Unwise energy blitz
AMERICA'S largest industry is about to launch a $20 million advertising campaign to promote electricity consumption. James O'Connor, of Chicago's Commonwealth Edison Company, told utility executives recently, ''Without growth in sales we will not see the strengthened balance sheets and the increases in earnings and dividends for which we are all striving.''
The Edison Electric Institute (EEI), the industry's national trade association and public relations coordinator, is responding to Mr. O'Connor's call by organizing a sophisticated, multimedia marketing drive. Conservation, EEI admits, was ''a highly useful and necessary undertaking'' which reduced the need to spend money to build more power plants. But it saddled electric companies with lower revenues and excess generating capacity. This shortsighted attitude has spurred the industry to develop slick advertisements, brochures for schools, exhibits for shopping malls, and a ''structured effort to make the nation's news channels more accessible to the industry.'' The EEI campaign will encourage the rebuilding of marketing departments that were abandoned when conservation was a popular public relations practice.
Because opinion surveys show that less than one-quarter of the American public believes electric rates are ''reasonably fair,'' the industry wants to ''position electricity in terms of the everyday tasks it performs at low costs, '' reminding the public of ''the incomparable service it provides. . . .'' To counter criticism, EEI claims its marketing strategy aims at managing the electricity load more efficiently. Campaign coordinator William Morron says he does not want to revive the ''Live Better Electrically'' blitz of the 1960s and '70s. He wants ''to maximixe use of investment and defer or delay the need for new generating facilities.''
But consumer organizations are skeptical about the industry's ability to manage the power load. Alan Nogee of Environmental Action Foundation fears EEI's campaign will be supported by those utilities with excess capacity. The Wisconsin Public Utility Commission believes advertisements will stimulate more power plant construction, higher rate increases, and additional environmental destruction.
Unfortunately, most utility executives still do not understand that they are building themselves into bankruptcy. They have spent their professional careers believing that more power plants mean higher profits. But this month the Public Service Company of Indiana slashed its dividend 65 percent because of financial stress caused by building a large nuclear reactor. Construction expenses for Long Island Lighting's Shoreham reactor have also raised the utility's bills from $217 million to $2.6 billion. Such high building costs are producing ''rate shocks'' that encourage consumers to switch to other fuels or suppliers, thus diminishing the electric companies' market.
To survive in the new age of high energy prices and stable or declining demand, the utility industry must emphasize economy rather than growth. Instead of a Madison Avenue blitz for increased consumption, it must invest in conservation and encourage entrepreneurs to utilize other efficient technologies.