About four months ago, at a conference at Stanford University’s Center for International Development, the economist and utility industry expert Frank Wolak turned heads with a not-so-new but very...
THE NEW LOGOS ARE SPLASHED ON BASEBALL CAPS AND COFFEE MUGS, GOLF
shirts and hard hats. There's the three-year, $42-million advertising budget and the slick newspaper, radio and TV ads. There's the NASCAR race, the Touchstone Energysm 300.
But in two, easy-to-understand sentences, what does the new Touchstone Energy do? For an answer, I turned to Michael L. "Mickey" Miller of Kentucky's Nolin Rural Electric Cooperative Corp. Miller chairs Touchstone's executive council.
"Touchstone Energy creates an alliance of more than 400 electric co-ops that serve more than 11 million customers. They tie that alliance together to be the second largest¼ utility network in the nation that serves about 40 percent, by revenue, of commercial-industrial accounts.
"It gives us a presence in¼ 28 states¼ it gives us, we think, a very distinct advantage over any competitors that are in the field by that presence¼"
Mr. Miller, to be fair, you've spelled out what Touchstone is, not what it does.
"OK, what it does," he says. "Well." He sighs. "I'm trying to phrase this so it will be easy for you and me to understand where we're going with it. I guess that presence we're looking for, we're already there. That's true. We're already there.
"We're already doing those things. It gives identity to those co-ops that have existed for 60 years¼ people may not recognize we are all here for the same business. We're all not-for-profit organizations.
"I'm still thinking I'm not answering that question you initially asked me."
To be fair to Mickey Miller, it isn't an easy question to answer, as electricity branding pioneers EnergyOne, Southern Co., Enron Corp. and others have discovered. Branding is like vapor: Easy to see, hard to touch.
Like the vapor pioneers, Touchstone is going to try to convince customers and prospects that something has changed. That the brand tying nearly half the country's co-ops doesn't just mean a rainbow logo, a catchy jingle (em The Power of Human Connections (em or even a new attitude. Miller's talking about added oomph, value that wasn't there before.
So the real question is: What has changed? Will change?
The co-op industry magazine, Rural Electrification, warns the Enrons of the world to beware. But what do competitors have to be wary about? Are co-ops going to supply energy en masse to chain stores? Will co-ops let others into their service territories so they can venture into neighboring regions to provide commodity resale? An energy brand does that, right?
Well, in most states, because of territorial laws and the lack of reciprocity provisions, competition may not unfold exactly as Touchstone's 400 co-ops would envision.
So why create a brand?
"I guess for true deregulation to really happen, some of those territories are either going to have to change or the walls are going to have to come down," Miller admits.
It's easy to see (em no blinding vapor here (em that when it comes to competition (universal access to meters, for example) legislative action will have to be taken before brands compete head-to-head. No logo or jingle will work without