Replacing Your Federal Pacific Panel: Is it Really Necessary?

If your home was built before the 1990s, you may have been told that you have a hidden danger that you didn’t even realize: your electrical panel. If the electrical panel you have installed in your home is one that was made by Federal Pacific Electric Company, you may have been told that your home – and even your life – is at risk. But what caused this controversy to occur and are you and your home really at risk?

Much of the controversy surrounding Federal Pacific panels stems from a class action suit filed in New Jersey in 2002. This suit ultimately found the company to be guilty of fraud, with the court ruling stating that the company “knowingly and purposefully distributed circuit breakers which were not tested to meet UL standards.” Due to these fraudulent testing practices, many electrical experts and some insurance agents maintain that Federal Pacific electric panels have numerous faults that put homeowners and their property in significant danger.

On the other hand, the Consumer Product Safety Commission launched a two-year investigation in 1983 in order to review the breaker panels and determine if they cause an actual risk. Ultimately, the case was closed by the Commission without making a determination. So, are you and your home really at risk, or is this simply a situation that has been blown out of proportion in an effort to scare consumers into unnecessarily replacing their electric panels? To help make that determination for yourself, it is helpful to review additional background information about these panels.

What is the Federal Pacific Company?

Federal Pacific Electric Company, also referred to as simply “FPE,” was a company that specialized in making circuit breakers. Some of these circuit breakers were also sold under the name of Stab-Lok. The electrical panels made by the company were extremely popular from the 1950s through until the 1990s, resulting in their installation in millions of homes throughout the country. The company eventually went bankrupt in 1979 for reasons that are unrelated to the panel controversy. It was then absorbed at by a company known as Reliance Electric.

It should be noted that the Federal Pacific Electric Company that was responsible for making the controversial panels is different from the Federal Pacific company, which is currently still in business. A division of Electro-Mechanical, the still-existent Federal Pacific is an American-owned company that manufactures a variety of products used to generate and transmit electricity. The company does not, however, manufacture or sell panel boxes, circuit breakers or other related products.

What Was the Basis of the Federal Pacific Lawsuit?

A class-action lawsuit against Federal Pacific Electric/Reliance Electric Company was filed with the Superior Court of New Jersey in 2002. Filed in Middlesex County under Docket# L-2904-97, the lawsuit accused Federal Pacific Electric of engaging in fraudulent testing practices when testing its circuit breaker panels between the years of 1965 and 1980. More specifically, the lawsuit alleged that the company issued Underwriter’s Laboratory (UL) labels to their electrical panels despite knowing they did not meet the proper testing requirements or standards.

According to National Electric Code, all products such as electrical panels must be tested and labeled by an independent testing agency. In order to pass these required tests, the lawsuit alleged that Federal Pacific Electric used a mechanical switch to turn off the breaker during the testing process. Several independent companies later went on to test the Federal Pacific Stab-Lok circuit breaker between the 1970s and early 1980s and confirmed that the breakers actually failed the tests. As such, the researchers concluded that the breakers pose a very real danger to homeowners.

Three years after the New Jersey class action suit was filed, the New Jersey courts did find in favor of the plaintiffs. As a part of this ruling, the court determined that New Jersey homeowners who were the original owners of FPE Stab-Lok electrical panels could receive a $500 settlement. Institutional class members were awarded varying amounts depending on their installations. To be eligible to pursue the claim, the circuit breaker had to have been manufactured and sold between June 29, 1971 and July 1, 1980. Therefore, only a very limited number of people received any sort of financial relief from Federal Pacific’s fraudulent activities. Since this lawsuit was filed only on the behalf of New Jersey homeowners and because all of these homeowners did not cash in on the class action lawsuit, millions of these electrical panels are still found in homes today.

What are the Potential Risks of Keeping My Federal Pacific Electrical Panel in Place?

According to some independent studies, keeping a Federal Pacific panel installed in your home may pose a number of serious threats. For instance, some researchers found that 51 percent of the breakers fail to trip when tested. By staying “stuck” on or jamming, the breakers may pose a fire risk that can lead to property loss or even death. In one peer reviewed paper written by Jesse Arontein and Richard Lowry in 2012, the researchers found that the breakers may be responsible for up to 2800 fires and 13 deaths every year, resulting in $40 million in property damage.

Due to the controversy surrounding these electrical panels, some insurance companies may also refuse to insure homes where they are installed. In addition, if you plan to put your home on the market and it still has one of these breaker boxes installed, it may be noted by the home inspector in the findings report. As a result, this may result in a slow down of the closing process of the home.

Do I Need to Replace My Federal Pacific Electrical Panel?

Whether or not you need to replace your Federal Pacific breaker is a decision that you need to make after consulting with your insurance company, a trusted electrician and, if you plan to put your home on the market, your real estate agent. After all, Federal Pacific panel boxes still exist in millions of homes and have managed to properly function in those homes for decades. Similarly, in the area where you live, having a Federal Pacific panel in your home may not create any issues in terms of obtaining insurance or passing a home inspection. Consulting with various professionals will help you to better determine if changing the panel is a worthwhile investment for you and your home.

If you do decide to change your electrical panel, it is also important to note that only specific boxes are affected by the controversy. If you know your breaker box was installed before the 1990s, there is a good chance that it is one of the controversial Federal Pacific breakers. To confirm if your electrical panel is one that is affected, you need to simply look on the breaker box to see if there is a label that reads “FPE,” “Stab-Lok” or “Federal Pacific Electric Company”. A licensed contractor will then be able to help you determine which replacement box to use and how much it should cost. Generally speaking, you should expect replacement costs to be around $1500.

Ultimately, the decision whether or not to replace your breaker box is one that only you can make. By examining all of the facts and weighing your options, you will be able to make the decision that makes the most sense for you.