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Customer Focus: Price or Service?

Fortnightly Magazine - June 1 1995

Donald Pardus

Chairman & CEO

Eastern Utilities Associates

Eastern Utilities is committed to creating a company and a culture that goes beyond just delivering electricity. Our primary goal is to compete not just on price but on the value of the total service provided. Customers are the driving force in any competitive marketplace, and our commitment to our present and future customers is to deliver services that the customer values and needs.

To emphasize our commitment to our customers, we reorganized our distribution business (em three retail companies in two states (em into a single unit under a consolidated management team. The cost savings realized from this consolidation, and many other cost-control measures undertaken over the past five years, underscore our objective of providing a competitively priced product.

Our newly established marketing department's goal is to provide complete energy services to our commercial and industrial customers. This department will also market emerging electrotechnologies to improve the efficiency and competitive position of our customers.

As we develop a stronger relationship with these customers, our customer value programs and products will be driven by what these customers perceive they value and need from energy services. Our value-added products will not be developed by preconceived perceptions of what we think our customers want; they will be designed by our customers for their particular use. To venture a guess that they will want credit cards or frequent buyer plans is a perfect example of a preconceived perception.

As the electric utility industry undergoes more restructuring to increase competition among potential suppliers of electricity, we believe that wholesale competition should be expanded first. We view power marketers as merely an option to consider as part of our long-term strategy to succeed in the wholesale competitive arena.

Our wholesale generating business unit has executed a number of service agreements with other utilities/ power marketers and expanded the number of contacts for short-term opportunity energy purchases. We have completed some transactions under these arrangements, and additional agreements are undergoing legal review.

We have developed our company into a diversified energy services company by investing in energy related companies such as EUA Cogenex, which offers energy-management services nationwide. We continue to seek out niche-type investments to enhance shareholder value because growth in the core industry continues to increase slowly at best. Because of the diversified nature of our company, we do not view power marketers as a threat. They have been and will continue to be viewed as one way to lower costs to customers.


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