PSEG Set to Launch NJ Program

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Public Service Enterprise Group's Energy Technologies division, Edison, NJ, has decided to forgo education of its customers in order to better ready for the launch of its direct program Aug. 1, when deregulation for energy suppliers takes effect in New Jersey.


The plans call for a direct mailing and a telemarketing campaign to prequalify potential leads, however company officials said it was too early to comment on specific details of the campaign.


PSEG has picked Dunn & Bradstreet Corp., Murray Hill, NJ, to provide software and market research for the company's efforts.


"Dunn & Bradstreet has been playing a critical role for us," said Laurie Vik, director of energy marketing for PSEG. "We do not have access to other utility data and their markets. Dunn & Bradstreet has been our best source."


"The State Department of Public Utilities is laying down the rules for what kind of marketing can be done," Vik said. "We've looked at the broad array of different marketing strategies and types of marketing but we are not doing anything right now."


Unlike other utilities across the country, PSEG is not using direct mail to educate its current customers on the deregulation process.


"Education is the responsibility of the New Jersey Board of Public Utilities," Vik said. "The education program is state run."


As soon as deregulation hits, PSEG will use the database that is being compiled by Dunn & Bradstreet to target customers in a variety of locations throughout the state.


With the market spectrum, PSEG will be able to identify the customers it has the best chance of capturing based on their electric use and the competition's ability to penetrate the market. It will have to rely heavily on market research to determine its most profitable customers as the state has mandated a minimum savings to benefit consumers without defining a maximum savings offer, which increases competition among the suppliers.


Along with the deregulation bill -- passed by the General Assembly in February -- Gov. Christine Todd Whitman has signed the Electric Discount/Energy Competition Act, which mandates a minimum reduction of 10 percent on consumer electric bills to be implemented over three years beginning Aug. 1. The discounts start at 5 percent on the first day of competition and by January 2000, the savings increase must be 7 percent of the pre-deregulation bill. By August 2001, the savings must be at 9 percent. The price level of 10 percent savings must be maintained until August 2003.


In New Jersey only the electric generators, or suppliers, are being deregulated. PSEG has its energy technologies division being deregulated but not its electric distributor, Public Service Electric & Gas Co. The distributors will be responsible for restoring power during black outs or other service problems.


Public Service Enterprise Group is the holding company for both PSEG and PSE&G, and since both companies are under separate management, rules had to be formed for customer transactions between the two divisions.
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