Marketers can’t yet sign up gas customers in Georgia, but oneaggregator there has been deputizing agents to round up end usersin anticipation of customer choice. When choice does come toGeorgia in November, Grass Roots Energy hopes to have thousands ofcustomers who will wield their collective clout to swing the bestdeal.

David Rich, Grass Roots president, said small gas users won’treap the benefits of deregulation unless they band together.Through a network of independent agents, Grass Roots is solicitinga one-year commitment from end users to allow the company to act astheir buyer’s agent. Part of the pitch is the more consumers whosign up, the better deal Grass Roots will snare for everyone. “As abuyer’s agent representing thousands of consumers just like you, wewill negotiate for you to receive the most dependable energy at thebest rates available, then arrange to have it delivered via yourexisting lines. Our buying power and bargaining strength meanyou’ll save money,” Grass Roots’ brochure reads.

The brochure does not give a specific figure for expectedsavings but notes deregulation elsewhere has seen consumer billscut by up to 15%. “We expect to see similar or even greater savingshere.” Another prediction is more cynical but likely true. “Soon,you’ll be inundated with TV, radio and direct mail advertising, andmore phone calls during dinner.. We’ll give you the facts andeliminate all the hassles, headaches and confusion.”

When the Georgia Public Service Commission became aware of GrassRoots’ activities, it had three concerns, said PSC spokesman ShawnDavis. One was that Grass Roots should not receive any proceedsdirectly from end users signing up. The company does not take moneyfrom consumers but will take a margin once gas starts flowing.Another concern was that Grass Roots make it clear to consumersthey are giving Grass Roots authority to act as their agent toAtlanta Gas Light and marketers, which the Grass Roots brochuredoes. A third concern over slamming, or unauthorized switching ofgas supplier, was addressed by requiring Grass Roots agents toobtain copies of gas bills from customers they sign up.

Rich said Grass Roots has a little more than 1,000 customerscurrently signed up. The company uses no advertising but reachesprospects through independent agents. For every consumer an agentsigns up, he gets $10. Agents are recruited through a networkmarketing scenario that includes meetings held twice weekly. GrassRoots has signed up more than 200 agents since March 3, “and it’sgrowing literally every other day.”

The rationale for consumers to sign up now with Grass Rootsrather than wait to see what marketers will offer is the firstgroup of Grass Roots customers will be available to marketers atthe beginning of customer choice, meaning marketers won’t have tospend their own advertising dollars to reach them. In other words,Grass Roots offers marketers one-stop shopping for customers.”We’re going to talk to all of the marketers who are certified tooperate in the state of Georgia, and we’re going to cut the bestdeal we can for our constituency. It may be with a number ofmarketers; it may be with one marketer,” Rich said.

Another thing that is thought will make the Grass Roots customergroup particularly attractive to marketers is a provision ofGeorgia’s deregulation law. It specifies once one-third of the loadin each of the state’s nine pools has selected marketers and thereare at least five marketers besides Atlanta Gas Light’s marketingaffiliate operating in the pool, the remaining load is assigned tomarketers on a pro-rata basis. Hence, the marketer supplying thelargest load at the time of allocation stands to get more customersthrough allocation.

Kathleen Magruder, vice president of rates and tariffs formarketer Enron Energy Services, said she is excited by aggregationefforts and suggested affinity groups are another opportunity foraggregation. For instance, a church may solicit its members toaggregate with the stipulation realized savings go to churchcoffers.

While Grass Roots’ focus is now only on gas and only in Georgia,Rich said electricity consumer aggregation could come later, andplans are to take the company nationwide.

Joe Fisher, Houston

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