Customers Embrace Choice, But Not The Sales Pitch

The sales pitches may come at dinner, or when you’re in the shower.

“This is Juice R Us. Have we got a deal for you.” “Hi, we’re from GreenWatts. Want to buy solar power?”

Welcome to utility deregulation.

Customers across the country are starting to pick their electricity supplier just like they do their long-distance telephone company. Customer choice makes its debut this summer in the Northwest.

Several experiments in customer choice will change the way people have bought electricity for decades.

Some Washington Water Power Co. customers will be among the first in the region to choose their power supplier in a pilot program approved by Washington and Idaho regulators.

Customers in two small Eastern Washington towns, Odessa and Harrington, will have a choice of power companies beginning July 1. Another 2,800 randomly selected cus tomers throughout WWP’s service territory two-thirds in Washington and one-third in Idaho also will test customer choice.

Six firms, including two from Texas and one from New Mexico, will compete for WWP customers, said WWP’s Dana Anderson.

The pilot program is patterned after a similar WWP program that already offers a choice to big industrial and commercial customers.

“We embrace competition. Customers that have a choice are happier customers,” said WWP President Les Bryan.

WWP’s experiment comes a year after New Hampshire became the first state to offer power supply choice to homes and businesses.

High electricity costs drove New Hampshire to open electric utilities to competition in a two-year pilot program.

An average retail kilowatt-hour there costs 11.7 cents - nearly three times the Northwest rate.

The New Hampshire program sparked a feeding frenzy for customers among big power marketers, including Enron, the Texas company that recently won approval from Oregon regulators to buy Portland General Corp., parent of Oregon’s largest utility.

Some 17,000 business and residential customers chose one of 32 suppliers, including companies offering wind power and other non-nuclear sources.

The anti-nuclear pitch worked with some customers in New Hampshire, which has costly nuclear plants.

It boosted Working Assets Inc., an alternative telephone company that’s jumped into power marketing, to one of the state’s top 10 electricity suppliers in the pilot program.

Working Assets and Enron are a new breed of power marketers: They own no power plants or lines, but make money by buying power from producers and reselling it for more.

New Hampshire competitors offered incentives such as free electricity, computer software, blue spruce saplings and $18 bird feeders.

Competitors in New Hampshire used the program “to gain market share and position themselves for 1998,” said Jan Brady, a Bonneville Power Authority economist.

Next year, everyone in New Hampshire can pick their power company.

One year into the experiment, several trends have emerged. Customers like choice because their electricity bills dropped an average 15 to 20 percent. But they don’t like being hit with five to 20 sales pitches.

“They felt inundated, barraged and blitzkrieged,” Brady said.

Also, a third of the eligible customers wouldn’t switch, preferring their existing utility.

Resistance to sales pitches is likely in the Northwest, where customers already enjoy some of the nation’s lowest power rates.

WWP surveys indicate 90 percent of its customers would stay put even given other choices, Bryan said.

Customer choice is coming next January to California, where ratepayers expect to save 25 to 30 percent on their bills. Lawmakers there already have mandated a 10 percent cut in energy bills, just to ensure that retail customers see an immediate benefit.

In the Northwest, where energy savings are less certain, regulators are moving cautiously.

“Regulators here are saying, is it worth a $5 savings on a $50 utility bill if we don’t do it right?” Bryan said.

, DataTimes ILLUSTRATION: Photo

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