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News Analysis

Fortnightly Magazine - January 15 2000

you know what? The customers are going to start speaking up. If you don't give them what they want, whether you're a commission or a company, you're going to hear about it.

"Customers might not understand the language, but they understand that they've been promised something and they want people to deliver."

California: How to Judge Success

in Selling Change?

When it started on the untraveled road to electric deregulation in 1996, California anticipated that residential customers could be confused or even respond negatively to the change unless they were properly prepared. For this reason, the state's electric restructuring legislation had mandated that utilities educate consumers about the coming change and retail choice. Developing a campaign designed not to elicit a response from customers-no purchase, no switching-but to communicate only coming change and choice presented unusual challenges, not the least of which was measuring its success.

"The message was never geared to kick-start the competitive market," explained Valerie Beck, electric restructuring consumer education project manager at the CPUC. "So some of the criticism we've received about the program is that not that many residential customers in California have changed, [but] that was never the goal, that was never the purpose of the program and that wasn't the message."

Establishing what groups would be involved in developing California's education program was an evolving process. Early on the state's three largest investor-owned utilities-Pacific Gas & Electric, San Diego Gas & Electric (now Sempra Energy) and Southern California Edison Co.-successfully petitioned the CPUC to be allowed to combine their education programs in the interest of reducing advertising outlays.

A working group of 19 stakeholders called the Electric Restructuring Education Group had been established to oversee program development. EREG hired the program's prime consultant, DDB Worldwide Communications Group, to create a comprehensive media campaign. The program was submitted to the PUC, whose advisory committee made recommendations before approving it.

The commission's involvement increased substantially in August 1997, however. At that time, the CPUC disbanded the EREG and authorized the three utilities to implement the program under its own oversight.

"The commission said that any materials developed by the utilities or its advertising agency also had to be sent to the commission for approval, so there was not one word, one ad, one visual that went out that the commission didn't review and approve," said Beck. "The purpose of that was to alleviate some of the stakeholders' concerns about the message being neutral."

Beck admitted that planning the program, which ran from September 1997 through May 1998, seems like a memory from a lifetime ago. As she explained, objectives for the campaign were gleaned from the restructuring law, but developing the messages to achieve those goals was more difficult. The utilities invested about $1 million in up-front research, primarily through 40 focus groups statewide, to gauge residential customer attitudes about electric restructuring.

"What we found was they really didn't care," remembered Beck, laughing. "Consumers did not care about electric restructuring at all. What they cared about is that when they flipped a switch, their lights went on."