CALIF. BREAKS BIG DEREGULATION DRIVE: STATE'S $85 CAMPAIGN DISCUSSES NEW MARKET FOR ELECTRICAL UTILITIES

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California turned on an $85 million public education and advertising campaign last week to prepare electric utility customers for deregulation, which takes effect Jan. 1.

While California will be the largest state to deregulate its $20 billion electric utility market, Rhode Island also opens doors to competition along with large parts of both Massachusetts and Pennsylvania at the same time.

The $200 billion industry is expected to spend 1% to 2% of its total sales annually on marketing, said Mike Rucker, a principal of Second Opinion, a utilities consultancy. That will make it at least as big a spender as the telecommunications industry.

'PLUG IN, CALIFORNIA'

The new "Plug In, California" campaign was created by DDB Needham Worldwide, Los Angeles, and three ethnic marketing agencies. Flair Communications, San Francisco, is handling direct marketing. The $85 million budget breakdown includes $20.6 million for media ad spending, $11.2 million for agency compensation, $12 million for direct mail, and $10.5 million for collateral and fulfillment.

Anita Santiago Advertising, Santa Monica, Calif.; Carol H. Williams Advertising, Oakland; and Imada Wong Communications Group, Los Angeles, handle Hispanic, African-American and Asian/Pacific Islander ad work, respectively.

UTILITIES FUND ADS

The multimedia campaign, with the tagline "Knowledge is power," began Oct. 15 and runs through May. Funding is being provided by the state's three largest investor-owned electric utilities-Pacific Gas & Electric, Edison International and Enova Corp.

Two 30-second TV spots feature a police officer sitting on his motorcycle behind an outdoor board waiting for speeders. The policeman asks himself questions about his future electric service, and while he's preoccupied, several cars zoom past and trip the radar detector. Voice-over asks: "Can't stop thinking about the changes coming to California's electric utility industry next year? If you want some straight answers, call us." A toll-free number then is given.

The California Public Utilities Commission required the campaign as part of its deregulation rulings.

Also running in California are individual efforts from all major California players as well as outsiders such as Enron Corp., UtiliCorp United and Southern Co. Those expected national players are seeking to get into the market.

UTILITIES GEAR UP

Edison International began a $20 million campaign from Grey Advertising, Los Angeles, in August. PG&E's Energy Services unit hired McCann-Erickson Worldwide, San Francisco, as agency for its initial launch (AA, May 19). PG&E also is spending $3 million on its first branding campaign in three years.

Energy Pacific, a joint venture of Pacific Enterprises and Enova, recently hired Kovel Kresser & Partners, Santa Monica, for an account that could reach $30 million to $40 million nationwide.

Although California is the first state introducing a campaign, other states' public service commissions have mandated similar educational efforts. Maine's commission is requiring a campaign, and New Jersey has set up a task force to look into a campaign.

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