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Columbia Joins Amway in Targeting GA Gas Customers

Columbia Joins Amway in Targeting GA Gas Customers

With its California power marketing arrangement with Enron now history, Amway Corp. has hooked up with Columbia Energy, a subsidiary of Columbia Energy Group, to market gas and electricity to residential and small business users, first in Georgia and then nationwide. The deal potentially could add more than 1.3 million retail energy buyers across the country to Columbia's already large energy customer base of 100,000 in seven states.

Relying on their contacts with residential customers, the 25,000 Amway distributors in Georgia will buy gas from Columbia and funnel other consumers to the energy company. Amway representatives will approach their existing customers and encourage them to call Columbia to inquire about gas savings that could be as much as 18% off Atlanta Gas Light's gas charges over the past six months (see related story this issue).

Recently, the Georgia Public Service Commission certified Columbia to sell gas at decontrolled prices to residential and small commercial customers. In Georgia, the Columbia-Amway alliance will compete with 18 other marketers for 1.4 million customers, one of the largest markets yet to open to competition.

Electricity and other energy products and services will be added to the program as deregulation permits. Amway will not get paid by Columbia until gas flows. Over time, the two companies plan to expand the program on a state-by-state basis, until it is offered coast-to-coast.

Mark Talbot, a senior marketer with Amway, said he does not think Amway-Columbia will be at a disadvantage by not being able to quote prices immediately to customers. Instead, he sees the arrangement capitalizing on the already established customer relationships Amway representatives have. He said he did not know how many customers that is because each of Amway's 1.3 million distributor representatives keeps his own customer list.

Amway had a similar arrangement to sell Enron's electricity to California customers which was dissolved. Columbia spokeswoman Kathi Disch said her company was aware of the Enron deal. "I know that was something that was looked at and what happened there. The business philosophies of Enron and the business philosophies of Amway were not in sync." Enron later pulled out of the California electricity market.

While an established direct marketer of consumer and home products, Amway is viewed suspiciously by some, in part because of the door-to-door nature of its multi-level marketing program. Disch said Columbia is not fearful of any negative public perception of Columbia stemming from its relationship with Amway. She said Columbia is not limited to marketing only through Amway representatives. Columbia plans to use direct mail and other means to reach prospective customers itself.

Joe Fisher, Houston

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ISSN © 2577-9877 | ISSN © 1532-1266
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