Companies To Fight For Alberta Electricity Customers In Deregulated Market

CALGARY -- - Power companies in Calgary and Edmonton are preparing to duke it out for consumers as Alberta prepares for electrical deregulation Jan 1. Calgary's Enmax and Edmonton's Epcor - the province's two largest municipally owned utilities - are planning aggressive campaigns to sign up each other's core customers: the 270,000 Edmontonians who subscribe to Epcor and the 325,000 Calgarians who are Enmax clients.

Both firms are expected to spend $5 million on their respective sales pitches.

"We are counting on our track record and our knowledge of what makes the Alberta market tick to retain our current clients and win new customers," says Enmax president Bob Nicolay.

"We expect the competition to be fierce."

Under the current system, electricity retailers - who obtain their product from the Power Pool of Alberta - are restricted to where they can sell power. That will change when the open market system for retail sales comes into effect.

In some ways the battle for customers is already under way.

In recent weeks, Enmax has added more than 50,000 customers in Red Deer and Lethbridge - although those customers will also be able to buy their electricity from the array of electricity retailers expected to set up shop in the province in time for the Jan. 1, 2001 shift to a deregulated market.

For its part, Epcor has laid claim to retail water customers in Strathmore, just 50 kilometres east of Calgary, said Epcor spokeswoman Cairine MacDonald.

MacDonald says the Edmonton utility's ace-in-the-hole - its ability to sell other products like natural gas along with electricity - will help it attract more electricity clients after deregulation.

"Now is the time to position ourselves for the future," says MacDonald.

However, other big-league industry players, like Utilicorp United of Kansas City, Mo., which moved into Alberta earlier this year, are also expected to be aggressive at marketing so-called bundled packages.

Utilicorp officials have indicated the powerful U.S. energy giant considers Canada, and in particular Alberta, a prime market.

Industry observers like Robin Diedrich, an analyst with the Edward Jones investment firm, say bundling will be a key feature in the battle for new customers.

"Customers have shown they like bundling," says Diedrich.

Enmax officials insist they won't be marginalized by companies like Epcor or Utilicorp, which may appear to have more goodies in their bundling packages.

Ironically, industry members acknowledge that even with the incentives of bundling, it will be difficult to coax significant numbers of electricity customers away from their current retail suppliers.

"I think most customers will be slow to move," says MacDonald. "But as we saw with deregulation of the telephone industry, there were some customers who were willing to change service providers the first day."