing our rate payers to have to go replace equipment, it seems like we should be checking those transformers," says Conrad.

Howze says it all boils down to accountability. "It doesn't matter whether you're a big corporation or you're one person, if you do something wrong, if it's your fault, it's your responsibility to fix it."

Customers who've had claims denied can appeal. Ms. Howze has already had a hearing and the decision to deny the claim was upheld. 

MLGW says while they get around 5,000 claims filed per year, it's actually  rare for customers to have power surges and subsequent damage.  Of course it's always a good idea to use a surge protector, but MLGW says there's no way to know if it would have prevented damage in these particular cases.