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High Voltage: Affiliate Rules Shock Utility Markets

Fortnightly Magazine - January 15 1999

filing the complaint and one as the target of a complaint, again by MAPSA. This time, the emergency order was granted by the Pennsylvania commission (Docket Nos. R-00973953, P-00971265). The June 26 order required PECO to stop maintaining a link from its Internet web site to Exelon Corp., its affiliated electric supplier. The "complained of conduct causes irreparable harm to Pennsylvania consumers by promoting the PECO affiliate through the [electric distribution company's] web site, by failing to include required disclaimers, and by effectively channeling customers away from competitors," according to the decision.

Michael Wood, a PECO spokesman, says the company has not filed an appeal on the web site issue, but "we intend to." The web site link has been eliminated. The matter will next be reviewed by an administrative law judge, Wood says.

"People still are upset that the existing distribution company is competing for customers," Durham says. "The only people I think that are really upset are the competitors. If they thought we were just going to stand by and not compete for our own customers, they were smoking something different from what is probably legal. It's a competitive world and we're going to fight like the devil to keep our customers."

Durham says PECO also will fight limitations on advertising. "We want to be just as free to compete in the marketplace as anybody else is," he says.

PECO On The Offensive

As of late November, nothing had become of PECO's complaint against electric generation supplier Total Gas and Electricity (Pa.) Inc. of Fort Lauderdale, Fla.

PECO's Thomas P. Hill Jr., vice president of regulatory and external affairs, alerted the PUC to complaints his company heard from customers who said that the company's representatives were misleading customers, giving them the impression they were from PECO Energy and that documents they signed meant they would stay with PECO as an energy provider. PECO also issued a press release saying it had filed the complaint with the PUC.

Phil Baratz, president of Total Gas and Electricity, says he was surprised to learn of the complaint, especially through a competitor's press release.

"Look, we're going to make $40 a year on these customers," he says. "It's not as if we'll sign up 1,000 customers and retire. You've got to get into this for the long haul. So this is the approach: We're real honest, real straightforward business people and if there's something about our approach you don't like, tell me and I'll fix it. Or I'll choose to leave the market."

He adds: "We are, without a doubt, more aggressive than a typical marketer in that we're not putting up billboards, we're literally going door to door with a canned sales pitch and we have a whole bunch of sales reps.

"Aggressive marketing tactics - I have yet to see anyone tell me you're not allowed to do that.

"We wear uniforms that are either beige or green. They say on the back in big letters 'Total Gas and Electricity.' We wear a baseball cap that says Total Gas and Electricity. We