Plumbers respond to customers’ pricing questions after winter storm

Travis County

Editor’s note: This updated story includes additional information KXAN obtained in the week following the original report, including new details from the management of Mustang Plumbing in response to claims made in the story.

TRAVIS COUNTY, Texas (KXAN) — Kristie Nelson of Dripping Springs found out her tankless water heater was no match for the winter weather in Central Texas last month.

After freezing temperatures caused damage, she consulted Mustang Plumbing about repairing her tankless water heater because the company handled the plumbing during construction of her home.

Nelson said a representative for the company quoted her by phone $400 an hour to do the job. She told the representative she was concerned about what she believed was a high price. The calltaker explained the homeowner would have to wait a couple of weeks if she wanted Mustang’s usual rate of $195 for the first hour, and $150 for every hour thereafter, according to Nelson.

Nelson is one of five people who reached out to KXAN with questions about their plumbing prices in the aftermath of Winter Storm Uri. Their needed repairs varied from pipe breaks to tankless water heater problems and water filtration system issues. The Texas Attorney General’s Office and the Travis County Attorney encouraged the public to file complaints if consumers believed they encountered price gouging.

Nelson filed a complaint with the Texas Attorney General’s Office, and sent the AG’s confirmation letter to KXAN.

Kristi Nelson filed a complaint with the Texas Attorney General's Office (Courtesy Kristi Nelson)
Kristi Nelson filed a complaint with the Texas Attorney General’s Office (Courtesy Kristi Nelson)

“We will review the information that you have provided, and will contact you if we need additional
information,” reads the Feb. 26 communication from the AG’s office. “Otherwise, you will not receive further communication from this office regarding your complaint.”

The letter adds that the AG’s office does not represent individuals on personal civil matters, and cannot take direct action on every complaint.

Nelson said she and her husband ultimately decided not to use a plumber, but rather ordered parts for the fix and would attempt to make the water heater repairs themselves.

When KXAN contacted Mustang Plumbing twice for a response to concerns Nelson raised, an employee said managers were too busy to talk, but the employee answered questions instead. The employee told KXAN that their prices were higher in that timeframe because they were using two-person crews. The employee said it was for safety reasons, and to prevent injury or burnout at a time the company was getting hundreds of calls. The employee added, “only this weekend” was their price as high as $400 an hour.

After the story was published, Mustang Plumbing managers reached out to KXAN.

“Mustang Plumbing believes the story associating our company with price gouging was void of necessary context to paint an accurate picture of our pricing and the situation. The facts show that our pricing was fair and on the very low end. We performed a service, to our detriment, to help out those in need during a difficult time, and we believe the story that ran was not a fair representation of the truth,” a statement from Mustang management said.

“We told our customers up front over the phone what the rates would be. We were running two-man crew emergency rates for Friday and through the weekend,” wrote Todd Cox, president of Mustang Plumbing, in a letter to KXAN responding to the original report. “Safety is paramount in responding to emergencies, and two men were essential to run calls,” he added.

The company told KXAN its employees had multiple falls, including one plumber breaking his ankle after slipping on ice. In addition, Mustang says the two-man crews were more efficient and allowed employees to take turns driving and recouping between jobs.

Costs for repairs

Mustang Plumbing said between Friday, Feb. 19 and Sunday Feb. 21 it charged $400 an hour, which is in line with its “historical weekend/emergency rates” for two-man crews. On weekdays the following week, Mustang said it charged $270 an hour, which is in line with its “historical weekday/8am-5pm rates” for two-man crews.

Mustang said its average repair for a burst or leaking pipe took roughly an hour, with an average charge of $438.

“Our pricing was inclusive, we did not have hidden charges such as drive time, parts, and equipment charges,” Cox wrote.

The company said its customers’ overall bill for repairs during this timeframe was lower than normal because, in most cases, it did not charge customers for materials, except for water heaters. It believes its rates were at the bottom end of the range compared to prices it found on industry websites such as fixr.com, homeguide.com and thumbtack.com.

“Plumbers should be held accountable for price gouging practices, especially during catastrophes. The reality is that Mustang Plumbing lost money related to work performed in relation to the icy storm,” the Mustang statement explained.

Mustang told KXAN its primary business is plumbing in residential new construction. It has a service team that focuses on warranty work for its new construction homes and performs some service work. The company temporarily transitioned its focus to address plumbing repair needs after the February winter storm. Mustang says that change caused its overhead costs to run high.

It doubled its call center team using other office personnel, putting core business work on hold internally, according to the company’s statement.

