Let's try to keep these two confusing things separate.

There is the Permeter Alarm which is supposed to go off when someone breaks into your vehicle. This is standard 2005-06 and it does work. It does not involve the use of your key chip.

There is the Passive Anti-Theft System or PATS. It was thought to be standard in both 2005-06 models but according to Ford they have not been able to make the RFID Key chips work with the interference from the AC/DC Converter in 2005. They maintain it will take a substantial software and hardware refit. We, the owners, maintain that we should have a refit as soon as possible because we thought we were buying a PATS in 2005. We do know that it does work in the 2006 and there is a blinking light. The downside for the 05 is that any key ($1.49 from a hardware store) can get you into the FEH and start it and drive away. And there are still some dealers selling chip keys (that are unusable) for over $100.

Further confusing, apparently there are some dealers who have installed their own security system in the 2005 models on lots and they may have a blinking light. These are after market solutions that the dealer should disclose, and may make you pay extra for, and may or may not be under warranty, and may or may not interfere with the operation of the hybrids's other systems.

Hope this helps.

Mike Maline - Sdctcher
2005 Ford Escape Hybrid Owner
California School Teacher