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News Analysis

Fortnightly Magazine - September 15 1999

Internet to grab customers and sell products. Utilities that offer online enrollment in bill-averaging or energy efficiency programs are nothing new. But now power suppliers are using the Web to market their electricity to utility customers where customer choice laws have been enacted. And they're signing them up directly online.

ConEdison subsidiary ConEdison Solutions, for instance, allows prospective business and residential customers to choose it as their energy supplier via its Internet site. By going to the sign-up section, large commercial, small commercial and residential customers are directed to the appropriate forms. Business customers are directed to a section called "Solutions for Your Business," where they are educated about energy management services, an interactive energy forum allowing them to submit questions to an energy expert, and a store where they can purchase products such as fiber optic lighting.

Conectiv Energy also allows residential customers to sign up for service via its website. But in addition to a choice of Conectiv's regular rate offerings (between fixed rate or electric-heat fixed rate), customers may choose the "greenness" of the energy. Through the Nature's Power program, customers can choose to pay a premium for 50 percent or 100 percent green energy.

A new power marketer with a cyber name plans to capitalize on the public's enthusiasm for all things online. Utility.com, which claims to have been the first company to sell electricity to residential and business consumers via the Internet, in March was launched in California. It will begin servicing Nevada customers in March 2000, and plans to offer service in Pennsylvania, Massachusetts and Rhode Island soon.

With a blanket guarantee of 10 percent savings and a promise to donate 5 percent of its profits to environmental causes or other charities, the company recruits, enrolls, bills and services customers directly from the site. Small business customers can email the company for a price quote. Once enrolled, the customer can track energy use and pay bills online.

According to chief executive officer Chris King, the fact that the company is entirely Web-based is what allows it to offer customers low prices. Said King, "This significantly reduces operating costs compared to a brick and mortar utility, resulting in additional savings that can be passed on to customers."

But, he added, what distinguishes Utility.com from other utilities is its customer-centric approach - not the Web.

"The biggest difference our customers have is choice; if they like us, they can choose us. If not, they can choose someone else to provide their electricity," said King. "This, except where there is true competition (such as Pennsylvania, where the state has had the foresight to establish a truly competitive market), is not possible with a traditional utility. The result is an intense customer focus on our part."

A similar service is offered by Essential.com, which serves customers in most of Massachusetts. The company, which in addition to electricity offers telecom service, natural gas, heating oil and other products, plans to expand in New England and into the Mid-Atlantic states.

In a deal that bundles services including electricity, and local and long-distance