Utilities Sue Thermostat Company

Pair of Kentucky utilities is suing the maker of an energy-saving thermostat, saying the devices pose a fire hazard and the company wouldn't help replace them.

LOUISVILLE, Ky. (AP) -- A pair of Kentucky utility companies is suing the maker of an energy-saving thermostat, saying the devices pose a fire hazard and the company wouldn't help replace them.

LG&E Co. and Kentucky Utilities Co., which are owned by the same parent company, and East Kentucky Power Cooperative installed at least 21,000 of the thermostats in homes and businesses around the state before getting notice that a similar device had been recalled because of the fire hazard.

Comverge Inc. in July recalled similar thermostats sold in Texas after the device caught fire there. The Kentucky utilities say they weren't immediately notified of that recall and that they were assured the recalled items were different from LG&E and East Kentucky Power's thermostats.

The utilities are seeking unspecified damages from Comverge, a Norcross, Ga.-company, that makes and markets the devices to energy providers.

East Kentucky Power sued Comverge in federal court in Lexington on Monday. LG&E and Kentucky Utilities sued Comverge last month in federal court in Louisville.

A message left for a Comverge spokesman was not immediately returned Tuesday. East Kentucky Power spokesman Nick Comer said the suit speaks for itself

At issue are thermostats designed to help utility companies control energy loads of customers on a volunteer basis by shutting down air conditioning during peak energy demand times.

The devices have been used by LG&E and East Kentucky Power Cooperative, which employs the thermostats as part of the Demand Side Management and SimpleSaver programs, respectively.

LG&E and Kentucky Utilities, which are owned by Pennsylvania-based PPL Corp., bought 25,000 thermostats from 2005 through 2009 and installed 14,000.

"We've removed 90 percent of those," said LG&E spokeswoman Chris Whelan.

Whelan said removing the thermostats cost about $2 million, with more costs likely.

A thermostat at an LG&E customer's home caught fire in November 2009, damaging the area immediately around the device.

Whelan said LG&E never conclusively determined that the thermostat started the fire because of other components around the device.

"It was the trigger point, though," Whelan said.

LG&E pulled 12,000 thermostats from the homes of customers after the fire.

East Kentucky Power bought 7,500 thermostats for the SimpleSaver program in 2008 and 2009 and installed about 3,000 of them by the end of 2009.

After finding out about the fire at the LG&E customer's home, East Kentucky Power examined some of the Comverge thermostats taken from customers for various reasons and noted damage, including damage that may have been caused by heat.

East Kentucky Power, the utility provider for about a half-million homes and businesses in 87 Kentucky counties, started removing the thermostats used in the SimpleSaver program from customers in January.

Comverge recalled similar thermostats in Texas in June after 13 reports that the device overheated and damaged the thermostat, with two causing smoke damage to a wall.

The federal Consumer Product Safety Commission in September began a probe of two other models of thermostat sold by Comverge over concern that the batteries inside the device overheat. The Kentucky companies said they were never notified of the second probe and learned of the risk after a customer complaint.

Both utility companies alleged that Comverge declined to take the thermostats back or cover the cost of replacing them for customers.

More in Operations