PA Electricity Marketers Step to the Plate

Electricity marketers in Pennsylvania are increasing their direct mail campaigns and are making a concerted effort to sell power as the state's deregulation deadlines loom.

PP&L EnergyPlus, a subsidiary of Pennsylvania Power & Light Inc., Harrisburg, PA, and GPU Advanced Resources, the energy supplier division of GPU Inc., Reading, PA, have begun direct mail campaigns in the last few weeks highlighting their services and explaining the terms in their contracts. These companies will join more than 80 companies based outside Pennsylvania that are licensed to sell electricity in the state, including Connectiv Energy, Newark, DE, a deregulated energy company that is a division of Connectiv, Wilmington, DE, and DTE Edison America, the deregulated energy arm of utility DTE Energy.

Consumers have until Nov. 15 to select a provider and begin receiving electricity Jan. 1.

Last month, PP&L EnergyPlus started a direct mail, telemarketing and print campaign that targets mid-sized business customers throughout the state. It relied on DiMark, Langhorne, PA, a direct response advertising agency, to create and execute the mailings and to develop a database. The campaign has been particularly challenging because PP&L hadn't used direct mail on a broad basis before this, especially something as large as a statewide campaign.

Spokesman Paul Wirth said PP&L also must compete with “out-of-state energy marketing companies that do not generate power, but are simply marketers.” However, he said his company is fighting back by using outside sources such as DiMark and by bringing several people inhouse from consumer products companies that understand consumer marketing.

DTE debuted “America's First Energy Club,” which is based on the Value Club concept, for its direct mail campaign. The club lets members decide how they want to purchase electricity — online, over the telephone, by mail or prepayment — and their costs are adjusted based on the choice they make. The membership also offers discounts from a network of merchants, including local video stores, dry cleaners and restaurants. So far, 40 merchants have signed up. The program will be used for gas and other energy providers as those utilities become deregulated.

“There is not going to be astronomical savings that come out of the high-priced or low-priced provider,” said Laurie Kessler, a spokeswoman for Edison America. “We are asking customers to look at value in a nontraditional way. We are asking them, as members, to look at the total picture. What is the total value that you get as a customer? Maybe, due to the discounts from local merchants, you can save $30 a month.”

Companies couldn't begin their campaigns until now because they were waiting for Pennsylvania's electricity distributors to release rate classification and customer names, which have been approved by the state's Public Utility Commission, to suppliers that are selling electric power.

“Since we need information from electric distribution companies in order to segment specific customers and do an accurate mailing to people who were successfully enrolled to participate in [Pennsylvania's electricity choice] program, we needed to wait until the electric distribution companies released their lists,” said Pamela Panarella, a spokeswoman for GPU Advanced Resources.

James Cunningham, president of the Pennsylvania Electricity Association, Harrisburg, said direct marketing is heating up now that the rate issues have been resolved and companies can finally include rate information in their campaign fliers. Fortunately, energy marketers have a captive audience: According to the PEA, almost 2 million consumers have signed up for the opportunity to shop for electricity since July.

Direct marketing, Cunningham said, is one reason consumers are interested in electricity shopping.

“[The education] campaign we began in June has driven awareness of the opportunity to shop by 95 percent,” he said, “Now, more than 40 percent of all the customers in the state know how to go about participating.”

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