TWO UTILITY ACC'TS PLAN $60M IN ADS: DEREGULATION SPARKS DDB, MCCANN WINS

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The electrifying effect of deregulation on the once-sleepy gas and electric business has begun, as two agency assignments that could total more than $60 million were made last week.

McCann-Erickson Worldwide, San Francisco, agency for Pacific Gas & Electric Co.'s consumer advertising for northern California since 1978, was named to handle a new national energy-services program through PG&E's unregulated subsidiary, PG&E Energy Services.

PG&E Energy Services is opening more than two dozen offices nationwide to sell services to commercial, industrial and agricultural customers.

COULD REACH $100 MIL

Although spending was undisclosed, comparable entities-such as Enron Corp. and UtiliCorp United-have indicated their budgets would run in the range of $30 million to $40 million, with spending of $50 million to $100 million eventually required for impact as a national brand.

UtiliCorp rolled out a national print and cable TV campaign for its EnergyOne last year; Enron, through Ogilvy & Mather, New York, has begun a corporate brand-ing effort.

For its regulated utility services, PG&E this year will spend $5 million on advertising, but that will be considerably higher in the future, said Lauren Ustick, advertising director.

"We're very anxious to see what [deregulation] brings," Mr. Ustick said.

While advertising to gain market share during the deregulation period is centered on business-to-business customers, California is preparing to use ads to inform con-sumers about the pending deregulation of the state's $20 billion electricity market.

DDB NEEDHAM ASSIGNMENT

DDB Needham Worldwide, Los Angeles, last week won a contract initially set at $20 million to educate consumers about how deregulation will effect them.

The contract was awarded by the Electrical Restructuring Education Group, a 19-member committee appointed by the California Public Utilities Commission and headed by Greg Wood, VP-marketing of Supercuts.

The effort will range from door-to-door education and information tables at supermarkets to traditional mass-media advertising, said Dave Park, president of DDB Needham's Los Angeles office.

The agency will be seeking public relations, Hispanic, African-American and Asian specialists to help with the effort, which is expected to start by Sept. 1.

"Consumers have to be prepared by Jan. 1," Mr. Park said.

DEREGULATION A `BRIGHT LIGHT'

California will deregulate electricity on Jan. 1, 1998, and the result could be a marketing battle in the state rivaling those in the telecommunications industry.

"We're all seeing the bright lights," said Ron Benza, exec VP-general manager at McCann.

Other utilities seeking to beef up their marketing muscle include the Los Angeles Department of Water & Power, with spending estimated at $5 million to $7 million.

Finalists in an agency review conducted by Select Resources International, West Hollywood, Calif., are incumbent Fotouhi Alonso Cameron, Dailey & Associates, Pearlstein Group and Campbell-Ewald, all Los Angeles; Rubin Postaer & Associates and Leap Partnership, Santa Monica; Team One, El Segundo; and Saatchi & Saatchi Pacific, Torrance.

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