You need a wire for the Y2 connection in order for the AC to work as a 2-stage system. I think the AC is currently either wired as a 1-stage set up, or it is using a timer on the furnace control board to go from the first to second stage. The thermostat is displaying the stage-2 symbol, but I don't think it means anything because there is nothing connected to Y2.

Are there any more available wires? Usually Y2 is the blue wire and the fan (G terminmial is a green wire). I speculate the installer did not want to run an additional wire and rigged it so it only works with the second stage.

That's all the wire there is, so everything you said is what I suspected, too. I paid an extra $1000 for the two stage AC, not getting much for that.

I need new wire pulled anyway, as I want a powered thermostat with battery backup, not just battery operated.

Thanks for the response.

I would like to think that you are already getting power through the Red wire.

You've only got 5 wires here. I would go for 7.

>>> I would like to think that you are already getting power through the Red wire.

I'm no expert, just only know what I've read in the various manuals, but yeah the Red is source/Hot from the transformer on the unit itself and it's purpose is to energize the other terminals/relays (like the blower, compressors-Y1/W1,etc ). This tstat unit (and others models I read through) require a C "common" hot terminal to be a secondary source wired (along with R) to actually power the tstat for things like backlight, humidifier, remote sensors, etc. Which is why I was bummed when I saw there was no C connected or another wire available, as I wanted the nightlight option.

Correct me if I'm wrong.

I stated it poorly. You get one side (+) of the transformer but not the other (-). 7 would be your minimum. But if you ever went to a multistage heatpump, you'ld need at least 1 more (for the reversing valve).