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Advertising & Branding: Are Utilities Getting It Right?

Fortnightly Magazine - January 15 1998

through their ratepayers' money have built up this name ID. And not through shareholders' money, like we're having to. So there are a lot of advantages that the monopolies are currently holding on to."

PECO Energy's Hackney, however, sees it differently. "The money for advertising," he stresses, "with the exception of the [consumer education] program [that's mandated by the PUC], which is in no way connected to any of this, is being paid for by the shareholders, by the investors. So that first point is wrong. The other thing, what is Enron, a $16-billion company? We're a $4-billion company. Who has resources, if you're looking at revenue?"

Frontrunners: Offering Price and Service

The battle of words between PECO and Enron obscures a major point: Do customers want attentive service or just the lowest price?

"I thought a lot of them were kind of dumb, some more so than others," Fred Mallalue admits, talking about the ad blitz in Pennsylvania. So Mallalue, production control manager for a mushroom cannery in Knottingham, Penn., that spends on average $9,000 a month on energy, chose to focus on his bottom line.

As one of the participants in the Pennsylvania pilot, he chose Conectiv Energy, the new Delmarva Power & Light/Atlantic Energy merged entity. "They had all the information gathered from the beginning," Mallalue says. "Right up front they could tell us that we'd save 10 percent off our total bill. All the other companies that contacted us couldn't give us that right away - not even PECO, our current supplier. No one else had a definite figure; they said it depended on our rate tariff, usage, etcetera. But Delmarva was right up front."

In California, however, PG&E Energy Services relied on value-added services to beat out a dozen competitors to win a four-year mega-deal with McDonald's Corp. PG&E Energy Services will serve as the energy supplier of choice to 800-plus restaurants, regional offices and future restaurants statewide. Walt Riker, spokesman for the fast food giant, agrees that advertising wasn't really part of the attraction. For one thing, the deal was in the works before PG&E ES started running their big ads. Instead, Riker says, they chose the company that offered the "best case, the best deal and the best long-range package," including consulting services for maximizing energy efficiency.

On the Fence: Awaiting a Mature Industry

Advertising companies in Pennsylvania and elsewhere in the East may be "having a blast" entering the energy field, according to an article in The Philadelphia Inquirer, but Eileen Arbues, of PG&E Energy Services, says she's seen a different view in the West. "Many of the ad agencies feel that it's premature to be using some of these vehicles to acquire customers and that until the industry matures more and until there's a more interested or differentiated message, they're turning some of this business away. I think that there will be a couple of key agencies that will be licking their chops as we become more mature at the process of acquiring and targeting customers. But I think out of the gate¼