Follow-up
Electric Switch
First they said they weren't. Then they said they were. Then they said they weren't. Now Enron's managers have settled on the decisive "we're reevaluating." At question last week was Enron's commitment to pitching its energy package to residential customers. Enron bought PGE last year for $3.2 billion. The purchase was part of Enron's national effort to promote energy deregulation. By purchasing PGE, Enron took control of a local monopoly, which it said it would use to set the stage for competition. Late last year Enron set up a free-market pilot project in which it would compete with PGE, and any other energy providers, for traditionally captive customers in order to demonstrate the viability of electric utility deregulation. Last week Willamette Week reported that the Houston-based energy company was going to stop seeking new customers in the free-market pilot project ("Enron Unplugged," WW, April 29, 1998), which began in four Oregon cities last December. After the article ran, the company changed its mind. "Enron is going to compete," spokesman Gary Foster says. "We are still going to have an offer out there." At the same time, Foster acknowledges that Enron isn't quite sure how aggressive its marketing will be. "We have not decided what we're going to do. We're reevaluating the marketing side of things," Foster says. "We don't publicly reveal what our marketing strategy will be." Not terribly convincing for a $13.2 billion company that said it would spend up to $200 million on advertising the virtues of deregulation and has already reportedly spent $25 million running TV spots and full-page newspaper ads around the country. Last winter Enron used direct-mail marketing and some cable advertising spots to promote the Hillsboro, Oregon City, St. Helens and Sandy pilot project. By mid-April, Enron had signed up about 2,600 of the four cities' 48,000 potential pilot-project customers. Electric Lite, a small South Carolina-based energy company that's also participating in the pilot, has outpaced Enron with a scrappy, grass-roots marketing campaign around "green" power, grabbing up 3,600 customers so far. "[Enron's hesitancy] is good for us," says Electric Lite GM Jan Burreson. "It leaves us with more customers. You have to respect Enron's realization that this [the residential market] isn't their niche." Burreson's coy commentary may be misleading. When a giant like Enron starts wavering on the viability of actively marketing a product (the company pulled out of California's deregulated market last week and says it's currently reevaluating its involvement in pilot projects in Ohio and Massachusetts) it could be time to wonder if you're in the right business yourself. Burreson masks any concerns she may have. "This pilot is the most successful in the country, with highest percentage of customers [13 percent] choosing a competitor over the incumbent," she says. --Josh Feit |
