FEATURES, WORK & MONEY A power shift on energy prices Laurent Belsie Special 
to The Christian Science Monitor ? 09/25/2000 Christian Science Monitor ALL 
13 (Copyright 2000) 

You pinch pennies, wait for sales, and compare prices. But have you  ever 
gone shopping to lower your utility bills? A handful of Internet  companies 
are hoping you will in the next few years.  

The fledgling companies already are saving money for consumers in the  
handful of states that have deregulated electric power and natural gas.  They 
expect a flood of interest as more states deregulate. In the  meantime, 
they're luring new customers with cut- rate deals on other  services from 
long-distance telephone service to satellite television  and even gasoline. 

Their formula: Lure hundreds of thousands of bill-payers to a single  Web 
site where they can find great deals.  

"It is the Web that has made it possible for consumers to come together  
nationwide," says Sanjay Chopra, chairman and chief executive of  
OnlineChoice.com, a Pittsburgh-based Internet service. "The power has  
shifted - and we're enabling that process - from the producers to  
consumers."  

"Every month you have these bills. They're unavoidable," adds Matt Coffin, 
chief executive and founder of LowerMyBills.com, based in Los Angeles. "Who 
wants to pay more than they need to for monthly bills?"

The message is catching on. In a year, LowerMyBills has grown from nothing to 
a marketplace of more than 250,000 people who are looking to  cut costs. The 
site bills itself as a marketplace for utility- type  services. Online users 
can select among three long-distance services  that charge anywhere from 4.9 
cents to 6.9 cents a minute. If they sign  up, LowerMyBills gets a 
commission.  

The company also offers Internet access and low-interest credit cards,  as 
well as electric power and natural gas in some deregulated states.  If 
homeowners signed up for all of the services the company offered,  they would 
save an average $3,000 a year apiece, Mr. Coffin claims.  

"It's not just cost or price that attracts customers to our  marketplace," 
says Paul Lewis, president of Essential.com, an online  energy and 
communications marketplace. "They're also looking for  convenience." The 
Burlington, Mass. company sends customers their bills  online and charges 
their credit-card accounts, saving them time but  also reducing the company's 
costs.  

Sometimes the companies are independent, such as OnlineChoice,  LowerMyBills, 
and Essential.com, as well as Utility.com, based in  Emeryville, Calif.; and 
GreenMountain.com, a South Burlington, Vt.  provider of environmentally 
cleaner energy. Sometimes, they're tied to  big energy companies. In May, for 
example, Enron Corporation joined  forces with America Online and IBM Corp. 
to begin selling electricity  and natural gas. The company, dubbed the New 
Power Company, is  marketing its services via the Internet to customers in 
Pennsylvania  and New Jersey.   

OnlineChoice.com uses a slightly different strategy. It pools together  
potential customers and then goes out and negotiates the best possible  deal 
for them. For example, 70,000 consumers agreed to register (with  no 
obligation) for long-distance telephone service. That customer base  was 
enough to convince GTC Telecom to offer members a price break: 4.7  cents a 
minute with no monthly fees or minimums.  

The company has also attracted a buying pool of 65,000 consumers for  cheaper 
electricity. Currently, the company offers such deals in some  seven states. 
But the pace of reform remains slow.  

Even in some of the states that have deregulated, competition hasn't  
flourished. Pennsylvania set prices for traditional utilities so low  that 
new companies found it difficult to compete. In Massachusetts,  pricing 
problems also caused only a small fraction of customers - 0.4  percent last 
year - to switch. And most of them were large businesses.  

Analysts expect more states to deregulate soon, which should open up  still 
more business for the online discounters.   

By 2005, more than a quarter of online households will use the Internet  to 
trim their energy bills, according to the Yankee Group. 

"There are a number of very appealing markets that are opening up to  
competition," says Bob Potter, vice president of business development  for 
energy for Essential.com. "The regulations that they're putting in  place are 
better." (c) Copyright 2000. The Christian Science Publishing Society Folder 
Name: Utilities, Electric: Deregulation Relevance Score on Scale of 100: 
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