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Utilities: Deregulation creates a market for marketing
WANT TO GENERATE SOME HEAT WITH the next big account win? Then it's time to call on the gas and electric company. Agencies in search of the next hot ad category are increasingly eyeing the energy and utility sector, which, due to deregulation, is undergoing a rapid transformation.
"It's the way telecoms were in the ... '8os," said Paul Bernasconi, creative director and partner, Oasis, New York.
The shift from monopolistic to competitive conditions has paved the way for new power companies to court customers. Now, newcomers creating a brand identity from scratch as well as companies that have been local landmarks for decades are employing agencies in the battle.
Up until 1995, advertising for the entire $uo billion utilities industry only amounted to annual billings of about $87 million, according to Sam Tornabene, director of communication services at the Edison Electric Institute, a Washington D.C., association representing more than 200 shareholder-owned U.S. electric companies. "Consumers would sign up for electric service when they bought a home, and that was it," he said. "The market was 100% penetrated."
But in 1996, the landscape changed dramatically: Federal Energy Regulatory Commission orders required open and equal access to utilities' transmission lines for all electricity producers, which made restructuring of the industry possible, according to the Department of Energy. (In addition, the commission has encouraged the development of competitive wholesale power markets for two decades.) Now individual states are deciding if-and how-they'll open up their energy markets. As of last month, 24 states and the District of Columbia had enacted laws to restructure; another...