“We felt an ethical and moral responsibility to come to the aid of our community when they needed us the most. Along with a large company comes a massive number of available plumbers and apprentices that could be mobilized in this emergency. We did not take our responsibility to share our portion of the load lightly,” Cox wrote to KXAN.

Two other plumbing companies in Austin said they use flat rates rather than hourly rates, and they did not raise rates for repairs from the February winter storm.

Mike Marugo, Plumbing Service Manager with ABC Home & Commercial Services, said his company uses a flat rate.

“I totally understand that there are companies out there that can, and quite frankly have the right to, charge overtime fees and after-hours fees and things like that. That has always been part of the business. Even here at ABC, pre-storm we have after-hours fees and overtime fees. We have decided to waive those for storm damage,” Marugo said. “To the point of, how much does something (repair) cost? It is really difficult to put a number on most things until you lay eyes on it.”

Marugo said all the storm damage repair work will have regular, daytime rates, and that pricing will continue “until we get through the storm damage,” Marugo said.

ABC Home & Commercial said it would not be able to give specific price ranges on common storm damage repairs because there are so many variables.

“We are constantly inundated with folks who say, ‘Well, I just want to know over the phone what you think it could cost,” Marugo said. “Unfortunately, there are so many different scenarios.”

For example, a plumber could arrive at a house for a repair and find unforeseen code or safety issues that require attention. Repair prices can also fluctuate with the types of materials, location in the house, age of the house, extent of damage and level of access.

“It sounds silly, and sort of cliché, but good work isn’t cheap and cheap work isn’t good,” Marugo said.

Austin-based Reliant Plumbing also said it could not provide specific estimates for certain repairs, with so many different potentially unforeseen problems.

“Each home is built differently and could have been plumbed differently depending on the year and code the home was built under. Our plumbers are going out to properties and providing estimates on the exact issues the customers are having. We provide no hidden fee estimates, and it is for each homeowner’s specific issue,” a Reliant spokesperson said in an email.

Reliant said it does not use hourly rates.

“We price jobs according to the scope of work needed to complete it,” Reliant said. “We did not raise our pricing we actually lowered our service/diagnostic fee to try to help our customers.”

Price gouging complaints

KXAN asked the Travis County Attorney’s Office and the Office of the Attorney General for any information on plumbing-related price gouging complaints.

The Travis County Attorney’s Office said it has “received zero substantiated complaints about price gouging specific to plumbing services,” according to an email from county spokesperson Hector Nieto. “There was the one complaint from Williamson County about the price of installation of tankless water heaters, but we have not been able to receive any specific information from the complainant,” Nieto added.

Statewide, the Attorney General’s Office said it has received over 2,000 price gouging complaints from Feb. 12-26. It is not clear if any of those complaints are related to plumbing services.

KXAN has formally requested a record of all the complaints from the Attorney General’s Office spanning the week of, and following, the winter storm. That record should include dates and subjects of the complaints.

The Attorney General’s Office has more information on price gouging, which can be found here. You can file a price gouging complaint here. The Attorney General notes on its website that high prices do not necessarily indicate price gouging.

“Please note that high prices alone do not mean that price gouging has taken place, as businesses are generally allowed to determine the prices for their products.  However, if a disaster has been declared by the Governor of Texas or the President, and businesses raise the price of their products to exorbitant or excessive rates to take advantage of the disaster declaration, then it is quite likely that price gouging is taking place, and you should file a complaint with our office concerning the incident,” according to the Attorney General’s Office.

The Texas Deceptive Trade Practices-Consumer Protection Act says it is a false, misleading or deceptive to take advantage of a disaster by “selling or leasing fuel, food, medicine, lodging, building materials, construction tools, or another necessity at an exorbitant or excessive price,” or simply demanding these prices.

While plumbing isn’t specifically mentioned under the Texas statutes, the language includes a qualifier that applies to “any necessity.”

“I do believe that in this instance we’re in right now, plumbing services would absolutely be a necessity,” said Travis County Attorney Delia Garza.

Garza says her staff has looked back at previous cases but couldn’t find the precedent for what constitutes an exorbitant or excessive plumbing cost. She says ultimately, any complaint will be reviewed on a case-by-case basis.

“Unfortunately, the law is not very clear about what an exorbitant cost is,” she said. “It’s a very vague legal test right now that we haven’t been able to, essentially, test.”

Garza said there will be an emphasis on education over enforcement, adding that her office would send out cease-and-desist letters, informing businesses their activity could be illegal. If all else fails, the County Attorney’s office has the power to file lawsuits or injunctions against businesses.

A price gouger could be hit with a civil penalty of $10,000 per violation and up to $250,000 if the consumers are elderly, according to the Attorney General’s Office.

Copyright 2021 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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