Md. plans ad campaign on deregulating utilities

Competition begins on selling electricity to the public

January 23, 2000|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

In advance of the opening of Maryland's electricity market to competition this summer, the state Public Service Commission will launch a $6 million consumer education program April 1.

The PSC will employ newspaper, radio and television advertising in addition to billboards and brochures in the Herculean task of explaining to consumers what choice of electricity providers means.

The campaign also will feature a Web site, consumer guidebook, and a toll-free call center.

The goal, said PSC Chairman Glenn F. Ivey, is for the commission to establish itself as a neutral resource as competing electricity suppliers flood consumers with marketing pitches.

"Consumers need information from an entity that doesn't have a dog in the fight," Ivey said.

The key to a successful consumer education campaign is to offer easy access, said Al Cappannelli of High Point Communications Group Inc. of New Hampshire, which helped to develop the campaign.

In addition to High Point, Gregory S. Franklin Associates, also of New Hampshire, and Noble Steed Associates of Hunt Valley are consultants to the campaign.

High Point and Franklin have worked on deregulation consumer education programs in New Hampshire and Connecticut. Franklin has also worked with a similar campaign in Maine. Noble Steed joined the team to lend its expertise about Maryland for the campaign, which was funded by the General Assembly.

"We want consumers to get the information when, where, and how they want it, whether it's from the web site at night, or if they want to call during the day or take the time to really read the consumer guide," Cappannelli said.

The issues surrounding electric deregulation can be dense, he said.

In November, the commission approved a proposal sponsored by Baltimore Gas and Electric Co. to deregulate Central Maryland's electric market July 1. The settlement guarantees residential customers of Maryland's largest utility a six-year, 6.5 percent rate reduction.

Competing power marketers would have to undercut BGE's rate of 4.224 cents per kilowatt hour to save customers money. The rate would rise to 5.02 cents after six years.

The commission has also approved restructuring plans for the Potomac Electric Power Co. (PEPCO) service territory in Prince George's and Montgomery counties, the Allegheny Power territory in Western Maryland, and the Conectiv Inc. territory in Eastern Maryland.

So far, seven power suppliers have filed for licenses to sell electricity in Maryland.

Along with the consultants, the PSC also received feedback on the campaign from the Consumer Education Advisory Board, an eight-member committee consisting of representatives from the public utilities, the state Office of People's Counsel, and other industry and consumer groups.

"We just want people to take advantage of the resources that will be available to them to make a choice that's best for them," said Malinda B. Small, chairwoman of the committee and BGE's director of community relations.

"So many people find electric choice issues complicated, we want to make it as easy as possible," she said.

To shape the campaign, the consultants studied other states that preceded Maryland in restructuring its electric industry, Cappannelli said. Pennsylvania, which opened its market to choice in January 1999, was among those studied.

Pennsylvania employed all of the tools Maryland plans to use with success, said Jim Cunningham, president of the Pennsylvania Electric Association, a trade group for public utilities in the state, that organized the awareness campaign.

The three objectives of the state's $25 million continuing campaign, which started in April 1999, are to create consumer awareness of the opportunity to choose, teach consumers how to shop, and to help consumers understand the benefits choice offers, he said.

Recent surveys conducted by the group show there is 95 percent awareness of electric choice in the state, and 10 percent -- about 500,000 -- of the state's electric consumers have opted to switch power suppliers.

"You can't measure the success of a campaign by the number of people who switch," Cunningham said.

"There's a fine line between promoting switching and educating," he said. "The job to promote people to switch falls to the retailers. That is not the job of the government or an education program."

Michael Travieso, Maryland's People's Counsel, which represents residential utility customers, agrees that the commission must not create a marketing campaign, but an educational one.

"We really haven't seen any of the material or messages the consultants have produced. A properly styled campaign can achieve the desired result," he said.

Consultant Cappannelli agrees, but said a successful campaign will take time to work.

"A competitive market, as well as educated consumers, take time to mature," he said.

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