ELECTRICITY:

Investor-owned utilities launch identity campaign to engage public

The nation's investor-owned electric utilities are banking on a new national campaign to help educate consumers and policymakers about the value of reliable and clean electric service, something the industry plans to spend upward of $90 billion a year to provide.

"Most people take electricity for granted," the Internet- and social media-based campaign We Stand for Energy said May 27, the day of its debut.

The campaign's launch was a focus of the Edison Electric Institute's annual meeting in Las Vegas last month, where kiosks were scattered about to help executives understand the program. EEI is the Washington, D.C.-based lobby for investor-owned utilities, which account for 70 percent of the nation's electric power industry.

Utility capital spending has been surging in recent years as aging transmission grids and generation assets need updating or replacing. And more spending is planned to pay for emissions controls, a smarter grid and technology to help secure utility assets from physical and cyberattacks, among other things.

Typically, getting approval for such expenditures is the subject of state-level rate cases before utility commissions, where changes in just a few basis points on a utility's return on equity can amount to millions of dollars. In recent years, as state economies emerged from the Great Recession and interest rates hovered just above zero, regulators have been tougher than in the past on utility rates.

"It's no secret that American consumers are using more electronic devices and electricity than ever before. Electricity plays such a critical role in all of our lives and powers our economy and innovation," said Brian Wolff, EEI's executive vice president of public policy and external affairs.

Wolff also touted efforts at innovation to better adapt to customer demands, including the $90 billion each year in capital expenditures.

The two-way conversation enabled by the website -- where individuals are invited to join by providing email and other contact information -- is "a natural progression for an industry that is undergoing such a major transformation," Wolff said.

The website includes a blog and encourages those who join to invite friends into its community. It also has an interactive map of the United States that breaks down the fuel mix and the number of electric company employees in each state.

The fledgling campaign has a Twitter presence but has yet to populate a Facebook page. No television or radio spending is anticipated at this time, but EEI members will be urged to publicize the campaign, one EEI official said.

"We don't have any specific promotion plans yet," said Melissa McHenry, spokeswoman for American Electric Power Co., adding that "I think they are still in the process of rolling it out to the companies."

Eyes on the end consumers

Such efforts by both individual companies and industries to burnish their reputations is not unusual, said Tülin Erdem, the Leonard N. Stern professor of business at New York University's Stern School of Business. It's all about "building brand equity," she said in an interview.

In addition to the low cost of Internet-based media, it can be much more targeted through "micro-marketing" to people who have signed on, Erdem said.

"They just want to put themselves in a positive light in the eyes of consumers -- as well as legislatures of course. But these kinds of campaigns are more directed usually toward the end consumer, and the end consumer sentiment of course may affect also the legislature's outlook. So there are cascade effects with these things," she said.

"The idea is to remind the consumer or educating about this industry's positive spillover effects on the society, like job creation, clean energy, etc.," Erdem said. The education effort can't hurt if industry investments "may result in even higher electricity charges. ... They don't want a backlash from the consumers so they want to prepare the ground for that."

Rajkumar Venkatesan is a professor of business administration at the University of Virginia's Darden School of Business.

In his view, EEI's effort is part of the growing conventional wisdom about establishing good will to be prepared before a catastrophic event.

So it's important to build a "stockpile of consumer education material" and to have a plan and a team in place during normal times that can be used when necessary.

"You cannot build a community and build a campaign to tell your side of the story when you're in reaction mode" to something sudden and unexpected, Venkatesan said.

Twitter: @RodKuckro | Email: rkuckro@eenews.net

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