DWP Aims Ads at New Competition

In preparation for the competition that will come with deregulation in 1998, the Los Angeles Department of Water and Power is spending $1.6 million of its customers’ money on an advertising campaign aimed at keeping them as customers.

The campaign in Spanish and English began May 1 and ends June 30, using 530 bus ads, 197 billboards, ads in eight local newspapers and radio spots in 19 area stations.

None of the ads mention deregulation or how some DWP customers will eventually be able to buy power from investor-owned utilities. Instead, they focus on what the DWP has done to conserve water and provide cheap electricity.

“We’re making sure the future is bright,” reads a bus ad that shows a girl doing her homework under the glow of a lamp. Another ad shows a boy playing in the spray of a sprinkler, accompanied by the words: “We’re making sure the future is green.”

The radio ads echo the same theme. They praise DWP workers for building a 338-mile aqueduct to bring water to the city and standing “on ready alert 24 hours a day to help you deal with everything from earthquakes to fires.”

DWP officials say the campaign is crucial to retaining customers and thus allowing the utility to keep power rates low.

“It’s an investment,” said DWP spokeswoman Karen Denne, adding that the campaign is paid for with cost savings resulting from DWP staff and expense cuts.

She compared the campaign to the advertising battles that ensued after deregulation allowed long-distance telephone companies to compete.

In fact, Southern California Edison, one of three other utilities that will compete with the DWP for customers in Los Angeles, launched its own $3.2-million billboard and television campaign at the end of January.

Those ads were primarily geared toward advertising Edison’s new name--Edison International--and its new logo. But Edison officials said the campaign was also aimed at promoting the utility in preparation for deregulation.

“The basic message was to get ready for competition,” said Mary Luthy, an Edison spokesperson.

The California Public Utilities Commission endorsed a plan last year to deregulate the power-generation part of the utility industry, giving customers a variety of choices for the purchase of electric power. The deregulation takes effect in January 1998.

Several city officials say they support the DWP’s campaign because competition will mean going head-to-head with other utilities that are prepared to spend millions of dollars on advertising.

“We have to get the message across that we are in competition,” said Councilman Richard Alatorre, who head’s the council’s Budget and Finance Committee.

He warned that the DWP must retain large industrial customers to keep rates low for residential customers. “There are going to be higher rates if we lose our large customers,” Alatorre said.

In fact, the DWP generates more revenues from its 2,763 large business customers than it does from the 1.2 million residential customers and Denne said the toughest battle with other utilities will be over who serves those large businesses.