BGE's commercials pique competitors

MANUFACTURING & INDUSTRY

June 04, 1994|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

Move over Luskin's and Circuit City, the Baltimore Gas and Electric Co. is invading the local television airways, hawking its electronic gizmos and appliances.

Stepping up its efforts to be a bigger player in the retail business, the Baltimore-based utility started running television ads for its 11 electronic and appliance stores about a week ago.

It is the first time that BGE has run a television advertisement exclusively for its merchandise operation, though it has been mentioned with other retailers in ads about different products, .. according to the utility's spokesman, Arthur J. Slusark.

While not nearly as strident as the "Crazy Eddie" variety of commercials, the BGE 30-second spot has its own little twist, using the tag-line: "The only thing that'll shock you at BGE is our low prices."

But BGE is not interested in talking about the commercials, even declining to say which channels are airing them, how much they are paying for them or how long they will air.

"It's competitive information," Mr. Slusark said. "We're not giving out details."

But something else is at work here, since other retailers readily talk about advertising campaigns. That something is a proceeding before the Public Service Commission into the relationship between BGE's regulated utility business and its unregulated merchandise operation.

Started in 1904, BGE's appliance stores have always been a sleepy little backwater for the utility -- seen more as a service to customers who wanted to pay for their new refrigerator or stove on their utility bill. But all that changed in the last year when BGE decided to beef up its retail operation along with its service department.

Besides promoting this nonregulated part of its business more aggressively, BGE has also ventured into kitchen remodeling as well as adding the repair of heat pumps and air conditioners to its list of services.

The utility's new competitors cried foul and persuaded the PSC to hold hearings on whether BGE's regulated utility is subsidizing its unregulated merchandise operation. One study by Ernst & Young found the retail operation received $555,000 in direct and indirect support from its regulated parent.

But BGE said that has all changed. The company is even setting up a separate subsidiary on July 1 for its merchandise and service operation to keep all its accounts straight. BGE is supposed to reveal the structure of the new subsidiary June 15.

But the lawyer for the utility's opponents thinks it presumptuous of BGE to start an advertising campaign for a subsidiary that is still under investigation.

"BG&E just doesn't get it," said Gary R. Alexander, an attorney representing two business coalitions. "They are overly aggressive and sooner or later someone is going to get them under control."

The ads "shows corporate chutzpah," Mr. Alexander said. "They have incredible arrogance."

However, the television ads -- which were produced in-house by BGE -- have been in the works for a year and have nothing to do with the PSC case, according to Mr. Slusark.

But Mr. Alexander sees one bright side to BGE's marketing efforts. "They are so aggressive they are continuing to expand the opposition," he said, and his client list is "getting to be longer and longer."

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