Internet, electricity industries meld at Comdex

Wednesday, Nov. 17, 1999 | 10:52 a.m.

Calling itself the nation's first Internet utility company, Utility.com says it will try to save Nevada consumers 10 percent on their power bills when its operations begin in the state next year.

The Albany, Calif.-based online power company was the first utility to be licensed to sell electricity in Nevada when the electrical industry is restructured. State regulators are targeting competition to begin March 1.

Enron Corp. is the only other company to receive a license to sell electricity in Nevada, but an affiliate of Nevada Power Co. and five other companies have filed applications with the Public Utilities Commission of Nevada.

The Nevada Power affiliate and Utility.com, so far, are the only companies specifically targeting the entire residential marketplace. Others are focusing exclusively on business and industrial customers or considering niches within residential marketing, such as billing and metering.

Utility.com is introducing itself to the information technology industry this week as an exhibitor at the Comdex computer show, which runs through Friday at the Las Vegas Convention Center, the Las Vegas Hilton and the Sands Expo Center.

"We're the stealth story of the Internet," said Chris King, chief executive officer of Utility.com. "You can buy toys, music and investments online. With us, you can buy electricity and gas over the Internet."

The company currently operates in California and Pennsylvania and expects to be licensed in 20 states by the end of 2000. By using the Internet as a conduit for billing transactions, company officials guaranteed a 10 percent savings for customers in California and Pennsylvania.

King said because all the regulatory rules of operation in Nevada haven't been completed, the company isn't making the same guarantee here just yet, but he said he expects the goal of 10 percent savings to be realized for the state's customers.

The company did not disclose how many customers it has, but said it will be in markets with a total of more than 30 million households and small businesses by the end of next year.

Utility.com was founded in 1998 by King and Bill Gross, a director of idealab!, which helped launch eToys and tickets.com.

A former executive with Pacific Gas & Electric Co., King said he began seeing the potential for Utility.com four years ago when states began deregulating their utilities and Internet technology began getting popular.

King said his company is counting on cost savings to attract customers.

"But some of our customers have told us that they were ready to try something different," he said.

Utility.com is definitely something different from a standard utility company. The company buys bulk power at wholesale and resells it at discounted rates. Robyn Forman, director of marketing communications, said the company can offer lower rates because of low overhead costs.

The company has no offices, doesn't pay for postage and relies on Internet communications, not paperwork, in its correspondence.

Here's how it works for consumers: A customer can sign up for service at the company's Internet site. Forman said the instructions are easy to follow and the basic information is used to generate a transfer from the existing power company, which is verified to the customer via e-mail.

New customers get a $25 signing bonus for switching companies. Forman said there are no switching fees or contracts and no cost to switch back.

The computerized form also establishes a regular monthly payment date of the customer's choosing and an electronic transfer of funds, either directly from a bank account or on a credit card. Forman said more and more people are using credit cards to pay utility bills to accumulate points faster for bonus programs like frequent-flier mileage.

Another part of the company's growth and marketing strategy is to partner with other companies to offer additional services through its web site. Utility.com said it would offer customers reduced rates through Internet service providers.

In the future, the company could offer a variety of energy-saving products through its web site.

It also is working with Hollister, Calif.-based Corbin Motors Inc. on a giveaway that is an attention-grabber at the Comdex show. Corbin and Utility.com plan a drawing for a single-person Sparrow electric car, which has been in development since January 1996.

A Sparrow is on display on the trade show floor. Company officials said it will be in Las Vegas for the Winter Consumer Electronics Show in January.

Corbin President and Chief Executive Officer Ron Huch said the Sparrow, a narrow four-wheeled vehicle, is classified as a motorcycle by regulators and takes about six hours to be fully charged. That translates to about 75 cents a day, Huch said.

There are about 30 of the $13,900 vehicles on the road in California, Huch said.

Utility.com plans to start its marketing campaign in Las Vegas in January. It will use online and traditional media advertising, but won't telemarket in Las Vegas.