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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.


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 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.


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

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