[BETA] Fortnightly

My electric company, Potomac Electric Power Co., has announced a joint venture with RCN Corp. of Princeton, N.J., to offer local and long-distance telephone service to callers in Washington, D.C., and nearby areas, plus cable television and high-speed connections to the Internet. With stockholder money, PEPCO would compete head-on against Bell Atlantic, which won approval from the Federal Communications Commission on Aug. 14 for its $25-billion merger with NYNEX.

Reporting the story, The Washington Post quoted PEPCO President John M. Derrick as saying the company was "evolving into an integrated supplier of energy and telecommunications services."

Also "evolving" are utility stockholders. Some see electrics as vulnerable to power marketers, armed with a card table and cell phone.

Will Bell Atlantic prove so easy a target? Sprint says it will back off from efforts to take on the local Bell carriers; it's having difficult cracking the franchise. Some say the Bells are blocking access to the local loop. Others see AT&T, MCI, et al. as fearing Bell entry into long distance. (If long-distance carriers can show foot-dragging by local monopolies, perhaps they can win sympathy for delaying competition in long lines.)

Into this fight jumps PEPCO, like a field-goal kicker coming off the bench to break up a fight between a tackle and a linebacker.

A few months ago, I called officials at Public Service Electric and Gas Co. in New Jersey to ask about progress on efforts to develop a fiber-optic, "smart-home" service to merge energy services with computers and two-way telecommunications. Known as the "Broadband Utility Solution," and announced in 1995, the joint venture matched the utility with AT&T (later Lucent Technologies), Andersen Consulting, General Electric, Honeywell, and Intellon. Possible services included on-demand meter reading, customer-controlled load management, remote turn-on/turn-off and outage detection, meter tampering and energy theft, plus real-time pricing, load profiling and power-quality reporting.

Now it turns out that PSE&G has canceled the project. Said a spokesperson: "With all the restructuring and changes in regulation going on, we felt we had more important things on our plate."

* * *

"Don't worry about the technology. Let the tech companies fight over that. Worry about what services customers want."

That's Michael A. Rucker talking, founder and principal of The Second Opinion, an Atlanta firm that advises clients on marketing and branding. Second Opinion has worked with Honeywell, Otter Tail Power, and Scientific Atlanta. This summer his firm conducted interviews nationwide on what utility customers think of two-way energy and telecommunication services, such as energy management, real-time pricing, on-line billing, monitoring and protection, and various combinations of telephone, cable and information services. Second Opinion compared and then quizzed customers participating in four specific pilot programs:

• Chatelaine Park. Cable, energy management, Internet access, security and electricity for 300 apartment units in an Atlanta suburb, by The Southern Co.;

• Laredo. Energy management, appliance scheduling, time-of-use pricing and on-line billing for 2,500 Texas consumers, by Central and South West Corp.;

• Blacksburg. Local news, weather, sports, community events, e-mail, discussion groups and more, by a consortium of Bell Atlantic, Virginia Tech and city hall; and