With its California power marketing arrangement with Enron nowhistory, Amway Corp. has hooked up with Columbia Energy, asubsidiary of Columbia Energy Group, to market gas and electricityto residential and small business users, first in Georgia and thennationwide. The deal potentially could add more than 1.3 millionretail energy buyers across the country to Columbia’s already largeenergy customer base of 100,000 in seven states.

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

Recently, the Georgia Public Service Commission certifiedColumbia to sell gas at decontrolled prices to residential andsmall commercial customers. In Georgia, the Columbia-Amway alliancewill compete with 18 other marketers for 1.4 million customers, oneof the largest markets yet to open to competition.

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

Mark Talbot, a senior marketer with Amway, said he does notthink Amway-Columbia will be at a disadvantage by not being able toquote prices immediately to customers. Instead, he sees thearrangement capitalizing on the already established customerrelationships Amway representatives have. He said he did not knowhow many customers that is because each of Amway’s 1.3 milliondistributor representatives keeps his own customer list.

Amway had a similar arrangement to sell Enron’s electricity toCalifornia customers which was dissolved. Columbia spokeswomanKathi Disch said her company was aware of the Enron deal. “I knowthat was something that was looked at and what happened there. Thebusiness philosophies of Enron and the business philosophies ofAmway were not in sync.” Enron later pulled out of the Californiaelectricity market.

While an established direct marketer of consumer and homeproducts, Amway is viewed suspiciously by some, in part because ofthe door-to-door nature of its multi-level marketing program. Dischsaid Columbia is not fearful of any negative public perception ofColumbia stemming from its relationship with Amway. She saidColumbia is not limited to marketing only through Amwayrepresentatives. Columbia plans to use direct mail and other meansto reach prospective customers itself.

Joe Fisher, Houston

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