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News Analysis

Fortnightly Magazine - January 15 2000

Those customers who were interested in restructuring cared about cost, safety and reliability and who could be counted on when there was a problem. "That's how we developed the key messages," said Beck. "Those [questions raised in the focus groups] ultimately were made into brochures."

From the beginning, the program was targeted at small customers. Explained Beck, "The decision was made early on that large consumers know how to purchase electricity, they know how to protect themselves, but it's really the small commercial and residential consumers that would need information about the new marketplace."

How successful the campaign was in meeting its goals of communicating change and choice was measured through customer recognition. Surveys conducted in summer 1998, immediately following the campaign's run, found 94 percent recognition among residential and small business customers.

Because the three utilities met the legislation's requirement that 60 percent of customers have an aided awareness of the coming change and choice, they are able to recover the program's $74 million cost through their frozen rates. But since the rates are frozen, Beck added, "Clearly, there's going to have to be some cost-cutting somewhere."

Although the main education program ended shortly after retail choice began in California, the community outreach component continues. "California has so many different ethnicities and non-English-speaking communities, we still feel the community-based effort has a lot of merit [for reaching] customers who might not be reached through traditional [means]," said Beck.

In hindsight, she offered some advice for commissions planning education programs: "The one thing I can't recommend highly enough is doing the up-front research."

Beck described how her group's early focus groups revealed that most citizens didn't understand the monopoly utility electric system, much less the competitive market model. "Thank goodness we did that research so we could educate [people on these issues] in tandem."

Pennsylvania: Learn from Retail's Approach

A new arrival in heaven is greeted by an aid who issues him a voucher for angel wings, his choir schedule and electric supplier. But, asks the man, doesn't he get to choose his own electric supplier?

"Where do you think you are?" replies the heavenly bureaucrat. "Pennsylvania?"

Television ads like this one, part of Pennsylvania's Electric Choice consumer education program, use humor in an attempt to make electric choice accessible, while positioning the commonwealth as a leader in deregulation. The other program goal is to use price and environmental benefits to motivate people to take an interest in choice.

In creating a new kind of campaign with little precedence to draw upon, Commissioner Brownell drew upon her experience in marketing in the banking industry.

"I looked at what other companies did to launch a new product," she recalled. "What I wanted to design was a full-blown integrated marketing campaign that would introduce consumers to what was essentially a new product, electricity, that would give them the confidence to go out and shop, and would empower them with enough information that they could make an informed decision," she said.

State PUCs need to approach the task on the same level that Procter &