Nov. 6--PSNC Energy, the Triangle's natural gas utility, is raising questions with its newest line of business: insuring water lines and sewer lines against damage.

Last month, PSNC mailed about 400,000 letters, urging homeowners to protect themselves financially against a plumbing emergency. The letters warn that maintaining sewer and water lines from the meter to the home is the property owner's responsibility and that fixes could cost up to $5,000.

Such repairs are typically up to the owner, but some are questioning the value of the plans and disapprove of the marketing approach.

Still, more than 2,500 people have signed up for the coverage plans, and the company hopes to enroll 10,000 people in the first year.

"The people who sign up see value in this," said PSNC spokeswoman Angie Townsend. "It's given them peace of mind."

The coverage costs $5.95 a month for the sewer line plan, $3.95 a month for the water line plan, and $1.75 a month to cover the expense of repaving driveways and sidewalks after the pipes are repaired.

Utilities have leveraged their brand names for years to generate extra business by selling coverage policies. Some plans are a logical extension of the utility's business and expertise. Progress Energy, for example, offers coverage for surge protection, home wiring, outdoor lights and water heaters.

Some utilities, however, offer a broader range of policies. Duke Energy has a water line protection plan for $2 a month in the Carolinas and has signed up 14,000 customers for that service. In Illinois, a natural gas company insures TVs and other electronics.

In North Carolina, protection plans marketed by the state's utilities are not regulated by the N.C. Utilities Commission. And one of the concerns with PSNC's latest endeavor is that its marketing letter doesn't make that clear enough, said Jeff Davis, the director of the Public Staff, the consumer protection arm for the Utilities Commission.

"I've actually had someone say, 'Maybe this is a bill,'" Davis said.

Jules Coco of Cary said he was put off by what he considers an alarmist tone in the PSNC letter he received.

"I though it was hyperbolistic fear-mongering," Coco said. "You create a fear, and then you sell people something to protect them from this fear, bogus or otherwise."

Like many insurance policies, PSNC's come with restrictions and exclusions.

Neither policy covers damage caused by problems that existed before the customer signed up. Also excluded is damage caused by negligence and natural disasters. Townsend said the policies cover clogs, normal wear and tear, and damage caused by tree roots.

Jamie Revels, the utilities director for the town of Cary, said that such problems do happen, even though utility system components are designed to last at least 50 years and PVC piping is virtually indestructible.

Mike Orsini, production manager at Roto Rooter Services in Raleigh, said that the high costs cited by PSNC are accurate when applied to system replacements but that repairs to a water line can be as little as $200.

Still, Orsini questioned the policy's usefulness. Common pipe malfunctions are caused by installing post holes over pipes, or driving a truck over an in-ground sewer connection, he said. Hurricanes topple trees and pull up underground pipes entangled in the roots.

"It doesn't sound like they cover much," he said. "There's some major exclusions, and it seems like the exclusions are what causes most of the problems."

john.murawski@newsobserver.com or 919-829-8932

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